Speculative commercial real estate development has lost some of its favor these days, with all but a few projects moving forward, only in the right locations.
That’s not much of a surprise, since it’s a costly endeavor with no guarantee a tenant will sign on to lease space. And yet, Baltimore-based developer Merritt Properties LLC is planning to break ground Aug. 12 on a $10 million flex-industrial building in Ashburn that it hopes will catch the tail winds of a number of factors playing out in Loudoun County. They include the wave of data center construction that is cutting down on the supply of available industrial properties in the area.
The new building, at 20700 Loudoun County Parkway, is being developed across from the One Loudoun mixed-use project and is slated for completion in January 2015. Merritt spokeswoman Missy Teague said the project has a number of other things going for it, among them 12.5 percent light industrial vacancy rate in the area, an average absorption rate of 437,000 square feet a year over the past four years, and an increase in mixed-use and retail development that should create a demand for places those retailers can store their goods.
Industrial development tends to get overlooked in D.C.’s larger commercial real estate scene. But a handful of interesting projects have surfaced over the past few years that show developers are still willing to try their hand at it.
In March, for example, I wrote about plans by a China-based developer to build its first spec industrial project in Rockville on a site adjacent to the Department of Health and Human Services’ Parklawn headquarters. In May 2013, HD Supply snapped up Steeplechase 95, a spec industrial project Atapco Properties developed previously in Capitol Heights. And in May 2012, I wrote about Carlyle Group LP’s partnership with Baltimore-based Chesapeake Real Estate Group LLC to develop a spec industrial project at MTC Logistics’ former Landover warehouse.