Bethesda's weak apartment market on display in 8011 Norfolk retail proposal

I've been writing for years about the low market demand for "luxury apartments" at the outrageous rents being asked for in downtown Bethesda. While thousands of new units have been delivered in Bethesda since the "Great Recession" ended, rents have only skyrocketed, recently surpassing $3000 for 1-bedrooms for the first time at one of the newest buildings. Under the laws of supply-and-demand, and the free enterprise system, landlords should be cutting prices to meet the actual market rate, and undercutting each other to compete with the many options renters theoretically have. Instead, they have maintained the high rents publicly, while quietly filling their many vacant units with illegal Airbnb guests, college students, and corporate contract housing tenants. But the weak demand for the current product at the current price is now spilling into more obvious view, with the proposed replacement of a failed condominium project with a retail building.

Washington, D.C.-based Dochter & Alexander Retail Advisors is pitching a new retail development for 8011 Norfolk Avenue, the former site of Steamers behind the Gallery Bethesda apartment tower. This site, and adjacent property, had been assembled for The Claiborne, a boutique condominium project. Groundbreaking for that building stalled repeatedly, and it is apparently now dead after 10 years of talk and development approvals. The property was sold to Rock Creek Property Group last year. 

While the renderings of the proposed retail development look great, the bigger story here is what this is telling us about the multifamily real estate market in Bethesda.

The Bethesda condo market has been dead for some time now. Banks who finance condo mortgages are more than slightly averse to approving loans for condo owners whose neighbors will be Airbnb tourists and college students, to say the least. And you have to actually sell the condos, as opposed to filling them with frat brothers for the spring semester, and they won't sell at way-above-market-rate prices. So condos are kaput for now.

But 10 years ago, you might have seen a rental apartment developer swoop in to snap up 8011 Norfolk once The Claiborne flatlined. They haven't. In fact, multifamily housing building permits have dropped 96% over the last year, Montgomery Perspective reported last month. While blogger Adam Pagnucco is blaming that on the County Council's passage of a rent control law, the fact is that rent control doesn't apply to new construction for 23 years - by which time, reading the Montgomery County cartel tea leaves, the rent control law will have long since been repealed. Most developers sell their buildings shortly after they are delivered, anyway, so they couldn't care less about what happens in 2049.

No, the problem is that there is simply no demand for the apartment product being offered at the price it's being offered at. And now we are seeing the first crack in the dam that developers have constructed to hold off the forces of the free market.

Beyond the lack of multifamily development suitors for 8011 Norfolk, there is a second factor that supports this. That end of the Woodmont Triangle has historically been a terrible location for retail. It's a very quiet, low-traffic area more conducive to a good night's rest than high-octane shopping. If retail is now seen as more viable there than sleepy apartments...well, the multifamily market in Bethesda is in real trouble, folks. 

We've already seen the impact of this low demand in the Westbard sector. The number of residential units sought by Regency Centers at Westbard Square was significantly below what was approved in the 2016 Westbard sector plan. Two apartment buildings were entirely deleted, and a third was changed to a nursing home use. A separate developer of two additional projects on the "Park Bethesda" site backed out altogether. When there's red hot market demand for apartments, a collapse like that - or at 8011 Norfolk - simply doesn't happen. 

The chickens are slowly coming home to roost for our incompetent and corrupt elected officials who have created this moribund economy. They want to be reelected - and, in some cases, promoted - in November's election. And this is the record they're running on? Heckuva job, Brownie!

Stalled Bethesda condo project site sold to new developer

A downtown Bethesda lot that has been vacant, at best - and an eyesore at worst - for nearly a decade has now changed hands. 8011 Norfolk Avenue had been touted as the future site of The Claiborne, a boutique condominium property, since 2016. The project repeatedly stalled out, with the last attempt to revive it taking place a full three years ago. At that time, the project's approval from Montgomery County had expired.

Rock Creek Property Group has acquired the site, and is now going to explore its options, citing potential uses to include residential, commercial, or office. The new-construction condo market has all but collapsed in downtown Bethesda since The Claiborne was first announced. Nobody is building them. The last successful condo project was The Cheval, which was delivered by Duball, LLC in 2018.

