WRS, Inc., the owner and developer of the former Lakeforest Mall property in Gaithersburg, is asking the City to allow up to 600 additional residential units as part of the massive redevelopment project, potentially increasing the site’s maximum from 1,600 to 2,200 homes.
In written comments submitted October 28 as part of the Build Gaithersburg 2040 Draft Land Use Element process, WRS said changing market conditions have made the amount of office and other employment space currently envisioned for the property unrealistic.
The approved plans for the Lakeforest redevelopment currently allow for up to 1,600 dwelling units, 750,000 SF of employment uses, 250,000 SF of large-format retail, and 220,000 SF of neighborhood-scale commercial, entertainment and amusement uses.
WRS is asking the City to modify the existing 1,600-unit residential cap to allow as many as 2,200 units, with the additional housing replacing some of the employment space that the developer says is unlikely to be built under current market conditions. According to WRS, most, if not all, of the additional 600 homes could be for-sale market-rate units if that is the City’s preference.
The developer pointed to a December 2025 market analysis commissioned by the City, which found limited demand for new traditional office construction and indicated that future office growth in Gaithersburg is more likely to come through renovation, reuse and conversion of existing buildings.
WRS also cited the broader suburban Maryland office market, noting that office vacancy exceeds 19% and that no new office projects have been under construction in suburban Maryland during the past three years.
In its letter, WRS argued that the economics of new office construction make development particularly difficult. The company pointed to recent sales of office buildings near the Bethesda Metro station for approximately $36 to $43 per square foot, compared with what it says is a development cost of more than $400 per square foot for new employment buildings in the Washington region.
WRS said allowing additional housing would not prevent employment uses from eventually being developed at Lakeforest if market demand returns. The developer is requesting that language allowing up to 2,200 residential units be incorporated into the City’s Build Gaithersburg 2040 Land Use Element. WRS also plans to submit a new Sketch Plan reflecting changes to the mix of uses planned for portions of the property.
The request would ultimately require the City to modify the special condition that currently caps the Lakeforest redevelopment at 1,600 residential units. WRS maintains that replacing some planned employment space with housing would result in less traffic than what was previously analyzed for the approved development.
Meanwhile, work at the former mall property continues to move forward. WRS Vice President Kevin Rogers told The MoCoShow that Lakeforest Mall has now been completely demolished and sitework is well underway. Rogers also said WRS is getting closer to being in a position to announce additional retail and restaurant tenants for the redevelopment.
Lakeforest Mall closed permanently in March 2023 after nearly 45 years in operation. WRS acquired the property in 2019 and is working to transform the approximately 100-acre site into a mixed-use development with housing, retail, restaurants, entertainment, public spaces and other uses.
