Archive for the ‘ General ’ Category

What is this thing they call a Comprehensive Land Use Plan?

In the world of real estate, it is not “what you see is what you get!”

Very often in my meetings with prospective land buyers and property owners, I find that many tend to make very broad assumptions about the possible future uses and development potential a tract of vacant land may have.

This also goes for neighboring property owners who discover (often after the fact) that the vast amount of pristine open space they have been enjoying from their kitchen window for the last several years is on the verge of receiving final approval for a substantial mixed use land development project.

I often sit in public hearings (as I did just last night) and hear local residents come out in protest of a site plan that has been proposed. In many cases I feel bad for those speakers as some claim that they were not aware that a nearby property could be developed. 

Privately owned land that has laid vacant for years may have been master planned for development for years. But for many that vacant period can lead some to believe they are entitled to see that property remain the same for as long as they live there.

In all of these cases it comes down that ancient Latin phrase Caveat Emptor.  Very familiar to lawyers, real estate professionals and others engaged in the business of transferring property.  In English it translates to Let the Buyer Beware.  

“Beware of what?” some may ask. 

The “What” is something most residential Realtors are not familiar with, as well as a surprising number of commercial real estate brokers, if they are not engaged in the land use arena of real estate development. 

It is known as the comprehensive land use plan, which is the foundation from which all land use decisions are based upon at a local level in Frederick County, Maryland. 

Every property owner and would-be resident of a community should understand the purpose of the county’s comprehensive plan and the impact it may have on nearby property in their community … and all real estate agents/brokers who sell and/or lease any type of real estate should make it part of a disclosure package given to their customer and clients.

Not unlike a majority of jurisdictions throughout the nation, this document is supposed to be influenced and developed from several parties on a local level:  residents, county planners, nearby communities and municipalities … and of course, local elected officials.  But there is also a significant amount of direction that is driven by the State of Maryland Department of the Environment and its office of Planning which mandates that such a plan be developed in the first place.

It’s meant to be a twenty year road map for state and local governments to use to deal with the inevitable population growth in the region.  This includes the proper mix of housing, commercial development, traffic patterns, public utilities, schools, parks, police protection, etc. over that period.  Additionally in recent decades there has been a strong push to carve out and create corridors of open space, protect prime agricultural land and other areas targeted for land conservation. 

The state requires that this plan be updated periodically at a local level to keep up with changes in demographics, socioeconomic trends, the economy and other matters that may significantly influence the dynamics of a complex plan.

A comprehensive land use plan is what lays a foundation for where certain zoning designations are placed — what I’ll call the allowed “here and now” uses.  So a property can be zoned for an agriculture use, but “master planned” for a future residential mixed use development in the comprehensive plan.

As an area grows and maximizes the current zoned area, the “master plan” will provide good cause for a possible change in zoning to accommodate that growth in surrounding areas.

So it is important to understand that there is a very clear distinction between the long range outlook for a region provided by a comprehensive plan and the allowed “here and now” uses of a zoning designation.

Frederick County’s current comprehensive plan was adopted in the final year of the Jan Gardner administration of the Board of County Commissioners in 2010.

The state mandate at the time was for the local governments within the county plan for an increase of 36,000 new households by 2030.  How they got there was pretty much up to the county.

A significant component of such a gargantuan effort requires a collaborative planning effort among the county, its twelve municipalities and other jurisdictions such as Fort Detrick.

In Frederick County, due to the very polarizing and significant influences of the growth verses no-growth advocates (interestingly it is hard to find anyone who will openly state that they are a hard-line Growther or No-Growther), this process can and has become more of a political football which has often left out many key players.

So for one to think that politics have not driven a zigzagging course in recent years is just naïve.

For example many have forgotten the fact that there was minimal communication, and much less collaboration on the part of the Gardner administration with these other jurisdictions, as they set forth to craft a plan that was completely unrealistic in being able to meet the 36,000 unit target.  It included the down zoning of about 400 properties.

At the time a very restrictive Adequate Public Facilities Ordinance (APFO) was imposed that left many zoned properties locked in a development no-man’s land … not to mention the fact that the nation had just been introduced to one of the worst economic recessions in 70 years.  With all that said many did not take notice of the inadequacy of the 2010 plan.  

Once the change over to the Young administration took place, a different view was taken of the comprehensive plan.  The APFO was reformed to provide a “pay-go” provision for development projects and many of those properties that were down zoned were revisited and restored the zoning that was taken away just a few years earlier.

At the end of the day as the dust is settling on the last Board of County Commissioners in the Frederick County, there appear to be about 21,000 qualifiable future housing units* now in the development pipeline. 

