Great Commercial Real Estate Reads You Don’t Want to Miss

Don’t have time to scour the internet for the most interesting commercial real estate news? We’ve got you covered!

We follow what seems like countless commercial real estate newsletters, blogs, and columnists. We read and curate the most interesting and informative articles and send those links daily to MacRo’s Twitter followers. For those of you who haven’t caught the Twitter bug, here are some recent articles worth a read:

Apartment Trends 2012

The first line grabbed my attention: “The year 2011 will go down in history as the year when the rental housing and multifamily apartment rental markets began to tip in favor of owners and landlords.”

Commercial Mortgage Bankers Are Doing Deals As the Real Estate Market Breathes New Signs of Life

Did you know that growth in demand for hotel rooms mirrors growth in GDP? Neither did I, until I read this article. Interesting to hear if our friends at Plamondon find this to be true in the Frederick community!

Land Use Zoning Conflicts

“Eighty-six years ago, the U.S. Supreme Court validated the practice now known as modern-day zoning. However, as urban patterns change — both voluntarily and involuntarily —contemporary land use conflicts emerge.” Yeah, tell us about it!

Annexed Farmland Clear for Developing & Frederick City Annexation Would Not Increase Number of Homes

Speaking of land use conflicts, Frederick County has given the thumbs up to developers of the Crum and Thatcher properties on Rt. 15, citing the proximity to Ft. Detrick and the City of Frederick “smart growth” areas as reasons to move forward. However, Friends of Frederick County is fuming over it, despite the fact that the developers have agreed to lower the density of the project in response to market studies. As always, the comments posted to FNP article are highly entertaining (and egregiously misspelled).

Maryland to Get Nearly $1B in Foreclosure Aid

About $43 million of Maryland’s $959 million will go to Frederick County residents affected by the mortgage crisis. The lion’s share of the settlement is intended for homeowners in danger of foreclosure; let’s hope it works!

The Next Office:  Why CEOs are Paying Attention

The way today’s workforce behaves and interacts within the office environment is evolving dramatically. This article covers the leading edge of office space designs that bring the most return from a business’s second-most expensive asset: real estate.

We’ll share the best of our Twitter feed in here from time to time, but if you don’t want to wait, follow us @RockyMackCRE!

On a side note, please bear with us as we’ve curated so much content that our site needs a bigger home! We are in the process of transferring our website and apologize for any delays you may experience on our site. Thanks!

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He also writes for TheTentacle.com and Want2Dish.com

Lessons from the New Third World- Frederick, Maryland

Can Leaders of Maryland and Frederick County be the Architects of a Regional Economic Recovery?

Good news is trickling in about the economy: signs of job growth, record corporate profits, a down tick in real estate foreclosures.

But it still feels as though the entire country is collectively holding its breath, waiting… waiting for the outcome of the 2012 presidential elections, waiting to see if the European Union can prevent member country defaults, waiting for the housing market to enter a sustained recovery.

Are you getting tired of holding your breath?

If so, here’s a good read: Boomerang:  Lessons from the New Third World, written by Michael Lewis, financial journalist and author of Liar’s Poker.

Boomerang came together from a series of articles that Lewis wrote for Vanity Fair magazine, and you can find most of those articles on their website. They are worth a read, if you want to understand the series of events that took the International Monetary Fund (IMF) to the brink of bankruptcy, and the potential impact to the fiscal health of the U.S.

The final chapter of the book is the focus of this article, and begins with Lewis interviewing Meredith Whitney, a banking analyst and frequent contributor to a variety of cable news programs.

Depending on whom you ask Meredith Whitney is either prophet or pariah. She appeared on 60 Minutes about a year ago predicting that U.S. cities and municipalities are in such dire fiscal trouble that there could be 50-100 defaults in the municipal bond (muni) market in the coming year.

The furor that ensued in the muni market as a result of that appearance resulted in a temporary crash and several death threats to her!

The defaults Whitney predicted have not come to pass, but what she says about the importance of fiscal responsibility at the state, city, and county levels makes a lot of sense.

States and local municipalities piled up debt and took extraordinary risks with pension funds just like corporations did during the go-go years of 2002-2008. Many states are now suffering because stock market gains failed to materialize, state spending ballooned, health care plans were underfunded, real estate property tax revenues declined, and federal subsidies were cut.

The states will survive, because they can cut funding to municipalities to prevent default, but where does that leave our cities and towns?