Future site of The Claiborne condos in downtown Bethesda cleared (Photos)

After more than five years as a small jungle of an overgrown lot, the property at 4820 Auburn Avenue in Bethesda has finally been cleared. Formerly home to Steamers seafood restaurant, the parcel is one of several assembled for the future site of The Claiborne condo development. That project has been stalled since 2016. There were signs once again of it moving forward late this past spring, and perhaps the clearing of a lot is another. Just another indication of how our Montgomery County Councilmembers are very unfamiliar with the streets of Bethesda they are grossly overpaid to represent.

The Claiborne site growing wilder in downtown Bethesda (Photos)

The old Steamers property that is part of the future site of The Claiborne condos at 4820 Auburn Avenue has been an eyesore for years, as the development has repeatedly stalled out. Although 4820 Auburn, LLC is now attempting to once again move the project forward, the abandoned property is growing even wilder. Dense plant growth is now spilling over the top of the fencing into the right-of-way of the public sidewalk. More proof the asleep-at-the-switch Montgomery County Council is rarely in Bethesda, as this has been an issue for years and is only getting worse.

The Claiborne project moving forward, but needs a new site plan approval after time expires

The Claiborne, an oft-delayed luxury condominium development in the works since 2016 at 4820 Auburn Avenue in downtown Bethesda, is once again moving forward as I reported yesterday. There are two new details to report this morning, however. First, the project's site plan approval from three years ago has expired, because the developer did not pull the building permit from Montgomery County within the required time limit under the Bethesda Overlay Zone guidelines. So the developer must now resubmit, and receive a new approval of, the site plan before it can proceed with construction.

4820 Auburn, LLC intends to file the same site plan that was approved before, and barring an objection by a new member of the Montgomery County Planning Board or other unforeseen event, that approval should be a formality at this point. If approved as expected, then, the site plan will once again include up to 84 condo units, of which 15% will be affordable MPDUs, and up to 5000 square feet of retail space. Building height will remain at 110' at the north side, stepping down to 90' at the southern end.

"The Leaf Illusion" mural proposed
for the south side of the building

One new change is the proposed mural for the south side of the building. It now features a concept for artist interpretation, which the applicant calls "The Leaf Illusion." The heat-wrapped vinyl mural would be 30'x50' in size, and feature two children sitting on a fern branch. A fern is a native plant to Bethesda, and the public art piece therefore "ties Claiborne back into the surrounding community," design company Swatchroom says. The surreal image also reflects "The Claiborne's themes: fresh, wellness, energy," the firm suggests.

Renderings courtesy SK+I Architecture/Swatchroom

The Claiborne is back on in downtown Bethesda

One of the four epically-delayed development projects from the last decade in downtown Bethesda is making yet another comeback attempt. I've just been informed that The Claiborne, a boutique condo building proposed for 4820 Auburn Avenue way back in 2016, is back on again. The project has taken so long, that the condominium market does not have the steam it had six years ago, if the recent lack of condo project proposals is any indication.

Future site of The Claiborne at 
Auburn and Norfolk Avenues

After plan revisions, and many starts and stops, a half-hearted attempt at demolition of the remaining retail structures on the site briefly began in 2020. Since then, the buildings have remained frozen in time, and the rest of the vacant lot that once belonged to Steamers has continued to be an overgrown eyesore in the Woodmont Triangle. Of other projects to experience major delays in downtown Bethesda, 8001 Woodmont has been completed, the St. Elmo Apartments are in the early phase of construction, and 8008 Wisconsin remains in development hell.

Nature reclaims site of the future Claiborne condos in Bethesda (Photos)

The Claiborne condominium project has experienced major changes and epic delays in its journey from blueprint to eventual construction. Most of its future site at 4820 Auburn Avenue has reverted to its natural state, while the rest is still occupied by vacant Norfolk Avenue storefronts that were cleared out before the latest holdup. The overgrown area was once home to Steamers (the concrete steps in the above photo are one of the few elements of that restaurant left). Listen carefully, and you may hear the call of the wild!

Demolition for The Claiborne condos picking up again (Photos)

The epic history of The Claiborne condominiums in Bethesda's Woodmont Triangle continues to be slowly written, one painstaking page at a time. This project has been in the works since 2016. A demolition process for the structures that remained on the lot after Steamers was razed in 2017 has been dragging on since last September. It appears an interior demolition is now underway inside the former Thelo Greek Grill space at 8009 Norfolk Avenue. Turtle power!

