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ROCKVILLE, MD-The future for Market Square at Shady Grove–a proposed 230,000-sf office structure–is looking bright now that commercial real estate capital concern Holliday Fenoglio Fowler LP has facilitated construction/permanent financing for the project to the tune of nearly $40 million. HFF secured the funds in the form of a 10-year fixed-rate loan from portfolio lender MONY Realty Capital Inc. on behalf of property developer the JBG Cos.

When all is said and done with construction–which is expected to be the case next June–Market Square will carry the address of One Choke Cherry Rd. just off I-270. Already, the property has a tenant that plans to take on the entire space. The Substance Abuse and Mental Health Services Administration, an agency of the US Department of Health and Human Services, will call the class A building home. Securing a pre-lease agreement from a single tenant for the entire building reflects well on the developer and the proposed project, considering the fact that space is not exactly scarce in the area. According to Advantis Real Estate Services Cos. Third Quarter 2003 Office Report, the direct vacancy rate in the North Rockville/Shady Grove submarket is 12.9%, with that number climbing to 16.4% when including sublet space.

The JBG Cos. standing is just one of the factors that made the financing a solid investment. “Since they brought in a General Services Administration tenant, it made economic sense to build it,” HFF senior managing director Robert F. Donhauser explains to GlobeSt.com. “It’s in a good location, it’s a good market and there is a desirable tenant.”

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