Firoozabadi: Overbuilding not an
issue yet for Bethesda.

BETHESDA, MD-Bethesda is likely to see yet more retail development via Equity One’s plans to acquire Westwood Complex–a 22-acre property here with significant opportunities for retail redevelopment and expansion. The acquisition is part of a four-asset purchase the REIT is making for a total of $260 million. The other three properties are in New York City.

Westwood consists of 214,767 square feet of retail anchored by a Giant Food, a 211,020-square-foot apartment building and a 62-unit assisted-living facility. The transaction is initially structured as a $95-million mortgage loan, which has been funded. The acquisition will be completed with an outright purchase for $140 million with an anticipated closing before January 2014. Equity One declined to comment beyond the press release.

The Giant lease expires in 2019. The apartment building is leased to a division of Montgomery County and is subject to a purchase right in 2017, which is expected to be exercised. The assisted-living facility is leased to Manor Care Health Services through 2015 with no term remaining.

Any redevelopment Equity One might be planning will be joining a slew of other projects under way in the popular, high-income submarket. There are at least a dozen major projects underway in Downtown Bethesda alone. Overbuilding is not a concern, however; demand is very strong for services in Bethesda, Ari Firoozabadi, principal with the Greysteel Co., tells

“The demographics speak for themselves,” he says, pointing to an average household income of $163,000 among other signs of affluence. “Institutionally speaking, there’s a great deal of interest by developers to do more here.”