The North Bethesda Portfolio

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1 Mixed-Use Redevelopment Opportunity Office, Retail, Residential North Bethesda, MD Future Rendering EX E C U TIVE S U MMA R Y The North Bethesda Portfolio

2 Executive Summary Phase II As the exclusive representative for the Owner, Holliday Fenoglio Fowler, L.P. ( HFF ) is pleased to present the opportunity to acquire the North Bethesda Portfolio (the Property or the Site ). Comprised of four existing office/ retail buildings on 3.8 acres and a leasehold interest in Phase I an adjacent 5.4 acre surface parking lot (450 parking spaces), The North Bethesda Portfolio is a mixed-use, Metro-accessible redevelopment opportunity located on Rockville Pike in North Bethesda, Maryland. Redevelopment plans consist of three phases totaling 740,528 SF: Up to 464 residential units; Up to 200,000 SF of commercial space (office & retail); Parking for vehicles; Existing Office Phase III Continued use of an existing 63,650 SF, Class A office asset constructed in Located just one block south of the White Flint Metro Station (Red Line), the North Investment Highlights Bethesda Portfolio is situated in the heart of the White Flint Sector Plan, one of Significant development upside consisting of a fully entitled, North Bethesda Market, featuring a 52,000 SF Whole Foods, the North Bethesda 3.8 acre mixed-use development site prominently located on Portfolio is also in close proximity to transformative projects such as Federal Rockville Pike in North Bethesda, MD, complete with approved Realty Investment Trust s recently delivered Pike & Rose, as well as LCOR s North plans with a potential for 740,000 SF of mixed-use development. Bethesda Center and Lerner Enterprise s redevelopment of White Flint Mall. Montgomery County s most vibrant retail districts. In addition to being adjacent to Secure land basis with strong property cash flow consisting of four office/retail assets, anchored by build-to-suit tenant Georgetown Reflecting broader trends nationwide, office tenants and apartment dwellers University Medical Center (31,052 SF, LED: April 2019). alike have shown a strong preference for Metro-proximate properties, which Excellent access to Metro with the White Flint Metro Station (Red Line) less than a quarter mile from the Site. Located adjacent to the successful North Bethesda Market development, home to a 52,000 SF Whole Foods and a 55,000 SF LA Fitness, as well as an array of upscale restaurants and retailers, including Seasons 52, Arhaus and Brio Tuscan Grille, which offer the North Bethesda Portfolio a strong and immediately accessible amenity base. is exhibited on Rockville Pike by the strong outperformance of office and residential assets within a half-mile radius of the White Flint, Twinbrook, and Rockville Metro Stations. This subset of Metro-accessible office assets has an occupancy rate of 92%, reflecting vacancy that is half that of the broader North Bethesda/Potomac and Rockville submarkets. In concert with buildto-suit, anchor tenant Georgetown University Medical Center s long-term commitment to the North Bethesda Portfolio, the existing office/retail assets provide strong cash yields through the redevelopment period. This unique offering presents the opportunity for an investor to acquire an entitled, Metro-accessible, mixed-use redevelopment that can be phased over time, while enjoying reliable cash flow from the existing commercial assets. The ongoing transformation and redevelopment of White Flint ensures an investor considerable upside over the long-term and a yielding land play until that time. 2

