COLUMBIA, Md.--(BUSINESS WIRE)--The Howard Hughes Corporation® (NYSE: HHC) announced today that it has expanded its holdings in Downtown Columbia, MD with the acquisition of two existing office buildings: The American City Building (ACB), adjacent to Whole Foods Market on Little Patuxent Parkway; and One Mall North, positioned on the outside of the ring road surrounding The Mall in Columbia. Both purchases were underwritten in view of their future development potential.
The purchase of ACB for $16.5 million unlocks the potential for redevelopment in the Lakefront District in Downtown Columbia for up to 1.5 million square feet of additional density as the acquisition allows for termination of restrictive covenants on neighboring parcels of the company’s holdings. Specific plans for the ACB site and its adjacent surface parking lot contemplate complete demolition of the existing structure, which is mostly vacant, and development of a new mixed-use project with multi-family, retail and restaurant space.
One Mall North, which is 100% leased, is a 97,500 square foot, four-story office building. The low-rise structure and surface parking totals 5.37 acres. The building is currently leased to a diverse roster of tenants, including medical, financial, engineering and technology companies, with minimal near-term rollover. The in-place net operating income is approximately $1.6 million and the purchase price is $22.25 million. The longer term value creation opportunity is due to the site’s underlying zoning potential, which allows for a variety of uses, including retail, office and multifamily with new construction of up to nine stories, making the parcel suitable for significant future redevelopment when market conditions warrant.
Expansion of the company’s footprint in Downtown Columbia follows several significant milestones recently achieved in keeping with the 2010 Downtown Columbia Plan, including the approval of a $90 million tax increment financing (TIF) plan on November 9, 2016 by the Howard County government to fund critical public infrastructure improvements in the Merriweather District, including significant roadwork and a 2,500-space parking structure. The Merriweather District is a five million square foot mixed-use development that is part of the larger Downtown Columbia redevelopment, which has up to 14 million square feet of vertical entitlements.
“As I noted in my most recent shareholder letter, we have high expectations for the continued growth of Downtown Columbia, and to date, several vibrant companies have chosen to relocate to our community,” said David R. Weinreb, Chief Executive Officer of The Howard Hughes Corporation. “We continue to generate significant interest from a variety of businesses as we grow the employment opportunities in the heart of Downtown Columbia. Our goal is to find additional companies that will thrive in this highly educated, abundant and expanding labor pool.”
This latest investment in Downtown Columbia comes on the heels of national recognition in the October 2016 issue of Money Magazine, which listed Columbia at the top of its Best Places to Live in America list, citing its outstanding national ranking for job growth and economic opportunity as well as its award-winning public education system and range of housing choices.
Also under way is a major renovation and expansion of Merriweather Post Pavilion, cited by Rolling Stone magazine as one of the best outdoor concert venues in the nation. The entertainment venue will serve as the catalyst for the creation of an arts and culture hub in the region. A performing arts center and artist studios, a world class library and other cultural institutions are planned.
New multifamily projects under construction include two buildings adjacent to the Metropolitan, which was the first residential project completed under the Downtown Columbia Plan in 2015. The new buildings - m.flats and TEN.M - are located on the ring road of The Mall in Columbia. All three buildings are located within walking distance of the shopping venue, Merriweather Post Pavilion, Whole Foods Market, the Central Branch Library, Lake Kittamaqundi, a spa and miles of pathways. These new buildings will begin preleasing in the summer of 2017.
About Downtown Columbia
One of the first master planned communities in the U.S., Columbia, MD was founded by legendary developer James W. Rouse in 1967. Comprised of 14,000 acres, it includes ten primarily residential villages that are largely sold out and a deep pipeline of commercial development opportunities. The underdeveloped core of Columbia became the subject of an extensive five-year process that culminated with the passage by the Howard County government of the Downtown Columbia Plan in 2010, a guide to creating a vital area “in which residents can live, shop, work, entertain, exercise and enjoy cultural opportunities in an enriched natural setting.”
The Howard Hughes Corporation is the master developer for the revitalization of the 391 acres included in Downtown Columbia. The Downtown Columbia Plan, at full build-out, will include 14 million square feet of mixed-use development comprised of 4.3 million square feet of commercial office space, 1.25 million square feet of street retail, 6,250 residential units and 640 hotel rooms. To date ten percent of the plan is under construction or complete. Highlights include the transformation of the former Rouse Company headquarters building into a thriving Whole Foods Market; the development of the first upscale residential building, The Metropolitan; and the opening of the first new office building in Downtown Columbia in 15 years, One Merriweather, the new headquarters for MedStar Health, with a second office building underway.
About The Howard Hughes Corporation®
The Howard Hughes Corporation owns, manages and develops commercial, residential and mixed-use real estate throughout the U.S. Our properties include master planned communities, operating properties, development opportunities and other unique assets spanning 15 states from New York to Hawai‘i. The Howard Hughes Corporation is traded on the New York Stock Exchange as HHC with major offices in New York, Columbia, MD, Dallas, Houston, Las Vegas and Honolulu. For additional information about HHC, visit www.howardhughes.com or find us on Facebook, Twitter, Instagram and LinkedIn.
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