Whitney’s theory is that in recovering from this economic recession, the U.S. will reorganize into a collection of regional economies–“zones of financial security and zones of financial crisis”–with those regions where companies are able to flourish being the strongest. Obviously, individuals will go where the good jobs are, leaving those who do not have the means to follow jobs living in the areas that can least afford to support them.

A vicious cycle ensues.

So how do we prevent Maryland and Frederick from becoming a “third world” region of the U.S.?

Third World? “Oh, give me a break!” you might say.

Right now, our proximity to D.C. ensures a plenitude of federal jobs, to the tune of about 42% of all jobs in the region.

Those jobs have insulated Maryland and Frederick from the worst side effects of this recession, but 42% is an awful lot of eggs in the federal basket, in this man’s opinion.

If Maryland (and by extension Frederick County) is going to remain a region of financial security—a desirable place for people to live and corporations to locate—our leaders have their work cut out for them.

Up front, state government needs a serious ideological adjustment. Governor O’Malley and his administration need to understand how important an influx of corporate jobs are going to be to this region, and what “business friendly” really looks like. It’s a shame that Maryland had to resort to bribing Bechtel to the tune of $9.8 million to keep just a part of their operations here.

The MacRo Report Blog has repeatedly featured posts about PlanMaryland, which is in fact taking our state in the opposite direction of business friendly.

On the local level, the Frederick Board of County Commissioners led by Blaine Young has taken dramatic and quite controversial steps to ensure that Frederick enjoys fiscal health, through a focus on the following:

While not taking as aggressive an effort as the county government, the leaders of the City of Frederick have moved positively toward trying to ensure that their treasury remains solvent and can meet its obligations.

What does the success of these endeavors depend upon?

First and foremost, voters should pay very careful attention to who they elect to run our state and local governments!

Conservatives may be lukewarm toward the current slate of presidential candidates, but it’s clear from this blogger’s perspective that the majority of the efforts made by our local elected leaders are pressing forward with an approach to limiting government as a means of lifting our economy out of this recession.

If the State of Maryland doesn’t get with the program, then Frederick is going to need to develop greater autonomy in creating its own micro-economy. A charter government structure could go a long way to establishing greater control of Frederick’s economic destiny.

What do you think?

Can Frederick County stop holding its breath and start engineering its own economic recovery?

Do you believe that despite the efforts within our county to be more business friendly, that Maryland is tightening the noose on the state’s economic competitiveness in this region?

How would this region survive major cuts in federal spending and jobs?

Will local corporations and citizens continue their outmigration to the greener pastures of Virginia and other states?

Speaking of business friendly, stay tuned for a future post when we answer the question “what does business friendly REALLY look like?”

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He also writes for TheTentacle.com and Want2Dish.com

Frederick County’s Top Five Retail Real Property Deals of 2011

The $61 million sale of the Wegman’s shopping center tops a list that includes another new restaurant for Bryan Voltaggio and the rebranded SportsPlex.

How did we miss THE BIGGEST real estate deal in Frederick in our post 5 Largest Commercial Real Estate Deals of 2011?! Duh!

We correct our error below with a list of Frederick’s top five retail real property deals below. The retail sector of commercial real estate nationwide has been slow to recover from the recession, but 2011 was a great year for retail in Frederick County. Combined, the top five retail deals were worth $72 million, a massive increase from $24 million posted by 2010’s top five.

Frederick’s Top 5 Retail Space Deals of 2011

Number 5:  $1,650,000   Jenkins Motors Dealership 880 N. East Street ($81.20 s/f)

Swordfish Partners LLC (the dynamic restaurant duo of Hilda Staples and Bryan Voltaggio) scooped up the old Jenkins Motors dealership from Corsica Corp in April at the bargain price of $81.20 sf. The 20,321 s/f property had been on the market for about five years; the listing price started at $5,500,000. Staples and Voltaggio believe the showroom architecture will lend itself well to a diner, which is what they plan to open in the space.

Number 4: $2,575,000   M&T Bank 91 Routzahn’s Way ($585.23 s/f)

91-MTRW LLC purchased the M&T Bank building across from Clemson’s Corner from Worman’s Mill Acre LLC in September. The property is 4,400 square feet in size, and was on the market for only a day.

Number 3:  $2,600,000   Mountain Gate Plaza ($346.67 s/f)

140 Frederick Road LLC purchased Mountain Gate Plaza at 140 Frederick Road in Thurmont from Old Line Bank in June.  Old Line Bank had foreclosed on the property when Blue Mountain Realty, LLC defaulted. The building, which was built in 1986, is 7,500 square feet and the property includes a gas station. The tenants are listed as 7-11, Fratelli Pizza and U-Haul.

