Lakeforest Redevelopment Plan Seeks 600 More Housing Units
The developer wants to increase the residential cap to 2,200 units as demand for new office space in Gaithersburg declines.
Updated on Oct. 28, 2026 in Commercial
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WRS, Inc. has requested that the City of Gaithersburg increase the residential unit cap at the Lakeforest redevelopment site from 1,600 to 2,200 units. The developer aims to replace previously planned office and employment space with additional housing to better align with current market demand.
Why it matters
The proposed shift reflects local market realities where office vacancy rates exceed 19% and high construction costs make traditional office projects financially unfeasible. For local residents, this change signals a major transition for the 100-acre site from a mixed-use employment hub toward a higher-density residential neighborhood.
The proposal seeks to add 600 residential units to the previously capped 1,600-unit plan. These figures compare against existing approved plans for 750,000 square feet of employment space that the developer now deems unrealistic for the current market.
The players
WRS, Inc.
The private developer responsible for the acquisition and redevelopment of the former Lakeforest Mall site.
City of Gaithersburg
The municipal authority responsible for land-use planning and the approval of the site's development density.
The details
WRS, Inc. submitted written comments to the city proposing to reallocate space from the 100-acre site to account for weak regional demand for office space. With construction costs exceeding $400 per square foot in the Washington region, building new offices has become economically difficult when existing local office properties are selling for as low as $36 per square foot. The developer intends to file a new Sketch Plan to formalize this swap of office square footage for additional residential capacity.
Timeline
WRS, Inc. acquired the Lakeforest Mall property in 2019.
Lakeforest Mall closed permanently in March 2023.
A market analysis of office demand was commissioned by the city in December 2025.
WRS, Inc. submitted the written request for the unit increase on October 28, 2026.
Money Landscape
This move marks a significant departure from the original redevelopment scope established in the Build Gaithersburg 2040 Land Use Element. It reflects a broader regional trend where developers are abandoning stalled office projects in favor of housing to bypass saturated commercial markets.
Residents should monitor public hearing notices from the City of Gaithersburg regarding the upcoming Sketch Plan submission. This change will likely impact local infrastructure planning and the future mix of retail and residential amenities available within the neighborhood.
The takeaway
The pivot from office space to housing underscores the difficulty of new commercial construction in a market with high vacancy and development costs. Interested residents should watch for the next official Sketch Plan filing to understand the final distribution of retail and entertainment uses at the site.
Further reading
For more information on area development, visit Commercial.
Source note: This article includes information reported by The MoCo Show.
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