With historical absorption rates (building permits issued per year) of between 1,000 and 2,000 units per year not expecting to change over the next 16 years, it is very realistic to expect that the county will still fall short of the state’s 36,000 housing unit target.

Some believe that the personal leadership styles of both Gardner and Young have burned bridges on both sides of the debate over growth in Frederick County … and now with both throwing their hats in the ring as candidates for this coming November’s race for the first ever County Executive position, we can all be assured that the topic of growth will still be on the table.

So I suggest a bit of Caveat Emptor to all Frederick County voters as this election season heats up!

The authors: Rocky Mackintosh is President of MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He also writes for

* according to statistics supplied by Rodgers Consulting.

MacRo’s Commercial Real Estate Field Guide

What does the legalization of marijuana have to do with a commercial real estate glossary?  Just ask the State of Colorado!

MacRo Commercial Real Estate Glossary

A glossary of terms seemed to make sense as a follow up to Property Virgins–Commercial Real Estate Version.  Familiarity with the lingo makes navigating a search for commercial property far more effective and a lot less hazardous, particularly in commercial leasing.

A good glossary should be a living document.  It’s fascinating to watch the English language morph in response to societal zeitgeist.

Take for example the swelling social pressure to legalize marijuana.   Pot, ganja, weed, toke, blunt–there are numerous slang terms for marijuana.  But I recently read a new one directly related to the cultural shift of legalizing pot:  trimmigrants.

The graphic to the left is a screenshot of a definition of the word on Urban Dictionary.

Quick, before you click on Urban Dictionary–teenagers write many of the definitions, so if you click on the link prepare to be extremely offended and/or mildly amused.

(Teens of course are fluent in slang, but since Al Gore handed them the internet they are practically reinventing the English language. Urban Dictionary has posted 7,500,000 new English slang words in just 15 years, receiving an average 2,000 new submissions every day.  Compare this to the 20-volume edition of the Oxford English Dictionary, which currently lists about 175,000 words.  Urban Dictionary is an etymologist’s dream.  And every parent’s friend, as it makes an EXCELLENT resource for decoding teen text messages.  Have fun dropping those terms around the house and ruining them forever for your teen.)

Fun fact:  since Colorado legalized marijuana use, premium warehouse spaces are leasing at as much as $1,000 per square foot!  For those of you who don’t shop regularly for warehouse space, that’s about $993 per square foot MORE than a warehouse in Frederick typically leases for.

But what does any of this have to do with a commercial real estate glossary?  Bear with me…

Every industry regardless of size has its own set of ever-morphing colloquialisms and acronyms, and commercial real estate is no different.  A new business owner seeking commercial space should know the difference between a NNN lease and a modified gross lease.  A gymnastics school or auto repair shop searching for new space needs a clear-span warehouse.

And a marijuana distribution facility needs…well I don’t know much about the warehouse spaces coveted by hemp harvesters…but if Maryland goes the way of Colorado, no doubt a commercial cannabis cottage industry will spring up overnight.  And with it, a whole new vocabulary weaving into Frederick’s CRE lexicon.

High bay, core factor, CAM, flex space, sandwich lease, sunk costs, TI–all of these terms and more are defined in MacRo’s Commercial Real Field Guide, handily downloadable here.

And rest assured…at MacRo, we won’t let the grass grow under our feet…the MacRo Field Guide will be frequently updated to reflect any tectonic cultural shifts that color the language of Frederick’s commercial real estate world.

‘Cause we got your back, bae.

The author:  Kathy Krach is a commercial sales and leasing agent with MacRo, when she is not otherwise occupied trying to figure out what her teens are saying on multiple social media platforms.  

Time is Money: The Cost of Doing Nothing with Commercial Real Estate

Like us humans, nothing is static … not even a solid building that appeared it would last forever. 

As a property owner approaches retirement, many issues should be considered as to what to do with his improved piece of commercial real estate. If you are at that point in your life, have you got it all figured out?

I am often called upon to assist people in assessing the options that lay ahead as they face the next stage of their lives.

Sometimes such a change is part of a well thought out plan, while others come about due to unforeseen circumstances.

Take for instance the case of a wonderful individual I had the pleasure of working with not too long ago.  He dutifully ran a second generation family business on a substantial piece of commercial real estate he inherited nearly 50 years ago.

In its heyday, the business with a strong following of loyal customers was the envy of many nearby retailers.

As the years passed and times changed, the business could  live on its reputation only so long without finding that the new and creative competition that entered the market eroded his sales.

Maybe it was his sense of loyalty to the old family tradition of the way things had always been done, or maybe it was an unwillingness to try new things.

Whatever it was, my client slowly came to realize that while he was real estate rich, he was becoming cash poor.