Number 2:  $4,140,000   Frederick SportsPlex ($63.69 s/f)

John Laughlin of Frederick SportsPlex Management LLC sold the Frederick SportsPlex at 1845 Brookfield Court to longtime tenant and SportsPlex manager Tony Checchia of FISCquisition LLC in November. “Tony C”, as he is known to the community, has rebranded the 65,000 building and his business as the Frederick Indoor Sports Center.

Number 1: $61,000,000   Clemson’s Corner Shopping Center ($266.38 s/f)

We missed including this top deal of 2011 on our earlier list because it closed in late December. Atapco Properties sold three Clemson’s Corner properties (including 7810, 7820, and 7830-7840 Worman’s Mill Road) to JP Morgan Asset Management. According to CoStar, Atapco (who also jointly developed the property) had planned all along on selling it once construction had finished and lease-up had occurred. The property, totalling 219,019 s/f in size, was reportedly 98% leased at the time of the sale.

So far, all sectors of commercial real estate in Frederick improved substantially in 2011 over the prior year. Does this indicate a continuing positive direction for 2012? Stay tuned to the MacRo Report Blog as we continue to track all land and commercial real estate trends and issues in Frederick County!

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He also writes for TheTentacle.com and Want2Dish.com

Ouch! or Not! Touching the Buttons of Charter Home Rule can be HOT!

Charter Home Rule draft constitution rapidly taking shape … Have you chimed in yet?

I have made no secret of my belief that Frederick’s current form of government needs serious improvement to keep up with the needs of this county. With such dramatic swings in political direction every four years, and now claims by some that the current Board of County Commissioners is ruled by one individual, isn’t it time for a more balanced approach to governing?

Putting more than mouth and words to the topic, I have truly enjoyed serving as a member of the Charter Writing Board that was appointed ten months ago by the BoCC.

Using the  contents of Cecil County’s Charter as a template, the group has been diligently discussing and debating a considerable portion of a draft document.

It’s hard to believe that barely half a year remains to finish drafting the charter and rally full support of the citizens of Frederick before fall elections take place.

The Charter Board outreach meetings (a total of 25 in all) generated tremendous input from residents of all corners of Frederick County; however, those meetings were not intended to be the end of citizen participation in this process.  Now that the board is at the critical stage of developing the charter itself, community feedback is more important than ever!

Below is a brief rundown of the most significant points that have been vetted thus far in the draft of the Charter of Frederick County.  Please keep in mind that these ideas remain subject to change as community input is received right up to the point of the scheduled final draft in June:

  • Councilmanic Districts:  The draft charter divides Frederick County into five council districts.  A council member will reside in each of the five districts and be nominated and elected by voters.  In a previous post on the MacRo Report Blog, we posed the question of Charter Home Rule: Councilmanic Districts or Not?  This is probably one of the hottest issues among those who are engaged … should voters be restricted to voting for just one local legislative council representative or up to 5 at-large members?
  • County Executive:  Thus far, the Charter Board members lean toward a county executive who will be elected by registered voters of the entire county.  Concerns still run deep over the amount of power this individual will have over our government.  The MacRo Report dug deeply into this topic in a post entitled Charter Home Rule: A Strong County Executive? To put it succinctly:  it is the role of the county council to make the laws and policies, and it is the role of the county executive to carry out those policies.  Then it comes down to checks and balances.
  • Term Limits:  How do you feel about term limits for our elected officials? It is being proposed that there be three consecutive terms for council members and two consecutive terms for the county executive. Are term limits a good idea?  If so, is the idea of three and two the right mix?
  • Executive Veto:  Speaking of checks and balances, the board is proposing that the county executive has the power to veto legislation passed by the council, although the council may override the veto with a four vote majority.
  • Voter Referendum:  With three exceptions, a law (or part of a law) may be referred to voters for approval if a petition signed by 10% of the registered voters is filed.  This is a big deal for Frederick County citizens, because under the commissioner form of governing, the state of Maryland does not provide citizens the right to petition to change local policy.
  • Budget and finance are the next big issues the board will be tackling on tonight’s agenda.  Determining who has the final pull on the purse strings is always a Hot Button issue at any level of government.  Where to place the authority of the county executive as opposed to the county council in developing the county budget is truly about checks.  It will be a good debate, for sure … what are your thoughts?

These are just a few buttons that have been pressed as place holders for further discussion in the final round this spring.

The board is continuously seeking input at every step of this process.  Please let us know your thoughts!

The Charter Board meets again tonight at 7:00 PM at Winchester Hall, in the Commissioner’s Hearing Room on the 3rd floor.