3 Property Overview Property Address: Alternate Address(es): Rockville Pike NORTH BETHESDA PORTFOLIO PROPERTY OVERVIEW Rockville Pike 5640 Nicholson Lane Woodglen Drive 5650 Nicholson Lane Lutrell Lot Zoning: CR-4 CR-4 CR-4 CR-3 CR-3 Total Land Area: 1.76 acres 1.41 acres 0.60 acres 5.43 acres 9.20 acres Property Type: Class B Office Class B Office/Retail Class B Office/Retail Class A Office/Retail Surface Parking Lot Year Built/Renovated: 1963/ / / N/A Rentable Area (RSF): 40,742 56,145 42,663 63,650 N/A 203,200 Floors: 4* 4 4* 4* N/A Floorplate (RSF): ± 10,200 ± 14,000 ± 9,800 ± 21,750 N/A Occupancy: 9% 41% 58% 91% N/A Wtd Avg Remaining Lease Term: 0.6 yrs 0.9 yrs 2.5 yrs 4.7 yrs Ground Lease LED Phase I Phase II Existing/Phase III** Development Potential: Condominium Residential Commercial Residential ± 85,000 GFA ± 407,000 GFA ± 67,260 GFA ± 492,000 GFA 70 units/10 MPDU 335 units/49 MPDU (existing) 405 units/59 MPDU (existing) * Includes one below-grade level. ** Yet to be designed Phase III offers up to 90,000 SF of density to be added to Woodglen Drive. Retail Retail Commercial ± 75,000 GFA ± 25,000 GFA ± 100,000 GFA ± 67,260 GFA ± 67,260 GFA Total (existing) WHITE FLINT METRO STATION <0.25 MILES LUTRELL LOT 3

4 Executive Summary Phase I Retail & Residential Rendering Cash Flowing Redevelopment Opportunity The North Bethesda Portfolio presents rare flexibility to redevelop under the most ideal timing and economic scenario due to its existing, cashflow yielding office/retail assets. A thoughtfully phased redevelopment plan has been approved which allows future investors to reap the benefits of the region s overall revitalization while mitigating development and supply risks. The planned mix of apartments, condominiums, office and retail will further advance Rockville Pike s vision for a more dense, walkable and transit-oriented area. Accessibility The North Bethesda Portfolio is located within walking distance of the White Flint Metro Station (Red Line), enabling convenient access for future residents and existing office users to the broader Washington metropolitan area, including Walter Reed National Military Medical Center, National Institutes of Health (NIH), Washington, DC s CBD and Union Station. The North Bethesda Portfolio is also convenient to several of the region s major roadways. The Capital Beltway (I-495) is minutes south of the North Bethesda Portfolio via Rockville Pike, connecting the Property to the entire Mid- Atlantic region. Amenity Base A new vision for North Bethesda is coming into focus. Similar to the expansion that occurred in the Rosslyn-Ballston corridor, the redevelopment of North Bethesda Portfolio will continue the transformation of Rockville Pike into an attractive, walkable district appealing to both residents and office users. The North Bethesda Portfolio is at the doorstep of a considerable existing amenity base comprised of over 13 million SF of retail space within a five-mile radius of the Property. Immediately adjacent to North Bethesda Portfolio, North Bethesda Market offers convenient grocery and retail shopping and dining, while also cultivating a walkable urban area that will complement the North Bethesda Portfolio by providing a shadow anchor for retail tenants with the existing adjacent Whole Foods and LA Fitness locations. Pike & Rose, Federal Realty Investment Trust s new mixed-use development just a few blocks north of the North Bethesda Portfolio, offers an array of upscale dining and retail to Rockville Pike, including a luxury movie theater and bowling alley. Located directly across Rockville Pike from White Flint Mall, which is slated for transformative redevelopment that will further enhance the urbanization of the area. I-270 is less than two miles southwest of the Property by way of Old Georgetown Road and creates a vital corridor between several of the region s largest biotechnology employers along northern I-270 and NIH in North Bethesda. 4

5 James A. Meisel Stephen Dek Potts Jr. Andrew M. Weir Stephen C. Conley Executive Managing Director Matthew T. Nicholson Multi-Housing: David R. Nachison Multi-Housing: Alan Davis Financing: Susan B. Carras Associate Director WHITE FLINT METRO STATION <0.25 MILES NICHOLSON LANE 5640 NICHOLSON LANE RO LE VIL CK WOODGLEN ROCKVILLE PIKE E PIK DRIVE WOODGLEN ROCKVILLE PIKE ( HFF ) a Maryland licensed real estate broker HFF and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 23 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on HFF has been engaged by the owner of the property [properties] to market it [them] for sale. Information concerning the property [properties] described herein has been obtained from sources other than HFF and we make no representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all references to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a buyer. Buyers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change Pennsylvania Avenue, NW 5th Floor Washington, DC