At the point I was called upon for some advice, I found a property that looked tired.  The business had suffered such that my new client had deferred the maintenance of his commercial real estate so much that many would be customers chose to drive by instead of stop in for a look.

Of course the appearance of the property now only added to the decline in the business, which had shifted to operating in the red.

Sometimes when one can be so close to a situation that the obvious is not apparent … and that can go on for decades.

In my client’s case, while he grew very attached to the legacy that he wanted to continue for as long as he was physically able, he was now really feeling it in his bank account.

His primary asset was fatigued yet unencumbered real estate.  None of his children were interested in carrying on a loosing enterprise.

Several options were considered:

1.         Refinance the property and reinvest in giving the property a face-lift in hopes it will bring business back to those heyday years.

2.         Sell the assets of the business and lease the property to an energetic entrepreneur.

3.         Sell the real estate and lease the commercial real estate back from the new owner, who will commit to invest in making major improvements … the face-lift that is needed.

4.         Sell the entire package of real estate and business and reinvest the proceeds into another investment that generates passive income … stocks, bonds, mutual funds, investment real estate or any combination thereof.

As we walked down the path of each scenario with my client’s financial adviser and attorney, it was determined that a refinance was too much of a risk at his age.

Option two offered my client the ability to step away from the business while continuing to own the real estate; however the question arose as to how to deal with the tremendous amount of deferred maintenance.  While MacRo could find a tenant who was willing to pay rent that would provide my client with a reasonable income to live on, did my client really want to be a landlord?  Answer: No!

Option three was not appealing, as it meant my elderly client had to find the energy to start fresh in a property he no longer owned … not easy when the property has been in the family for nearly 100 years.

As hard as it was for my client to make the decision, he knew that if he just stayed with the status-quo and made no decision, the suffering business and the depreciating real estate would only eat away at his retirement nest egg.

In this particular case the second generation retailer came to the conclusion that the risks outweighed the possible rewards in choosing any path other than selling the business assets and the commercial real estate that housed it.

Within a period of just eight months an enthusiastic young business minded couple found the opportunity just too hard to pass up.

Today the old commercial building has been restored and given an exciting new look, and with the original business name incorporated into a new retail enterprise, my client could not be more proud that his family name lives on in a thriving new Frederick County, Maryland business … and he is living comfortably on a very low risk investment portfolio and enjoying a life with freedom to travel and enjoy his grandchildren.

Have you thought about your options as you approach a time of change in your life?  Maybe the team at MacRo can help.

Please contact us for a confidential meeting.

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He has been active in the Frederick, Maryland community for over four decades, having served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012 to name a few.  Many of his articles also appear in 


3 Signs Your Commercial Real Estate is in Trouble

It’s always interesting to tour properties of prospective clients…be it a flex warehouse to lease, an office building for sale, a retail center or a tract of agricultural land.

Property owners, like commercial real estate, come in all shapes and sizes … and for the former all sorts of mindsets.

Most property owners consider their real estate holding as assets, which, of course, is the way it should be. And like all assets, they do require attention. Just like an investor in the stock market keeps an eye on his/her holdings, the owner of any kind of real estate should do the same.

While many pay close attention to their property, others may not as much as they should.

While the title of this post is “3 Signs Your Commercial Real Estate is in Trouble,” most problems that arise are not from the asset, but from the owner.

Consider the following:

1. Neglect.

Consider the investor who bought a stock decades ago and threw the certificate in the drawer and later discovers later that it peaked at double its value a few years back and now it has no value at all.

Property owners must pay attention to their real estate investments … some properties require much more than others, but in these days of volatile economic conditions, it’s not a safe bet that the targeted value will be there in the future.

As I have written in earlier blog posts, problems with real estate are usually not the fault of the property, but the one who owns it.

Yes, there are those acts of God that happen — earthquakes, hurricanes, tornadoes and flooding. And yes, in today’s world one should be aware of crime and sudden economic shifts, but in most cases external factors that negatively impact value can be anticipated. Consider the case of highway relocation and changing traffic patterns, or the exiting of a major retailer in the area. These are circumstances where with proper attention, there is plenty of advance notice.

We always recommend that certain maintenance issues be tended to, such as addressing a serious tenant issue, adding a fresh coat of paint, applying for a zoning change, or taking a bush-hog to a field of thorny brambles.

That rundown property usually traces back to the ownership.

2. No “Staying Power.”

Growing up in a real estate family (father and grandfather brokered and invested in DC area in the middle of the last century!), the phrase I used to hear over and over was “If you’re going to make it in real estate, you have to have Staying Power!” Well, not much has changed over the last 75 years in that category.