If you have an opinion about how the government of Frederick County should be structured, please attend the meetings, watch the broadcasts on Cable Channel 19 (FGC-TV), and/or email the members with questions and comments at charterboard@frederickcountymd.com.

Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board. He also writes forTheTentacle.com and Want2Dish.com.

Top 7 Large Lot Land Deals From the Last 24 Months

Some call them small farms, farmettes, or just large building lots; either way, they were hit hard by the real estate crash.

Unimproved residential lot values are more closely tied to what is going on in residential real estate than commercial real estate, and they ride a steeper roller coaster.  When housing is hot, land values are hotter.  When housing cools off, land values plummet, and that was the case for properties between 20 and 100 acres in size, what we call “large lots.”

During the past two months, we have begun to see an uptick in interest in Frederick County land listings.  We aren’t sure if this is due to consumer confidence or if activity in the housing market has begun to trickle down.  Either way, it’s too soon to call it a trend—but we are keeping a close and optimistic eye on Frederick’s land market.

Here are the top seven recent large lot sales in Frederick County.  With the volume of closings in this market segment being low the last two years, we’ve cast our net across the last two years to give our readers a better perspective.

All of these properties are “land only” and are usually purchased by families that will conduct some type of sideline agricultural activity on the land, often times an equestrian use or niche farming.

Top Frederick County Large Lot Deals in 2010 and 2011

1.  $515, 225 (68 acres)   9315 Frostown Road, Myersville

MacRo Ltd. was the listing agent on this deal, a remainder parcel with expansive views of Middletown Valley.  It sold to the State of Maryland in November of 2010 for expansion of South Mountain Battlefield.

2.  $450,000 (93 acres)   9300 block Pear Lane, Frederick

This was a foreclosure sale of REO by the lender in January of 2010.

3.  $388,500 (25 acres)   9309 Frostown Road, Myersville

MacRo, Ltd. was the listing agent on this deal as well, which closed in November of 2010. The price per acre on this sale was $15,533 – the highest on our list – due primarily to its desirable location and exceptional views from the approved home site.  The lesson here is that premium lots can still command premium prices, even in this market.  This site was also acquired by the state for South Mountain Battlefield.

4.  $360,000 (28 acres)   14528 Peddicord Road, Mt. Airy

This property, which sold in October of 2010, had been on the market for over four years with an original asking price of $675,000. It’s a good example of the decline in land values since 2006.

5.  $339,000 (29 acres)   5310 Old Middletown Road, Jefferson

MacRo was listing agent. This property, which closed in May of 2011, previously sold in 2002 for $270,000 and is a good example of the net increase in land values over the past ten years – the first sale was before the “boom” and the most recent sale was after the “bust.” A 25% gain in price over this period, not bad!

6.   $305,000 (73 acres)   11900 block of Hessong Bridge Road, Thurmont

The price per acre of $4,162—the lowest on our list—is due to the fact that this was an estate sale of raw farm land with no approval for a private septic system.  The sale closed this past November.

7.   $295,000 (29 acres)   12259 Oak Hill Road, Woodsboro

Comparing the price per acre on this sale ($10,347) with the Hessong Bridge Road lot ($4,162), which is less than 5 miles away, illustrates two key points. An approved septic system and a well can add roughly $100,000 to property value and ‘price per acre’ drops substantially as the size of the property increases.  The sale closed in June of 2010.

Looking for more information on lot and lands sales in Frederick?  We covered the really big commercial land deals in our post Top 5 Land Real Estate Deals in Frederick. We’ll review sales of 100+ acre properties, what we classify as farms, in a future post.

Stay tuned!

This article presented by Dave Wilkinson. Dave is a licensed Realtor and brokers many of MacRo’s real estate building lot listings, using his knowledge of zoning and subdivision regulations, real estate market conditions, and land development options to help MacRo’s clients achieve their goals. Contact Dave at 301-748-5670 or dave@macroltd.com

Land Use Cage Match: Are You Ready for This?

Tune in to WFMD on Thursday, February 9, 2012 to debate who REALLY controls the use and zoning of Frederick County real estate!

The fight rages on as the Frederick County Board of County Commissioners (BoCC) press forward with the Comprehensive Plan and Zoning Review.

The Planning Commission chose in November of last year to essentially blow off the request by the Board to, in essence, reopen the 2010 Comprehensive Plan adopted by the previous BoCC (le

ad by past president Jan Gardner).

