Crown West Realty Enters DC Market With $14M Buy
By Erika Morphy
July 6, 2007
GAITHERSBURG, MD – Crown West Realty, a subsidiary of New York City investment firm Petrus Partners Ltd., has made its first purchase in the DC market with its acquisition of 704 Quince Orchard Rd. for $14.3 million from New Boston Fund.
A 77,000-sf, class A, fully occupied building, 704 Quince Orchard Rd. sits in the heart of Maryland’s Biotech and Medical Technology Corridor, which is one reason why the company chose it as its foundation for a future Washington area portfolio, Ed Gargiulo, asset manager for Crown West Realty, tells GlobeSt.com.
Also, he says, Greater DC area growth is moving at a rapid pace and the I-270 corridor, from Bethesda to Frederick, is poised to capture a great deal of it. “While there is clearly rent growth happening in Bethesda, we expect Gaithersburg to see some benefit from this going forward.”
Even though the building is nearly fully occupied by such tenants as Ace*Comm Corp., Guru Inc., FOI Inc., and Weichert, Gargiulo says upcoming availabilities have been identified as one avenue for future value-add. “There is going to be some roll-over as well as opportunity to put together larger blocks of space for tenants.”
The company is looking at other properties on Rockville Pike, he adds. Likely, its next purchase will be at a higher dollar amount than the $14 million it paid for 704 Quince Orchard Rd. Crown West Realty’s sweet spot, he says, is usually between $20 million to $50 million. The Quince Orchard Road building was something a departure for the firm in that respect, he adds. “It is a good building for us to use to penetrate the market, get our feet on the ground and develop relationships.”
The company has identified a few select markets in which to expand. Besides Washington, DC’s suburbs, it is also looking at Phoenix; Denver; Raleigh and Durham, NC; Atlanta; and the Chicago suburbs. All have been at least initially penetrated except for Chicago, Gargiulo says. “We are not interested in being a single asset owner in any market.”