Commercial real estate can be purchased with the best laid plans, but whatever a real estate investor may think is a worst case scenario … it can always be worse. Of course the opposite is also true … and HOORAY! when that happens, but what if it doesn’t?  After what we have seen in the overall real estate market since 2007 with short sales and foreclosures in the news all the time, you’d think that today’s investors would have learned something … not always the case.

So, have a plan and a back up plan and a back up plan for the back up plan … not only to cover the service the debt, the real estate taxes and insurance, but also the regular maintenance and improvements as needed. If you don’t … well, one way or the other you’ll more than likely pay the price.

3. Reality Bites.

I can usually tell when things are not going well for a client, and my job is to do the best I can to either assist in turning things around or developing an action plan to make the problem go away.

It doesn’t really matter how or why things went bad, it’s all about what is going on now — the market conditions. The challenge is to find the target market for that particular piece of real estate and plan out the best way to position it compared to the competition from other properties that are on the market.

In some cases, the best plan of action is not feasible, because the owner may not be able/willing to comply — either for financial reasons or irreconcilable differences within the ownership to name a couple.

Sometimes the plan is simple … set a price and put it on the market … or if there is not a sense of urgency, my staff and I may recommend that we wait out the market, knowing that certain conditions will be changing for the positive in the specific area that the property is located.

We may also recommend that certain maintenance issues be tended to, as outlined in “Neglect” above.

All this stated, some property owners are either naive to market realities and unable to accept market conditions or have become so fixated on what they want to believe is the market value, that they can’t face the true picture. My experience has shown that anxiety over a difficult personal or business financial dilemma or a sentimental attachment to the property most typically stand in the way of accepting the real world situation.

A “perfect storm” of poor commercial property stewardship–one that continues to make the headlines in downtown Frederick–is the now infamous Asiana building.  In this case, it seems that the owners really just don’t care what anyone thinks. They apparently have the just enough staying power to cover the minimum requirements of ownership by paying the property taxes, yet have neglected the property and probably have no concept of reality.

That bites!

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He served as a member of the Frederick County Charter Board from 2010 to 2012.  Many of his articles also appear in 


Property Virgins – Commercial Real Estate Edition

Got a brilliant start-up idea? Avoid 5 common mistakes new businesses make when leasing commercial space.

Macro Commercial Real Estate Virgins

One of the best things about practicing commercial real estate in Frederick County is the entrepreneurial culture.

It’s a rare week that MacRo doesn’t get a call from prospective clients launching new businesses or medical practices, or moving start-ups from dining rooms and garages.

A structure of bricks and mortar is a significant investment for any business, but particularly for one in its infancy.  Costly mistakes in real estate acquisition can often be the difference between start-ups that make it and those that don’t.

Following are just a handful of the missteps that commercial property virgins commonly make:

1)  No business plan.  

It’s not unusual for would-be entrepreneurs to show up at the MacRo offices with a great idea for a new business having no clue as to how much it will cost to manifest what the cash flows and revenues will be.  That’s okay–we actually prefer to begin advising on real estate acquisitions early in the process.

What we do find cringe-worthy are clients who decide to push forward and lease space before they develop that fleshed-out business plan.  Here’s why:

  • It puts the client in a terribly weak negotiating position.  This often means paying higher-than-market lease rates and tying up personal assets to guarantee a lease.
  • The client doesn’t have a clear sense of how much real estate the business can afford — potentially putting the business in jeopardy if cash flows ultimately can’t sustain lease payments.

2) Hire a commercial real estate virgin to represent them.

Unfortunately, a real estate license is a real estate license — agents can legally broker commercial or residential deals with it.  That doesn’t mean they SHOULD, however.  The world of commercial real estate operates very differently than residential real estate, which is a blog post in and of itself.

Here are just a few of those differences:

  • Residential real estate has in place an enormous amount of protection for buyers and tenants, which largely do NOT exist in the commercial world.
  • Price is only ONE of many negotiating factors in a commercial deal.  In leasing for example, every commercial market, including Frederick, has a selection of concessions routinely used to sweeten deals and lure tenants — these can be worth tens of thousands of dollars or more — and concessions differ for each segment of the commercial market.  (Get yourself a good commercial broker if you want to know the goodies you may be entitled to when you lease commercial space!)
  • There are a host of complexities in the commercial real estate world including zoning, building codes and change of use permits that need to be factored into the decision making process when a business is leasing property.  Failure to do so can result in unforeseen and sometimes catastrophic expenses down the road.
  • Seasoned commercial brokers KNOW THE COMMERCIAL MARKET.  The last thing a new business needs is a 10-year lease in a turning market.

Don’t get us wrong–Frederick has many real estate professionals who successfully straddle the residential and commercial real estate worlds, and they are competent professionals in both.  Just be sure you don’t hire one who is a commercial real estate virgin.