In the name of controlling sprawl and runaway growth, the Gardner board drastically hacked down zoning of nearly 500 parcels of residential land and commercial real estate throughout the county.  In an effort to come up with a minimal means of meeting the state mandated 36,000 new housing units by 2030, that board seemed to have used the same “Fuzzy Math” formula developed during the 2000 U.S. Presidential campaign.

In several posts on the MacRo Report Blog and the Tentacle.com, this writer has attempted to show how no-growth mathematics will eventually place Frederick County in a situation where there will be a serious shortage to single family building lots.  This may be hard to believe given the current economic state of the nation, but nevertheless, it is true.

More recently, much has been said and written about what appears to be political grandstanding by planning commission members Bob White and Catherine Forrence as they claim that the Young-lead BoCC had no authority to request that the 2010 Comprehensive Plan be reopened for a complete Comprehensive Plan and Zoning Review.

After a couple of meetings, it became clear that a good bit of pregame choreography went into their final meeting of November 17, 2011 on the matter, with an approved motion that the commission “Cease and Desist” all further effort on the BoCC’s request.

Unshaken, Board President Blaine Young has pressed on with the public hearings where the 193 rejected applicants for rezoning consideration are being given a chance to plead their cases for reinstatement and other zoning changes.

Stirred up by all this madness, former Frederick resident and Jack-of-All-Trades (you name it he can do it, and/or knows everything about it) Adam Avery jumped on the opportunity to host a “Talk Radio Cage Match” of opposing views on this issue featuring yours truly and Mr. White himself.

Listen live at 3:00 PM EST on 930 AM radio (www.WFMD.com), Thursday, February 9, 2012 and join in on what should be a lively debate on local Frederick land use policy.

  • Can White defend his statement that the Board of County Commissioners has no authority to initiate a comprehensive plan review?
  • Did the 2010 plan provide for enough residential growth over the next 20 years?
  • Were the owners of nearly 500 properties that were down-zoned treated fairly by the Gardner board?
  • Is housing the best pathway to strong and vital business growth in Frederick County?
  • Is the Land Development community a bunch of greedy, money grabbing carpetbaggers?
  • Is it true that the current Board is under “One-Man Rule” by Blaine Young?
  • Is there a better way to bring balance to the land use planning process … could Charter Government be the answer?
  • What impact will Governor O’Malley’s effort to mandate PlanMaryland on all state jurisdictions have on local processes?
  • Do property rights have any value under Maryland law?

No doubt this will be gripping listening!  Punches may fly and decibels may rise.

Who will prevail in defending his position?

Find time to listen, and call in on Thursday to express your opinions at 301-694-9363!

Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board. He also writes forTheTentacle.com and Want2Dish.com.

Five Leasing Lessons from the Occupy Wall Street Movement

MacRo, Ltd is starting a new movement:  Occupy Commercial Real Estate!

It all started in New York City last fall with the Occupy Wall Street (OWS) movement and then has spread across the nation.

Something must have worked, because from a real estate perspective, while lease rates have fallen or flattened the occupancy rates for Class A commercial office buildings in lower Manhattan have improved to around 92%!

Driving through the historic City of Frederick by way of South Market Street last week, you couldn’t help but notice that the Occupy Frederick movement was “occupying” some prime real estate on Carroll Creek. Only in our beautiful downtown could the “Occupy” movement find such a charming spot for a protest.

In a daze of wonderment, I thought could this small band of peaceful vagabonds bring luck to an increase in occupancy of commercial real estate in Frederick, Maryland?

How do you improve Frederick’s commercial occupancy rates in a recession when businesses are downsizing, failing, or brilliantly increasing productivity with technology instead of humans?

You start by keeping the {good} tenants you already have.

This is Real Estate Marketing 101, folks. Not something that the OWSers understand, mind you.

But statistics show that on average it costs roughly five times as much to find and sign a new customer as it does to keep the birds in hand.

Maybe this isn’t such a big deal if you are GoDaddy or McDonald’s, but five times the cost of marketing and signing a new commercial lease is a heck of an expense to a landlord. Not to mention the costs of carrying vacant space, the impact of turnover on your building’s market value, the risk of replacing a good tenant with a marginal one… this list could go on for a while.

