ROCKVILLE, MD-Dorsey Management Co., a Washington, DC-based realestate investment company, has acquired an industrial building herefor $6.1 million. Occupied--for the moment--by the Food and DrugAdministration, the single-tenant facility is one of the largerindustrial buildings in this submarket. Transwestern’s Bob Filley,Gerry Trainor, Bob Filley and Jim Cardellicchio, brokered thedeal.


Normally, this would be a stable investment for a company giventhe tenant. However, the FDA’s lease is up in mid-2011 and thegovernment agency has been pulling its operations out of theRockville market. The buyer is taking a gamble, agrees Filley, butit is still hopeful the FDA will renew for a short-term lease offive to seven years. "Even in the buildings where they are pullingout, they are still backfilling space for a few years," he For example, a nearby building just inked such a leasewith the FDA for 97,000 square feet, he says.


Another reason why the FDA might stay is that it will bedifficult for it to find cheaper space than what the building,located at 12100 Parklawn Dr., is currently offering. "Basically,it is a below market rate," Filley says. Typically, industrialproduct in infill locations such as Rockville can command between$10 per square foot to $15 per square foot net, he says.


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Erika Morphy

Erika Morphy has been writing about commercial real estate at for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.