Holliday Fenoglio Fowler LP (HFF), as exclusive representative for the owner, is marketing a Class A life science innovation center for sale that comprises three lab buildings totaling 138,938 square feet in the Washington, D.C. suburb of Gaithersburg, Maryland. Driven by strong demographic tailwinds, suburban Maryland’s 8.2 million-square-foot lab/life science market is currently only 3.5% vacant, with recent rent growth in excess of 30% and rents now pushing into the mid-$30s on a triple-net basis. The market is anchored by global pharmaceutical giants, a vibrant life science start-up community, strong educational institutions, and permanent government demand drivers.
The property is currently 87% leased to five tenants with a weighted average remaining lease term of 6.4 years, with the sole remaining vacancy being a to-be-delivered lab-ready suite. There is additional lab conversion potential via the last two remaining office suites (19% of RBA). Additionally, approximately 80% of the existing tenancy is lab tenancy, and all in-place leases are triple-net with contractual annual escalations.
Accordingly, the property, which is located at 25, 35 and 45 West Watkins, is a coveted opportunity to acquire institutional quality lab/life science product with upside potential via the lease-up a lab ready suite as well as future conversion of the remaining office space to lab.
The property will be sold free and clear of debt, providing investors the opportunity to take advantage of today’s low interest-rate environment. For more information on this lab/life science property or any other office properties for sale in the Washington, D.C. area, please contact Jim Meisel, David Baker, Matt Nicolson, Stephen “Dek” Potts, Andrew Weir or Stephen Conley in HFF’s Washington, D.C. office.
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