EDGE Experience Diligence Guidance Execution

Tech Park 270 – Gaithersburg, Maryland

Tech Park 270 – Gaithersburg, Maryland

Tech Park 270 – Gaithersburg, Maryland
Tech Park 270 is located on Clopper Road in Gaithersburg, a central location for life science companies along the I-270 High Tech Corridor in Montgomery County, Maryland. At the time of the acquisition, this asset was the only building situated in a small submarket of Gaithersburg that had not yet been converted to lab space. The acquisition strategy was to convert one wing of the building, 24,000 square feet (12.5 percent) then vacant, to small suite wet laboratory space.

Lab space in the market exacts twice the rent as typical office/flex space and after conversion cost, yields a net rent gain of a 162 percent. Respectively, for every square foot of space within the building converted from office to lab space creates a net resale gain of 45 percent. The balance of the building contained rents at rates 50 percent below the market, thus offering significant upside rent potential.

Value-add Acquisition

    • Acquired through 20-year relationship with seller – not marketed
    • 184,000-square-foot office/flex building purchased in June 2002 for $19,525,000
    • Repositioned a portion of the building to laboratory space and renewed anchor tenant, Fusion UV Systems (78,000 square feet), for 10 years at a market rate
    • Sold to Alexandria Real Estate Equities in December 2004 for $33,000,000 (31% IRR to equity investor)