WRS Seeks to Increase Housing at Lakeforest Mall Site

The developer wants to add 600 residential units to the Gaithersburg redevelopment project by replacing planned office space.

Updated on Oct. 28, 2026 in Commercial

Screen-print poster illustration of a modern residential building facade, conveying the community redevelopment project in Gaithersburg. — WRS, Inc. has requested the City of Gaithersburg to allow an additional 600 residential units at the former Lakeforest Mall site. AI Illustration. Upload story photo >

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Should developers be allowed to replace planned office projects with new housing in your community?

WRS, Inc. has requested that the City of Gaithersburg increase the residential unit cap at the former Lakeforest Mall site from 1,600 to 2,200. This proposal aims to shift the development focus away from previously planned office space due to changing market conditions.

Why it matters

The requested change addresses the cooling demand for traditional office space in the area. A 2025 city-commissioned market analysis confirmed that new office construction is currently not viable given existing high vacancy rates.

The redevelopment site spans 100 acres and currently maintains approvals for 750,000 square feet of employment use and 470,000 square feet of commercial space. New office construction in the Washington region currently exceeds costs of $400 per square foot.

The players

WRS, Inc.

This is a real estate development firm that acquired the 100-acre Lakeforest Mall site for the purpose of large-scale redevelopment.

City of Gaithersburg

This local municipal government is responsible for reviewing land use modifications and maintaining the Build Gaithersburg 2040 vision.

The details

WRS, Inc. submitted written comments to the city on October 28, 2026, proposing a modification to the Build Gaithersburg 2040 Land Use Element. The firm plans to follow this request with a new Sketch Plan that reflects the updated mix of uses.

WRS, Inc. acquired the Lakeforest Mall property in 2019.
The Lakeforest Mall closed permanently in March 2023.
The city commissioned a market analysis regarding office demand in December 2025.
WRS, Inc. submitted formal comments requesting a residential unit increase on October 28, 2026.

Culture Shift

The proposal mirrors a broader national trend where developers pivot away from office-centric mixed-use projects toward residential-heavy layouts. This shift directly challenges the Build Gaithersburg 2040 Land Use Element, marking a departure from previous urban planning goals in the region.

Residents should anticipate changes to the neighborhood landscape as the site shifts from potential office employment to a more dense residential focus. The developer expects to announce additional retail and restaurant tenants in the near future, which may influence local amenity availability.

The takeaway

The move underscores the growing economic difficulty of justifying new office space when vacancy rates remain high across suburban markets. Investors and residents should track the updated Sketch Plan as it will define the density and commercial character of the project moving forward.