3) Underestimate the costs of rehabbing commercial space. 

In the Frederick market, the small-business tenant can often eat the lion’s share of tenant improvement costs to make space usable for its intended purpose –whether retail, office, restaurant or medical.  It’s a big investment, and as they say, you can’t take it with you.  When the lease expires on the dress shop, that gorgeous wide-plank wood floor now belongs to the landlord.

As a means of getting an accurate picture of the required improvements, take the time to get solid estimates from reputable contractors for costs of planned improvements BEFORE negotiating lease rates and concessions.

4)  Forget about parking.

This sounds like a no-brainer, but it’s surprisingly easy to get so caught up in the location and the interior of a property that prospective tenants forget to check whether available parking is adequate to their business needs.  Lack of parking can be a business killer!  Check lots and garages at various times of day to monitor the ebb and flow of parking usage BEFORE a lease is signed.

5) Fail to have an attorney review the lease. 

As mentioned earlier, there is little in the way of protection for tenants built into commercial leases, which are largely written in such a way as to protect the property owners.  A competent real estate attorney who knows Maryland real estate laws can ensure the tenant’s rights and best interests are represented as much as possible within the framework of the negotiated deal.

Planning to lease space for your new or expanding business?  MacRo can help you avoid the landmines that commercial real estate virgins often step into.

The author:  Kathy Krach is a commercial sales and leasing agent with MacRo.  Finding homes for new and expanding businesses is her favorite.


The 3 Key Qualifying Questions in Selecting a Commercial Real Estate Listing Broker

What should a property owner know before a listing commitment is executed with a land and commercial broker?

Let’s say you own a piece of land with some potential, or have a commercial building that you want to sell or lease.

How does one go about finding the right commercial real estate broker to make the “earth move” for you … so to speak?

All too often a property owner has a friend, a friend of a friend or met someone at a cocktail party.  Before you know it this broker has placed a sign up in front of the property and the waiting game begins.

Now, everything is under control and you are on your way to finding the perfect buyer and/or tenant, right?

For those you have had some experience in the legal side of business, the phrase “caveat emptor” is probably not an unfamiliar one.  Translated from Latin as “Let the Buyer Beware,” it is not that often thought of when a property owner (as a seller or a landlord) is seeking commercial real estate services.

In fact real estate sellers and landlords are actually buyers when it comes to contracting for the services of a land and commercial real estate broker.

Business owners and investors who hold a small to medium size real estate portfolio may have had experience in working with and selecting residential Realtors, but when selecting a land and commercial brokers, the qualifying process can take a bit more work.

Consider the following three key questions to ask the next time you are faced with such a choice:

1.         What experience does the broker have with moving real estate like yours?

Ask for very specific examples of similar property transactions – the successes and the failures.  Find out the specific technicalities of zoning, changes in use, and other governmental regulations that may or may not have impeded a smooth closing for other such transactions.  What lessons from those experiences will benefit the marketing of your property?

Does the broker have market and business knowledge of the type of property you own?  For example if the property is a multi-tenanted property, does the broker know how to read financials (familiarity of market rents, vacancy rates, realistic expense ratios, etc.) so he/she can speak the same language as the likely buyers for the property?

Will the sale or leasing of the property trigger a “change in use” in such that the local government will require a site plan modification or change in use permit, among many other avenues of red tape?

2.         What is the broker’s communication style with his/her clients?

This one cuts both ways and is probably one of the most important.

The hardest question that a property owner has to ask him or herself is can he/she build a relationship with the commercial real estate broker to where both can freely and confidentially share the truth about the real estate market conditions, the value of the real estate and real reason why the property is being placed on the market.

Does the broker have a consultative style, where he/she can appreciate the clients needs … sometimes a good broker can assist the client in finding methods that do not require a sale, when the client thought it was the only way out of a difficult financial situation.

How often will the broker and client communicate each week, month, etc., throughout the term of the commitment?  What are the expectations?

Does the broker have a strong support staff that will play a role in keeping the communications channels open?

The land and commercial real estate broker that you select must be someone you can trust (and visa versa).  As in the case of lawyer/client and financial adviser/client relationships, real estate transactions often involve a significant portion of one’s assets.

Are you, as a client of the broker, capable of accepting marketing advice that may not align with your hopes and dreams with regard to the anticipated property value, owner improvement requirements, etc?

 3.        What is the broker’s strategy find the right buyer/tenant within the shortest period of time?

Individual land and commercial real estate properties are very often considered very unique in and of themselves in type and category.

Clearly there are different pools of prospects to fish in when looking for a buyer of a 15 acre tract of general industrial land verses finding a tenant for a 2,000 square foot boutique shop in downtown Frederick.

