Maryland Office Building To Become Bioscience Incubator
The new buyers received the largest CPACE loan ever completed in the Frederick area
VaLogic LLC has acquired 7495 New Horizon Way, a 75,400-square-foot office building in Frederick, Md., for $7.7 million from Finmarc Management.
VaLogic, which services the life sciences sector, plans to transform the two-story property into a Good Manufacturing Practice (GMP)-compliant asset that could house multiple companies involved in the growing life sciences industry.
“VaLogic plans to use its expertise to renovate and reposition the existing office building to accommodate life sciences tenants needing [research and development]- or GMP-centric space,” Bill Robertson, VaLogic’s founder and president, told Commercial Observer. “According to experts, 13 leading markets are fueling the bulk of growth in the United States life sciences industry. Fourth on the list, among these preeminent markets, is the greater Washington, D.C.-Baltimore region, which includes this Frederick location.”
VaLogic also secured a $2.4 million commercial property-assessed clean energy (CPACE) loan sourced by MD Energy Advisors to make the changes. This is the largest CPACE loan ever completed in the Frederick area.
“A CPACE loan provides the perfect combination of below-rate financing and the injection of immediate equity to fuel VALogic’s vision to create long-term value in this building and fill an identified need in the life sciences industry,” Jason Schwartzberg, president of MD Energy Advisors, said. “The company brings an extremely high level of expertise to this project and is uniquely qualified to execute this repurposing strategy backed by their collective experience and understanding of the life sciences marketplace. The plan is thoughtful and based on extensive research.”
Among the planned upgrades are a comprehensive renovation of the building’s HVAC systems, featuring dedicated outdoor air system units, and upgrading the electrical and plumbing systems to serve the unique needs of the life sciences sector.
Interior renovations will allow end-users to construct laboratory space, cleanrooms, testing areas, wet labs and office space with specific temperature, humidity and air circulation and purification controls.
Originally built in 1992, the building sits on approximately 5 acres of land adjacent to MD Route 355. The building was 100 percent vacant at the time of the deal.
The City of Frederick is now home to nearly 80 bioscience companies. Commercial real estate located in bioscience clusters around the country continues to outperform the broader marketplace, but it’s been especially strong in Maryland.
Since Q1 2019, life sciences tenants have driven 870,000 square feet of leasing demand, nearly a quarter of all activity in suburban Maryland, according to CBRE. Rents are approaching new highs, especially for new construction.
“Both land and lab space in Frederick are significantly discounted to the southern parts of the I-270 Corridor, yielding strong demand among more price-conscious tenants and those seeking GMP and incubation facilities,” Robertson said. “In addition, with Frederick’s excellent transportation network, highly skilled and educated workforce, and proximity to Fort Detrick, these companies enjoy an innovative, supportive, and highly collaborative environment.”
CBRE Senior Vice President Frank C. Graybeal and First Vice President Brian Schmergel represented VaLogic in the deal. Cushman & Wakefield‘s Director, Megan Williams, Senior Director Scott Matthews, Managing Director Frank Andrews and Executive Director Peter Rosan represented Finmarc.