Lionsgate Bethesda’s Mistakes – What can We Learn?

A longtime Downtown Bethesda resident, I’ve had mixed feelings about The Lionsgate Condominiums at Old Georgetown and Woodmont. It never had “room to breathe” for one thing.  Its tight proximity to commercial/residential buildings on one side and a garage on the other made the The Lionsgate “less urban village”, and more a towering mediocrity.

– Maybe it’s the “miniature” balconies
**note to developers – yes, you can “sell” outside space!

– Maybe it was the lack of 2000 sq ft.+ units — again, a product in downtown Bethesda I know people are crying for…but even writing this, The Lionsgate frustrates the h#ll out of me…

Developers in The Gulf Coast & Madison:  They “Get It”

It seems developers in other areas of the countries “get it” – from oceanfront Gulf Shores condos to lakefront Madison condos … and beyond, the developers understand — build them big, and build them with adequate balcony space.

I know Downtown Bethesda isn’t the Gulf Coast or the lakes of Madison Wisconsin (Bethesda with a water view..hmmm!), but what all locations have in common is the concept of product comprehension — how, in this context, large condos will increasingly attract baby boomers who want to move down without sacrificing every amenity of single family home living (that’s square footage and balcony space just to make sure we’re clear!).

So this is my story and I’m sticking to it…in my humble opinion, The Lionsgate, in many ways, stands for what Bethesda condos need to strive to NOT be in the future, even when market conditions improve.

What Inspired My Lionsgate Bashing : – )

I received an e-mail today from The Lionsgate sales department today…last chance to pick up the last penthouse unit in the building. But take a peak at some of the “concessions”

“For those who’ve always dreamed of living in a luxurious penthouse, your time is running out. We now have only one remaining on our top floor—the Rodin. This two bedroom, 1580 square foot customizable floor plan already has high-end finishes throughout and stunning views of the bustling downtown Bethesda streets below, and now Lionsgate is willing to invest in additional floor plan changes and upgrades. Prices on this floor plan have recently been adjusted to under $1.2M….”

Did you see what I saw?  Willing to make changes to the floor plan?

Can Bethesda Learn From The Lionsgate & This Challenging Market

I know this is a tough market so it’s really hard to say “I told you so”…but in the same sense, this difficult market teaches us all some valuable lessons.  In this specific case, the Lionsgate is willing to change the floor plan because this market doesn’t allow “okay”, it demands something closer to perfection.

More importantly, I hope this market has taught (or will teach) developers, homebuilders, and Realtors (listing agents in this context), to listen, research, and listen some more. If we do this, perhaps we’ll be able to better answer this not so simple question — “what do home buyers want?”.

**Over 2000 sq. ft. & large balconies – just wanted to get that in one more time!

Lionsgate Condos Bethesda

Lionsgate Condos in Bethesda

Lionsgate Bethesda Condos
Lionsgate Bethesda sales reps report 80% sold - I'm not sold on that 🙂 I'd venture to guess 70% is more accurate

I love Downtown Bethesda and was excited about these condos for quite some time.  The developement has all the ammenities:24-hour front desk, a fully equipped fitness center, an executive center and a rooftop terrace.  But in my humble opinion, many of the units are location challenged (that is, some face a parking structure).  Moreover none of the units have a lot of “outside” space — even the penthouse units have small balconies.  On a humid DC day like today, it may not be a draw but developers need to learn that “yes, you can sell outside space”.  You can learn more about Lionsgate Condos in Bethesda on one of Bethesda real estate guides.  You can also view some of the units still for sale.

Location, Location, LOCATION WITHING A LOCATION

I didn’t quite get that right did I?….or did I? I think I nailed it in my humble opinion…

I remember when “location within a location” became relevant again. I can even remember the first time I said it. I was showing several high end Bethesda condos in the same development a couple years ago. It was mid 2006, a year removed from the madness of 2nd quarter 2005 (some of you remember that time;when you had to write a contingent free offer, escalate tens of thousands of dollars above asking price, and give away your first born child for a chance at getting that home :- ).

So, back to showing the condos: brand new, well laid out, and nice finishes…..all around one of the better developments in the Bethesda area. But the market had slowed a bit, my client knew it (I made sure he did!), and the developer knew it too. So when it was time to decide on two very similar units on different tiers of the building at relatively comparable price-points, my client turned to me and asked:

“Which one do you think?”.

Because it wasn’t an investment property or anything my client was planning on moving out of for the foreseeable future, I suggested he choose the one that felt most like home.

“But which one has more value?”, he insisted.

It was by no means a roll your eyes kind of question. I told him if he was happy with both, he should buy the top floor unit with the western exposure. It was $30K more than a similar unit facing east towards a busy road.  The question of “value” became synonymous with “marketability” and that’s where we discussed the concept of the Bethesda Condo Micro Markets. That is, we were past the point where the market demanded a “take what you can get mentality”. On the contrary, in this new real estate environment, there was a time to analyze values on much smaller scales. It wasn’t just the price per square foot, instead it was a combination of a lot of small things…not the least of which was the location within the building that would make for a more saleable unit in the future.

There are many downtown Bethesda condo units but very few with un-obstructed, western exposures. There are many other examples of micro-markets and most have to do with demographics, supply, and demand… just a little Econ 101. For example, there’s a crying need in Bethesda for larger condo units or homes designed with one-story living in mind.

The picture above is a little dark, but it was taken this evening from a family friend’s home in Bethesda. It reminded me of my client and reminded me to kindly remind everyone that even in a market of “bargains”, it’s important to continue to analyze that micro-market. It’s not just the building, it’s not just the street and it’s certainly not just the price…instead, it’s combination of all the little pieces that make up value in our daily lives….like a sunset!

**Oh, in case you were wondering, my client ended up going with the unit with the Western exposures.