In-Rel buys Bethesda Office in $30M Distress Sale
Sellers paid $133 million for the property in 2019
BY KEITH LORIA JANUARY 2, 2024 1:44 PM
7500 OLD GEORGETOWN ROAD.PHOTO: JOHN COLE
In-Rel Properties has acquired 7500 Old Georgetown Road, a 16-story office building in Bethesda, Md., in a short sale, Commercial Observer has learned.
In-Rel paid $29.85 million, according to public records — more than $100 million less than the last sale price just four years ago.
The seller, a joint venture between Rockwood Capital and Stonebridge, paid $133 million for the 335,000-square-foot, 40-year-old building in 2019. But the property fell into financial distress during the pandemic, and the building was just 40 percent leased at the time of the sale. This was despite a renovation that Rockwood and Stonebridge undertook in 2022.
The landlords still had more than $100 million left in loans, necessitating the deal, according to someone with knowledge of the sale.
“We specialize in revitalizing troubled office buildings,” Jackson Siegal, an adviser at In-Rel Properties, told CO. “We are very excited to be part of the growth in Bethesda. We think that folks are beginning to figure out their office requirements in this new hybrid work world, with many determining that some level of back to the office will be needed for mentorship, culture and collaboration. Our plan is to provide a work environment that incentivizes folks to come into the office.”
Dennis Udwin, In-Rel’s president, said the 2022 renovation was a factor in the buy.
“We are not just acquiring a property, we are investing in a prime location in the D.C. area,” Udwin said. “The timing might not have been favorable for the previous ownership, but they did an outstanding job renovating the exterior, lobbies, bathrooms, gym, and conference center. We are here to build on that foundation and unlock the property’s full potential.”
This is the first Washington, D.C.-area acquisition for the Lake Worth Beach, Fla.-based company, which has more than 3.5 million square feet under management in six states.