Some commercial brokers specialize in a very specific class of real estate: mineral mining, big box retail, high rise apartments, etc. Others, as in the case of MacRo, Ltd., provide broader and more varied services to a specific geographic market.

In the case of the latter the advantage should be that the broker is an established member of the community at large and/or knows the ins and outs of all the local government agencies, as well as the mood of the political climate.

Once the path of deciding upon a specific class or at large broker is made, then it is time to consider the core principles of the firm’s approach to marketing as well as what specific market strategies can be merged into that program for the yielding the best results of the subject property.


There is any number of other qualifying questions that a property owner should ask, but if you’re in the market for land and commercial brokerage listing services, and you dig deep enough in to the depths of these core questions, you will select a very good match!

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He served as a member of the Frederick County Charter Board from 2010 to 2012.  Many of his articles also appear in 

Mirror Mirror on the Wall, Does the MacRo Real Estate Survey Tell All?

A month ago MacRo asked you what your outlook was for the coming year. Will 2014 be “the year” or just another notch in the belt of a slow recovery for the real estate market?

Further, we took the same national questions to the International Builders Show in February to get a pulse on the outlook of the national market. We asked, you answered.

National Economic Outlook: Partly Sunny

When asked about national expectations for the economy a year from now 55% of our local market responded with a cautiously optimistic “moderately improved” with 50% of the national respondents at the International Builders Show (IBS) agreeing, but this is where the similarities end.

Real Estate Outlook: Blue Skies, Scattered Clouds

Overall the country appears to have put on a much rosier set of glasses than the Frederick County when it comes to the real estate market outlook. 25% of IBS participants anticipate a significantly better performance year in the real estate market and 66.7% feel that the market is significantly better in terms of real estate investment opportunity.

How would you rate the real estate marketplace for investment opportunities now as compared to a year ago?

Locally, a different story emerges with 44 and 37 percent of respondents only expecting somewhat better or about the same performance in the real estate market. Locally the investment outlook is lukewarm as well with 42% of respondents expecting a somewhat better year in 2014 but 35% expect the same opportunity in the market for real estate investment.

So are Frederick County area businesses more cautiously optimistic, or are we being just a bunch of debbie downers? 

Traditionally Frederick County and the surrounding commercial real estate areas have benefited from a “government bubble” – that is to say that our government influenced economy insulates us from extreme highs and lows in the market. Real and imagined government shutdowns and sequesters aside, the Washington DC market and surrounding suburbs have enjoyed over a decade of expanding federal largess. While Stephen Fuller, director of the Center for Regional Analysis at George Mason University believes government is our regions spending bubble, this distorted economy did not slam as hard during the Great Recession as real estate markets in the rest of the country did.

The Washington metro market simply doesn’t experience the peaks and valleys of the real estate roller coaster like the rest of the country. This could explain why our outlook is slightly cloudily with a chance growth. Our neighboring primary and secondary markets are more excited with their outlook. Phrases often heard on the IBS floor from representatives of Florida, Texas and Georgia real estate professionals would make us take pause…”I can’t keep up with demand”, “2013 was the best year I’ve had in a long time and this year is going to be even better”, “we expect to expand our services to keep up”. Is this the second coming?

Keeping in mind how depressed markets have been in Florida, Texas and Georgia in the heart of the downturn, it is worth nothing that on average these markets are still under performing. According to the Demand Institute, a nonprofit think tank operated by The Conference Board and Nielsen, the median price of single family homes will be close to the peak reach in 2006 by maybe…2018.

The Residential Market

To cover all bases the MacRo and IBS surveys included the residential housing market outlook as well. In any market on average the rule of thumb is that 14% are active. Locally, it looks like we may have a stronger interest in residential real estate with a total of 9% looking to purchase or sell a residence and 11% looking to invest.

MacRo Commercial Real Estate, Residential Real Estate Outlook 2014

What real estate plans do you have for your family in 2014?

In residential real estate secondary markets also have reason to celebrate. The Demand Institute study shows among the 50 largest metropolitan areas where housing prices are expected to appreciate between 2012 and 2018, the top five will see rises on average of 32 percent. The bottom five will only average gains of 11 percent. Hot markets include secondary market mainstays of Memphis, Tampa, Jacksonville, Milwaukee and St. Louis. Those with the lowest projected price appreciation are Washington DC, Oklahoma City, Denver, Minneapolis and Phoenix.

Take heart, there is a little hope. While sales overall have fallen in the local housing market, the Commerce Department reported yesterday that sales of new homes rebounded in January to the fastest rate in more than five years rising 9.6 percent to a seasonally adjusted annual rate of 468,000. The last time we saw this pace was in July of 2008.

In conclusion, our mirror seems to be mostly inline with current market performance. Only time will tell if we really saw ourselves or fell into the looking glass.


