Thursday, March 4, 2021

More Rockville office space to become residential

The moribund Montgomery County economy, and the failure of County officials to attract even a single major corporate headquarters to the county in over 25 years, continues to severely impact the real estate market. With little demand for office space, the county has watched revenue plummet as higher taxes must replace the lost commercial revenue, and those taxes impel the wealthy to flee to lower-tax jurisdictions. Now more planned office space in Fallsgrove is expected to become residential, when the Rockville planning commission approves an amendment allowing that on March 10, 2021.

This is far from the first time land in Rockville that was meant to provide jobs and eliminate commutes for a number of residents has been lost to residential housing. The latest flip will allow 210981 square feet of potential office space to instead be used for up to 350 units of multifamily housing. This will not only eliminate planned office space, but also exceed the caps on building height and total multifamily units allowed in the Fallsgrove master plan.

The proposed residential building would be 76' tall. Parking would be above-ground underneath the residential floors, and on surface lots around the building. A 19000 SF pocket park, a small playground, and a shared-use path along Research Boulevard would be constructed as part of the new development.

Developer Lerner Enterprises' "statement of justification" for the request states that "unsuccessful efforts to market the Property for office use for more than a decade due to the lack of market interest, coupled with the challenges the Applicant has had in leasing their two office buildings in Fallsgrove proper, are the driving forces behind the subject Project Plan Amendment.” It also notes that existing office buildings at 14955 and 14995 Shady Grove Road currently have a high number of vacant units.

Rockville planning staff has made including 2000 SF or less of retail space a condition of approval for the amendment. Lerner says there is no market for retail at that location, and that including it will compromise the successful design of the planned residential building. The company also notes that the retail market in Rockville is weak, citing Rockville Town Square as an example. 

Staff is recommending approval of the project plan amendment, with 13 conditions. If passed, the approval will be transmitted to the Mayor and Council for their approval.

Lerner's statement calls the possibility of Montgomery County's office market rebounding "a remote event." The developer hired Avison Young to study MoCo's office market in general. "The Avison Young reports confirmed that the office market overall in Montgomery County is not strong," Lerner wrote.


  1. I wish they would just STOP building things we don't need or want, and then crying about it. More residential just means more traffic on already crowded streets, more kids for already overcrowded schools, and no value brought to the county. How about instead of letting them convert their failed offices into residential that violates all kind of limits, we just let them sit with their empty building.

  2. Good news. The area definitely should not be building more car oriented office space as if it were still 1962. Hopefully the developer is intelligent enough to have their common areas and unit configuration support remote work as that shift won't be going away anytime soon.

    1. 2:24: I did see in the documents that they are considering having 2 and 3-bedroom units, so one of those could be used as a den or office.

  3. Considering the location, a residential switch likely makes sense. The problem is it's detached from all the Fallsgrove retail. If the area is going to transition to more residential then the pedestrian experience should start seeing some prioritization from the city. The W Gude and W Montgomery intersection, for example, is about as anti-pedestrian as it gets and would be very dangerous for anyone who ends up living here.