Here are some quick tips to prevent your tenants from occupying someone else’s space:

  1. Get to know them. Your tenants are your bread and butter. Follow their industries, their business successes and failures, and be sure that you stay in constant contact. Good communication will always pay off.
  2. Play ball. If a good tenant of long standing asks for a rent reduction or lease re-negotiation, be open-minded. Landlords notoriously underestimate the costs incurred in finding a new tenant in a sluggish economy. (Don’t re-negotiate yourself, though—call us! There is good reason for this besides the fact that we’d like your business!)
  3. To heck with the exit interview. Keep in mind that in the current real estate market, tenants can easily feel tempted to seek better lease terms or nicer facilities. Check with your tenants well in advance to be sure they are planning to renew their leases. If a tenant hands in notice that they are moving elsewhere, ask WHY they are leaving before they sign that new lease! You would be amazed at the turnover than can be prevented by simple accommodations.
  4. Offer re-signing bonuses. This is a proactive way to prevent a tenant from exploring other options when lease renewal time comes around.
  5. Speaking of proactive … be proactive! If you’ve noticed a tenant’s business has hit a prolonged rough patch, or they have been carrying significant shadow space, or their business is booming and they are bursting at the seams… don’t wait for them to come to you. Get a commercial agent involved and start on Plan B now!

Do you need help dealing with (or preventing!) impending tenant turnover? Call MacRo!

We can assist with lease re-negotiations, listings for new tenants, or “Plan B.”  Contact Rocky Mackintosh at 301-698-9696 or visit www.macroltd.com for more information.

Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board. He also writes forTheTentacle.com and Want2Dish.com.

7 Top Industrial Real Estate Sales in 2011

Warehouse sales were strong in 2011 for Frederick County, a trend that is expected to rise in 2012.

This year’s top industrial/warehouse sales totaled $40 million, a big jump from $12 million for the top seven transactions of 2010.

We covered the top two industrial property sales of 2011 in our 5 Largest Commercial Real Estate Deals in Frederick County, Maryland post, so in the interest of providing new information we beefed up this list with a couple of extra deals to bring the total to lucky seven.

Number 1: $14,731,019   Spectrum Drive Portfolio   ($91.81 sq/ft)

Washington Real Estate Investment Trust, a Rockville-based REIT, sold five Spectrum Drive flex industrial properties to AREA Property Partners of New York.  The five Spectrum Drive buildings were part of a 40-property portfolio purchase totaling $235.8 million and including properties throughout Maryland and Northern Virginia.  Total combined square footage of the buildings in the Frederick portion of the portfolio is 160,445.

Number 2:  $8,500,000   270 Interstate Court   ($82.32 sq/ft)

A group controlled by Gail Guyton of Morgan Keller sold 270 Interstate Court, a 103,250 SF industrial warehouse building, to Leo Rocca of 260 Interstate LLC in March. Colonial Sash and Door was the key tenant at time of sale, but Stulz Air Technology now leases a large portion of the building.

Number 3:  $5,450,000   U-Haul Mini Storage

AREC 14 LLC purchased the U-Haul Moving and Storage of Frederick facilities at 400-410 Prospect Boulevard in November from Amerco Real Estate Company.  Both companies appear to be related to U-Haul.  Information was not readily available on the square footage of the storage buildings.

Number 4: $4,175,388   Industrial Center East   ($54.21 sq/ft)

Frederick Ice LLC sold 10 units at 1539 Tilco Drive in Frederick to H&G Ice Frederick LLC in June.  The sale encompassed 18 condo units that totaled about 77,029 square feet. The units were vacant at the time of sale.  This was an investment purchase by H&G Ice; they plan to sell some units and rent the remainder.  (They quickly flipped unit 124 in August, see #6 below.)

Number 5:  $2,848,900   8005 Reichs Ford Road   ($166.23 sq/ft)

MacRo, Ltd. facilitated this real estate transaction. Local entrepreneur Brian Sclar of Reliable Recycling purchased this from Wastler IIII, LLC in June.  The 5.85 acre site includes a 17,138 square-foot industrial building.  This unique building was previously occupied by an affiliate of the owner: Wastler Construction.  Reliable Recycling of took full occupancy of the building. This was a hot property as reflected by the final sale price. The site went on the market in November 2010 and within days received an offer for over $3 million.  After 60 days of study, the first purchaser terminated.  Within one week two more proposals were presented, one of which was Sclar.

Number 6:  $2,308,500   Industrial Center East   ($90.07 sq/ft)

H&G Ice Frederick LLC sold condominium unit 124 of 1539 Tilco Drive to DMAC Properties LLC in August.  The unit is 25,629 square feet.

Number 7:  $1,970,000   12061 Old National Pike   ($51.84 sq/ft)

Tri M Properties LLC purchased a 38,000 square foot industrial self-storage building on Old National Pike from Brian Loffredo in March.

