Development driveWith former PHICO building full, leasing agent sets 18-month time frame for construction at Silver Spring tract
After more than two years of steady leasing activity, the final space at the One Sterling Place office facility in Silver Spring Township is on the verge of being filled, renewing the push to build on adjacent pads already approved for development.
An 18,000-square-foot space on the top floor of the 228,000-square-foot, three-floor building was slated for an executed lease this week as contractors readied the space, said Thomas Posavec, the leasing agent and vice president of the office services group at East Pennsboro Township-based Landmark Commercial Realty Inc.
One Sterling Place is the former Pennsylvania Hospital Insurance Co., or PHICO, building.
Dauphin County-based Hoffer Properties acquired the building and about 50 adjacent acres at the end of 2004 from the state insurance department. The deal was for about $15 million and was followed by a year's worth of multimillion dollar renovations to the facility, which was built in 1985.
The investment has paid off during the last 24 to 30 months as Landmark has leased about 150,000 square feet inside, Posavec said.
"The (office) market has come back," he said.
The building is now home to 16 firms that run the gamut. Many fall into financial services, engineering, health care or defense contractor categories.
With the attraction to the Sterling Place location in full swing — the tract is at Route 114 and the Carlisle Pike, just minutes from Interstate 81 — Hoffer Properties is hoping to break ground within the next 18 months on two additional office buildings, Posavec said.
Each building would occupy about 120,000 square feet on about 20 acres along Route 114, he said, pegging the cost at $36 million. Once a lead anchor tenant is locked up, construction could start within 90 days and take about nine months to complete.
"I see medical coming out here," said Posavec, who is hoping to attract health insurers, defense contractors, engineering firms and possibly law firms.
Sterling Place could be comparable to the Cumberland Technology Park off I-81 in Hampden Township, Posavec said.
With larger office spaces few and far between in this area — those in the 15,000- to 25,000-square-foot range — this development opens up opportunity for growing companies, he said.
The preliminary plans for office use and a variety of retail commercial uses were approved in 2009 by the township, said Terri Martini, Silver Spring's assistant township manager.
Site work is under way for a planned 6-acre CarMax car dealership on the tract. The Richmond, Va.-based company expects to close soon on the property, said spokeswoman Elia Imler.
"While we don't have a solid grand open date yet, it generally takes at least a year, possibly longer, from the time we close to the time we are open for business," she said. "This store would stock approximately 300 vehicles and employ about 50 associates."
The stormwater management permit for the improvements was issued last week, Martini said.
An additional three pad sites near the road are available for possible restaurants, banking and other retail. A hotel near the frontage also is possible, Posavec said.
"We're trying to talk to everyone not here yet," he said.
The sales pitch: Location.
Sterling Place is near growing neighborhoods in the Cumberland Valley School District. It's also near a growing mix of retailers that call the Carlisle Pike home, including Wegmans, Giant, Target and Wal-Mart.
"If Wegmans did their research, we're only a quarter-mile away," Posavec said.
Naval Support Activity in Hampden Township, a major county employer, also is not far away. The Navy base and other surrounding military facilities in the area could entice defense contractors.