BETHESDA THEATRE FOR SALE FOR $8.5 MILLION

The historic Bethesda Theatre, currently home to the Bethesda Blues & Jazz Supper Club at 7719 Wisconsin Avenue, is back on the market for sale. Marcus & Millichap, which has a downtown Bethesda office among its 78 locations across the country, is handling the potential sale. Originally opened in 1938 as the Boro Theatre, the Streamline Art Deco movie house has evolved over time into a Cinema and Drafthouse, a home for off-Broadway plays, and now a music and entertainment venue.

Should the theater draw a buyer, the Bethesda Blues & Jazz Supper Club will likely remain as a tenant, because it currently has a 10-year lease at the property. Sales documents indicate the club would like the option to continue beyond that lease. Any potential conversion of uses would most likely have to wait until a decade from now. Additionally, the sales announcement stipulates that the club be granted a new 10 year lease "upon close of escrow," and could include "negotiable [rent] increases," and options to renew the lease.

Changes of use are limited, however, as the building's interior and exterior have been designated historic, and it is listed on the National Register of Historic Places. It cannot, like so many other classic movie houses such as the Druid in Damascus, Maryland, and the MacArthur Theater in the District, be turned into a drug store. This means that the property owner will not likely be able to charge a market rate rent per square foot.

Why would anyone want to purchase the building with seemingly minimal profit potential? It could be a tax deduction opportunity. Someone with a grand plan to convert it back to a movie palace or some other entertainment use, who can wait 10 years, might be interested. A risk taker might gamble the supper club would fold before the end of the lease. And some real estate investors just like to acquire significant, historical properties such as this.

The building is a real gem, and one of the few significant historic properties still standing in downtown Bethesda. If you have only driven past, you might not realize how grand the interior is. With current operator Bethesda Blues & Jazz, the venue is probably in the best shape it's been in in many decades. It opened in 1938 with a congratulatory telegram from the legendary Clark Gable. Whoever answers this sale ad will decide what the theater's next chapter will hold.