A partially-leased retail building in downtown Bethesda has hit the market for sale. 4707-4711 Chase Avenue is the former home of Besta Pizza and Hope Floats, the latter of which moved to a new spot at 7625 Wisconsin Avenue a few years ago. Those storefronts are vacant, but Autobody Dimensions is still located on the second floor.
The asking price is not provided in the online listing, which does note that the prospective buyer will be subject to a ground lease, which has 36 years remaining on it. We don't know the specifics of this situation, or what adjustments might be made in negotiations with a prospective buyer, but ground leases can complicate matters for the buyer and seller.
Foremost, under the typical ground lease arrangement, it means that 36 years from now, the property and all improvements the new owner might make revert to the ground lease holder. So your investment as the buyer is depreciating over time, while the property continues appreciating for the ground lease holder over the next four decades.
4 comments:
If the building is torn down, will it be another "Steamers" fate/outcome? Just a field of wild grass and weeds more than 10 years later ...
https://bethesdamagazine.com/2015/08/17/steamers-shuts-down/
With a 36 year ground lease this building is worth $0.00.
I wonder what was the duration of the original lease. The building looks maybe 40 years old so maybe 75 years? There is a 14 story apartment built three years ago in downtown Bethesda that has a 99 year ground lease.
Remember, Montgomery County now has a property tax abatement for 20 years to developers who convert high-vacancy office buildings (at least 50% vacant) into residential units, provided they meet clear eligibility criteria—most notably, dedicating 17.5% of the new housing as affordable. Would the purchaser of this retail/office building gain the property tax abatement? It appears the second floor of the building is office space.
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