Demolition ahead on Norfolk Avenue in Bethesda

The on-again, off-again demolition of properties to make way for The Claiborne condo project on the block of Norfolk Avenue between Del Ray and Auburn Avenues is on again. Demolition permits have been applied for to raze several vacant storefronts formerly home to a Greek restaurant, Hannah's Barbershop and Plane Jane Salon. The latter two tenants have relocated to new spaces nearby.

Work begins on construction of The Claiborne in Bethesda

After years of expectation, work has now officially begun on The Claiborne, a boutique luxury condo building that will rise at 4820 Auburn Avenue in downtown Bethesda. Excavation began Tuesday at the site. There are still some vacant buildings left to be demolished.

Developer posts signage ahead of construction of The Claiborne

Developer Novo Properties has posted a large sign at the future construction site of The Claiborne, a residential building that will be constructed on the former site of Steamers and an adjoining parcel along Norfolk Avenue between Del Ray and Auburn Avenues in Bethesda. The sign lists the project partners, developer DBT Development Group and construction contractor Northpoint.

Updated plan for The Claiborne officially unveiled in Bethesda (Photos)

Developer Novo released new details about its revamped, larger development plan for 4820 Auburn Avenue in downtown Bethesda. As I reported last month, The Claiborne will now have 82 residential units and a larger 5000 SF. Novo was represented by its Director of Acquisitions, Neil Goradia, and by its attorney, Heather Dlhopolsky.

A slide in Novo's presentation featured a
graphic comparison of the old plan (left)
versus the new plan (right)

In addition to the new details I reported in August, Novo indicated last night that it has not decided whether the building will be rental apartments or condos. The earlier plan had called for condos. A corner sidewalk at the property will have a brick Chevron pattern, and benches to promote public gathering.

Novo anticipates a public hearing before the Planning Board in four to five months. If their plans are approved, construction would begin in the fall of 2019, and delivery would be expected in 2021. This is definitely an improvement over the original plan, although some still wish the project took up the entire end of the block.

The Claiborne is back - and bigger

When developer Novo encountered another lengthy delay for The Claiborne, a boutique condo building proposed for 4820 Auburn Avenue, the lack of activity at the former Steamers site caused some real estate observers' eyebrows to arch. Now we know what the latest delay may have been about. Over that time, the developer has secured agreements to acquire 8005, 8007, and 8009 Norfolk Avenue, allowing the density of the project to grow.

Where the original application approved called for 58 condo units and 2800 SF of retail space, a new proposed amendment bumps that up to 82 residential units and 5000 SF of retail. In addition, the amended plans now incorporate relevant aspects of the Bethesda Downtown master plan, such as the shared street vision for Norfolk Avenue. The master plan had not yet been approved when The Claiborne application was. You'll note the Auburn-facing "ladder" facade ornament has been deleted in the revised design.

Many local observers felt the original plan was too small, and that more effort should have been made to assemble a larger site. Those critics will be at least somewhat satisfied with the revised plan, even if they would have liked to see the whole corner and Tia Queta as part of the deal. A public meeting on the plan amendments will be held on Thursday, September 6, 2018 at 7:00 PM at the Bethesda-Chevy Chase Regional Services Center, located at 4805 Edgemoor Lane.

The blank space at the corner represents
properties that were not acquired for the
development; the 17-story Gallery Bethesda
is shown at rear of the site

Images via Montgomery County Planning Department

Downtown Bethesda's new eyesore (Photos)

The former site of Steamers at 4820 Auburn Avenue is evolving into the Little Lot of Horrors, as plant tentacles are beginning to reach out to pedestrians from the overgrowth of weeds and brush. Such conditions are prime for rats and other vermin to set up shop in, particularly in such close proximity to restaurants. The lot is the future site of The Claiborne condominums.

It took Montgomery County two years to address the Bainbridge Wisconsin lot. Perhaps if the County's regional services director weren't spending time stuffing taxpayer-funded County emails with links to boost profits and traffic for the local small and slightly-failing magazine (2 gratuitous links in yesterday's email alone), these basic matters could be kept on top of.