Speculative buildings at Tower Oaks part of development landscape
by Chris Baker
Staff Writer

The Tower Cos. has started scouting for tenants for the 276,000 square foot office tower it is building in Rockville, one of several "speculative" projects under development in Montgomery County.

Tower hopes to begin signing leases for the building by mid-summer, about one-year before its construction is scheduled to be completed. Construction on the building began in October.

The building to be called The Tower Building, will be in the Tower Oaks office park that overlooks Interstate 270.

John Myers, a broker with Jones Lang Lasalle, the commercial real estate firm that will handle the leasing, said the building will be marketed toward information technology companies, including expanding firms in Northern Virginia.

"There are a lot of Montgomery County residents traversing the American Legion Bridge to get to work in Northern Virginia.

Myers said he will try to reach Northern Virginia companies and other potential tenants through a World Wide Web site, www.towerbuilding.com, and advertisements in local business publications.

The Tower Building is one of 20 office buildings scheduled to open in Montgomery County within the next two years, according to the Maryland National Capital Park and Planning Commission, a regional planning agency.

Of these 20 projects, most are speculative: 12- including The Tower Building- have not leased space, six have leased some space and two have leased all available space, the commission said.

Fred Peacock, research supervisor for the planning commission, said the speculative office development shows builders are confident Montgomery County’s economy will continue its bull run.

"For a long time, spec buildings were kind of on the outs because people remembered all too well the experience of early 1990s," Peacock said, referring to the recessionary period when many spec buildings sat empty.

Commercial real estate industry insiders say the speculative development in Montgomery will also help loosen the tight office market in the county, which has been cited as a barrier to economic growth.

A report issued last year by a panel of economic advisers to County Executive Douglas M. Duncan (D) gave the county a "D" grade for commercial construction, one of only two low marks.

Meanwhile, the monthly office vacancy rate in Montgomery in November was 6 percent, according to the most recent statistics available from research company Delta Associates.

William J. Prutting Jr., president of the Great Washington commercial Association of Realtors, a District-base trade group, said speculative office development is strong throughout the region.

"There is still plenty of room for an increase in spec," Prutting said.
Myers said The Tower Building’s developers aren’t worried the marketplace will become crowded. If the market does overbuild, the high technology features of The Tower Building will gave it an advantage over competing projects, Myers said.

For example, the building will be equipped with "smart elevators" that "learn" the foot traffic pattern of its tenants, Myers said. It will also be wired with fiber-optic cables and will have several energy-saving design features.

"These are the kinds of things that will make The Tower Building stand out," Myers said.

When completed, The Tower building will be one of the largest offices along I-270, with more than 275,000 square feet of available space. By comparison, the Sodexho Marriott building in Gaithersburg has about 300,000 square feet of available space, according to its developer, McShea & co. Inc.