Interested in how the MacRo and IBS market survey trends affect the commercial real estate market in the Frederick, Maryland area? Contact our good friends at MacRo!

About the Author: Christina May, Real Estate Marketing Consultant and Managing Partner at Illumine8 Marketing and PR firm based in Frederick, Maryland. Recent GALA award winner for best Sales Center Design and Chair of the Brunswick Economic Development Commission. 

5 Tips to Selling Land and Commercial Real Estate

They say that breaking up is hard to do, but for many, knowing that it is time to part with one’s land or commercial real estate … well, it can be really hard!

Having worn many hats in my real estate career (broker, buyer, tenant, seller, landlord and developer) I thought I’d share some of the insight I’ve gained from all those hats I have collected over the years.

Whether your property is a tract of land that you have owned for years, an income producing building or a property that houses your business, at the end of the day you can’t take it with you.  It’s just an asset that is part of your portfolio and for whatever reason, you have decided to sell it and move on.

Many of the clients with whom I have worked with over the years often need one of more (sometimes all) of the following tips of advice as they prepare to place their property on the market for sale in hopes of achieving a successful sale.  Please excuse me as I use a few of  very trite phrases!

1.         Fall out of Love:

Many property owners have had a romance with their real estate.  Maybe it was love at first sight and had to have it; or bought it and grew to love it as their investment and/or sweat equity increased.  That pride of ownership and accomplishment can blur one’s vision to the realities of the market place.

Just as love is blind and young lovers find no fault in each other, some property owners are not willing to face the fact that others may not appreciate how much time you have spent with that tenant that you have nurtured over the years, or that old furnace that you have refused to replace because it works perfectly now.

It’s time to leave your infatuation behind,  stare reality in the face and see the property through the eyes of a buyer.

2.         Seek Unbiased Advice:

Part of the process of falling out of love is also allowing an unbiased third party to provide a second opinion as to what a buyer may see.   This may come from an experienced appraiser or a commercial real estate broker, who knows the market place well … Not your next door neighbor or son-in-law … I’m talking unbiased.

That opinion can often yield pleasant surprises and some times not … but the deal is to get real with the market value.

3.         Find a Master Marketer:

To many sellers often try to be Penny Wise and Pound Foolish with the approach they take to selling their real estate, by trying to do it themselves or engaging the broker offering the lowest fees.

The goal that I often recommend to my clients is to establish a goal – no matter what the market conditions are – to strive for multiple offers to be delivered at the same time.

How does one do that?

Find a broker who knows the market inside and out (comparable sales, current inventory and a keen knowledge of buyer types), and capable of providing candid marketing tips to prepare the property for sale.  This broker must have a track record of using a multimedia approach to reaching qualified prospects.  In addition the ideal broker must be able to represent the seller’s interest at all times and know how to bring a deal to the table … as they say.

4.         Don’t Try to Fulfill a Fantasy:

It today’s world of properties that are still over financed from the fantasy years of 2005, many owners still try to hold on the idea that they can yield big bucks from a sale based upon the offers they received a decade or so ago.

Yes, it may be true that the debt and or the debt service is draining an owner’s resources, and something must be done, despite that fact that a sale may not yield the funds one needs to sail off into retirement with a wad of cash.

At the end of the day there investments that have turned out good and those that went bad through no fault of the investor.

Heck! Just blame it on the economy or your most unfavorite politician … if that makes you feel better.  At the end of the day unrealistic dreams and fantasy don’t pay the bills, unless you are George Lucas.  It’s about reality.

5.         Surrender to the Process:

This is often the hardest part, as many sellers still try to hold on to their emotional attachments or the plans they have made for the fantastic net proceeds they dream of coming from a sale.  Micromanagement can be deadly.

While it is vital for the owner to come to an understanding of expectations with the professionals they have engaged and monitor that process, it is still about the realities of the market and find the right team to carry out your plans.


If you find yourself having problems with any of these 5 keys, take a moment to give us a call us at MacRo, Ltd. … maybe we can help.


The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He served as a member of the Frederick County Charter Board from 2010 to 2012.  Many of his articles also appear in 

Frederick’s Top 5 Commercial Real Estate Deals 4th Quarter 2013

The sale and lease-back deal of Frederick’s State Farm operations building tops the list of 4th Quarter 2013 CRE sales.

MacRo’s 2013 year-end recap wouldn’t be complete without a “top five” list of the largest sales of the 4th quarter.  There were 34 sales transactions of commercial real estate assets in Frederick last quarter, totaling nearly $70 million.