Looking for a solid commercial real estate investment in 2012?  Industrial property is a segment to pay close attention to!  Coy Davidson of Colliers International recently predicted in The Tenant Advisor that warehouse properties are going to be the new rising star of commercial real estate in 2012.

We’ll talk more about why Davidson and his analysts think warehouse is a good bet in a future post.  We’ll be summarizing Frederick County’s 2012 commercial real estate outlook by segment:  office, industrial, multifamily, and land.  Stay tuned!

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He also writes for TheTentacle.com and Want2Dish.com

5 Largest Real Estate Office Property Sales 2011

Office condos take the prize for hottest commodity in Frederick, Maryland in 2011!

Check out Frederick’s top five office deals below. Combined, they were worth $48 million in sales, a huge increase from $10 million posted by 2010’s top five. Frederick’s commercial office market hasn’t seen a year like this since 2008!

Number 5:  $1,908,550   Conley Farm Building Unit 202

Almine LLC purchased condominium Unit 202 of the Conley Farm Building through Thomas Clagett of Clagett Enterprises, Inc. in October. The unit is 7,981 square feet ($239.14 price/sf).

Number 4: $2,525,000   Cannon Hill

Ruppert Properties purchased the Cannon Hill condominium office building at 47 E. South Street from Dan Lawton of East South Street LLC in June. This appears to be a bargain at $151.71 per square foot, given the excellent location of this building.  The property (16,644 square feet in size) consists of 12 office units and was 80% leased at the time of sale.

Number 3:  $2,670,000  Chairman’s Court

MacRo, Ltd. facilitated this deal, which was a portfolio sale of all three office condos in the Chairman’s Court building. COMSTAR Federal Credit Union purchased the units at 5210 Chairman’s Court in February from all three of the property owners: ArmCo, LLC; MP Holdings, LLC; and Hackers, LLC. The building is 15,011 square feet.  COMSTAR purchased the property as a user and subsequently moved their office headquarters from Montgomery County to Frederick.

Number 2:  $2,800,000  Urbana Professional Center Unit 100

Urbana Builders Inc. (that being local attorney Greg Burgee, MAI appraiser Bud McPherson and other notables) sold the entire lower level Unit 100 of the condominium building of the Urbana Professional Center building (3430 Worthington Blvd) to Frederick Business Properties in July. The unit is 10,380 square feet ($269.75 price/sf). Frederick Memorial Hospital (FMH) tenant and has located satellite facility there to serve the growing Urbana community. The upper level was sold in a number of units to physician practices that are certified to work at FMH.

Number 1: $38,000,000  Banner Life Building

As we reported in our post 5 Largest Commercial Real Estate Deals of 2011, Natelli Communities sold the Banner Life Building in Urbana to Cole Real Estate Investments, a Phoenix-based REIT, in June. Banner Life fully occupies the 115,000 square foot building.

It’s interesting to note that with the exception of the Banner Life Building, the top office sales in Frederick County were office condominiums.

The office condominium market has been challenging during the recession, but recently low and mid-sized tenants (those using 6,000-20,000 square feet) have become motivated to take advantage of depressed values. By piecing together units in a condominium, businesses are able to gain an ownership stake in their office space without purchasing an entire office building.

Are YOU in the market for new office space?

Stay tuned for some enticing offers located that will appear soon on the Listings page of the MacRo, Ltd. website. These are located in downtown Frederick’s premier office building along the Carroll Creek Linear Park — South Market Center!

Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board. He also writes forTheTentacle.com and Want2Dish.com.

The Real Estate Dilemma for Public Charter Schools

I guess one can call it “Straight Jacket Approval” in that once approved, public charter school start ups have to enter the cold cruel world of real estate.

Here’s the good news: The public charter school movement has made great strides over the last ten years.  But bad news persists.

A decade ago, a small band of very courageous citizens took advantage of a short break in the longstanding reign of democratic governors in Maryland.

It was  during the four year term of Republican Governor Bob Ehrlich that the door was opened just enough to provide public funding for alternative educational methods not found in the traditional public school curriculum.

The first group of Marylanders to take advantage of the opportunity spawned out of Frederick County.

Lead by Leslie Mansfield, the group jumped enthusiastically into the arduous process of writing a curriculum for a publicly funded Montessori school.  With the drafting of budgets, as well as all the other supporting documentation and planning needed to develop a strong business plan, this band of local believers followed the rules as laid out by the state legislation to achieve the necessary governmental approvals.

The legislation placed the final application decision in the hands of the local boards of education.

In Frederick County the establishment resisted the charter concept seeing it as a “taking” of funds away from the highly coveted public system.

