ROCKVILLE, MD-Retail trades of income-producing properties--but with the potential for additional development--are starting to pick up, raising hope that building will start to occur again in the not so distant future. The latest example is the trade of Metro Pike Center for $33.25 million. The 63,886-square-foot neighborhood retail center and retail pad here was acquired by Saul Centers, along with the assumption of a $16-million loan on the property.

In December, Northwestern acquired a strip mall at 1585-1614 Rockville Pike with plans to build it out when the time is right, Sandra Hunt of the HBW Group, who brokered the deal, told GlobeSt.com. “For the first time in three years you are seeing major players preparing for future development,” she said. 

Metro Pike Center is a prime example of this mentality, HFF’s Jim Meisel tells GlobeSt.com. Meisel, along with Dek Potts and Stephen Conley, led the investment sales team on behalf of the seller, Holladay Corp. The buyer does not have a specific timeframe to begin development, he says, “but that was clearly part of the deal’s attractiveness.” Metro Pike traded at a 5.6% cap rate, he adds.

“With 100,000 square feet of potential development close to the White Flint metro station, it is probably one of the best development sites on the Pike,” says Meisel. Located at 11520-11564 Rockville Pike, the retail center is 87% leased to tenants including FedEx Kinko’s, David’s Bridal, Verizon, Domino’s Pizza and a McDonald’s pad site.

Such deals--that is, operational retail that also includes development potential--will continue, Hunt confidently predicts. “A lot of major developers are buying land right now,” he says. “And while they may not know exactly when they will start building, they are happy to make that bet.”