A few of these projects are to be supported by the new fund, company principal Tom Bozzuto tells GlobeSt.com's. Others are projects for the company's own account. Currently in the planning stages are three projects: a 200-unit, high-rise project with a retail component in Annapolis, a 200-unit project with 30,000 sf of retail at the University of Baltimore and a 250-unit project in Wyomissing, PA.
Other projects recently announced include Silver Place LLC, a JV between Bozzuto, Spaulding Slyer Investments and Harrison Development, to develop a new mixed-use complex on a 3.24-acre gateway site in Downtown Silver Spring. Called Silver Place, the project will include 358 mixed-income residential units, retail space for shops, cafes, restaurants and a grocery store; a nine-story, 120,000-sf office for Maryland-National Capital Park and Planning Commission; a 150,000-sf spec office building; and a public plaza.
Also in the works is the 24-acre parcel located adjacent to the Odenton MARC station, which the company plans to developed into a $150-million transit-oriented town center.
A retail element is part of most of these upcoming projects, Bozzuto notes. This direction--mixed-use development as opposed to stand-alone apartment projects--has been evolving at the firm over the last four years, he says. It was only over the past 12 months though that it really gained momentum. "Over the past few years we have been working to get to the point where the vast majority of our projects are mixed us. Now we are at that point," he tells GlobeSt.com.
Besides a real estate cycle that now favors multifamily, Bozzuto finds that mixed-use projects with retail and multifamily offer greater potential upside over the long term.
"My impression is that institutional purchasers who look to buy these kinds of properties will accept a 50 to 75 basis point lower cap rate or lower return in exchange for a more urbanized property," he says.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