Many within the system (including the Board of Education) stated that while they may have supported the idea of school choice, there was really no need for such in our county. The concept seemed much more appropriate within jurisdictions where the public systems were failing to meet the educational needs of their communities … like inner city Baltimore.

Undeterred and under the name of Monocacy Valley Montessori, the group developed a strong case to present to the Board of Education.  The significant component that was almost taken for granted was in securing a facility.

In most school jurisdictions around the nation that provide opportunities for public charter education, funding or facility provisions are put in place to allow these start ups to at least incubate somewhere.

Not so in Maryland.  As it turns out the matter of meeting the real estate needs of these organizations has in many ways become the most difficult hurdle facing the public charter school movement in Frederick County.

In the case of Monocacy Valley, after brutal opposition from the establishment, as well as the local teachers union, it was the issue of a facility that became the ultimate challenge.

With a pending charter contract from the Board of Education that provided an initial term of four years and no funding for facilities, this penniless crew faced the cold cruel world of leasing real estate from the private sector.

As a long time supporter of school choice I jumped into the fray to offer the support and expertise of MacRo, Ltd., Real Estate Services.

The challenge we faced was to first educate landlords about the unique concept of public charter education — a major feat in and of itself.

The next job was to convince those willing to listen that a band of enthusiastic citizens with no money of their own could credibly organize a school from scratch.  And despite a four year charter contract, the local board of education could revoke the commitment with good cause.

Oh, and how about asking that the landlord invest in tenant improvements so as to adapt the leasable space to county public school basic standards?

Finally the charter group needed to show the landlord that they could carve out enough money from their educational program budget to pay at best a below market rent — of course without any established credit relationships or ability to offer any personal, public or corporate guarantee.

Simple enough, right?  The current structure literally requires that a charter school find a needle in a haystack … while wearing a straight jacket.

Despite these challenges and even with an “I dare you” from the Board of Education, the Monocacy pioneers aided by MacRo, Ltd. was very fortunate to assist in locating adequate quarters.

Steadily the number of families who sought enrollment in the little school reached over twice that of the school’s student capacity.

For many of the parents it was not that they wanted their children to be educated in a Montessori environment, it was to find an alternative to the structure provided in a traditional public school.

What the Monocacy Valley pioneers proved was that while the state of Maryland and Frederick County Public Schools continued to up the ante on building state-of-the-art facilities, more and more families felt that the basics of education were getting lost in the fancy new buildings.

Fast forward to today.

The public acceptance of public charter education has grown, and many applications for other charters have come forth.

Over the last two years two new public school applications — Carroll Creek Montessori and Frederick Classical — have been accepted with obvious reluctance by the Frederick County Board of Education.

Then it came time to face the challenges of securing real estate for a home in a commercial or institutional building.

Ten years ago there wasn’t even a zoning category for the use of a public charter school.  Over the last year both Frederick City and Frederick County have modestly broadened the scope of various zoning designations to support these ventures.  Recent state legislation has provided landlords the right to obtain property tax exemptions when leasing to charter schools.

Positive momentum, yes … but much more can be done.

Every new charter entity has asked Frederick County Public Schools to consider making some of the excess space in current or former school property available at least on a temporary basis.

The response is always a polite rejection.

What about the soon to be old Lincoln Elementary School or shuffle some space around in the severely under capacity Thomas Johnson Middle School?

Again, a very polite negative response.

In the case of the Frederick Classical Charter School, a landlord stepped forward  offering a sweetheart leasing opportunity without seeking tenant guarantees that rent would have to be paid — quite unheard of, actually. The only request:  the Board of Education provide an extension of the initial charter to eight years in order to make the lease payments affordable.

Shamefully, the members of the Board of Education could not find it within themselves to allow this request to be voted on in a public setting.  This comes only weeks after they gave the school congratulatory public approval for the site as a location, but tightened the straps of the straight jacket by remaining silent on the lease terms.

Knowing the school will be homeless without an acceptable lease, newly Board President Angie Fish just last week refused to place the matter on the public agenda for the January 25th meeting.

Besides how would it look politically for a board to approve a site one day in public and then weeks later publicly reject a nonrecourse lease for the same location without any real justification?

With that stated the real estate options remain minimal for these schools, but with perseverance their needs will be met … and they will!

The best hope for significant progress in Frederick County’s public charter school movement is to look toward the November 2012 elections.  Voters should place their sights on electing three new pro-charter candidates to weed out the old guard anti-charter mentality.

The time is now to put focus on this issue.

Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board. He also writes forTheTentacle.com and Want2Dish.com.

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