Following are the top five commercial real estate sales transactions for Frederick during the fourth quarter of 2013, ranked by sales price:The list below does not include the sale of several buildings at Riverview Plaza in December, as those sales haven’t been recorded with the county yet so we couldn’t get final sales price data.  Those buildings were part of a massive 285-property, $1.1 billion portfolio sale of shopping centers and multifamily properties across the mid-Atlantic, and public financial documents did not break out price-per-property on the deal.  We’ll report on that deal in our first quarter of 2014 update.

1.  $30,788,333   State Farm Frederick Headquarters – 1 State Farm Drive

In November, State Farm Mutual Auto Insurance, Inc. sold 23 Class A office buildings throughout the U.S. to Lone Star Funds, a global investor of distressed assets, in a $750 million portfolio sale-and-leaseback deal.  State Farm has signed long-term 15+ year leases for the buildings; Lone Star plans to flip about half of the properties.   

2.  $3,520,000   Worman’s Mill Industrial Park – 15 Worman’s Mill Court

First Potomac Realty Trust sold this multi-story Class A flex building to Ritchie Road Investors, LLC in November.  The building is over 40,000 SF and sold for $87.89/SF.  It was nearly 90% leased at the time of the sale.

3.   $2,974,470   Exxon Service Station – 1561 Opossumtown Pike

H. Ruskin and M. Lustbader of Illinois purchased the Opossumtown Pike Exxon station along with 7 others throughout the mid-Atlantic region in October from Mesirow Financial Investment Management; the portfolio deal totaled $28,000,000.  The building of 2,856 SF sold for $1,041/SF and sits on nearly an acre.

4.   $2,500,000   Avanti Marble & Granite – 3909 Cornell Place

Decorative Films, Inc.  acquired this Class A industrial building in Stanford Business Park from Avanti Marble & Granite in December in a purchase and lease-back deal.  Avanti will lease the building back for two years, after which time Decorative Films will expand operations into the space (Decorative Films is an owner/occupier of two other buildings in Stanford Business Park).  The building is 26,000 SF on over six acres, and sold for $81.70/SF.

5.  $2,425,000   Jeanne Bussard Center  – 555 S Market Street

ARC Properties purchased the Jeanne Bussard Center in November.  The Class C industrial building is 25,585 square feet in size and sits on 3.79 acres.  The sale netted $94.78/SF.

If you are curious about MacRo’s 2014 commercial real estate outlook, don’t miss Rocky’s post from last month: 2014 Economic Forecast: Bankers Cautiously Optimistic.

The author:  Kathy Krach is a commercial sales and leasing agent with MacRo.

Top Ten Trends Live from the 2014 International Building Show

Wondering what is coming to the real estate industry in 2014? Skip the snow and join me in Vegas for the annual International Builder’s Show – the building industry’s biggest event of the year.

MacRo Report Top Ten Trends from IBS 2014

From Commercial to Residential, tools to products, services and software – if you can dream it, you’ll find it. Over 75,000 people are estimated to be walking the halls of the Las Vegas Convention Center this week. Can’t make the flight (I hear it may have something to do with the weather back home)? Here are the top ten trends of IBS 2014:

Active Lifestyle

As the boomers age, we have seen more and more age-related products come to the market. It is estimated that baby boomers will retire at the pace of 10,000-per-day for the next nineteen years. While this style of real estate is 30% real estate and 70% services, builders are looking for ways to incorporate a wide array of options for active adults who wish to “age in place”.

Here some highlights from the show floor:

  1. Forget aftermarket lifts, manufactures are demonstrating elevators and lifts for customers wishing to age-in-place. These products are brilliantly designed, compact and can be considered for both new home builds and renovations.
  2. Need medical devices such as rails, slings, and bathing products but don’t wish them to be a focal point in your home? New product designs cleverly integrate into a home’s architectural features and decor so you don’t even notice they are there.
  3. From the development perspective, planning the right product and amenities in an active lifestyle community remains a challenge. From duplexes, single-family to staked flats, all agree that the key is geographic dependent and thoroughly researching the local market.

Custom Building & Design

The art of the home goes beyond great architectural design. The interior of the home is reflects the personality of the owners and their lifestyle. IBS surely didn’t disappoint with color trends and new products. Here are some highlights from the show floor:

  1. Color of the Year
    The Pantone Color of the Year may be Radiant Orchid (it’s a pink, purple hue), but Benjamin Moore selected Breath of Fresh Air, a light blue tone, as its Color of the Year 2014 because it sensed a shift to lighter colors, and away from gray, which has been an extremely popular color for home interiors for the past several years. Breath of Fresh Air is just one of the many pastels the company is touting in its Color Trends 2014 campaign. It has dubbed these pastels new neutrals.
  2. It’s Back to Black
    Gray and “greige” will remain popular, but black is the new color favorite for 2014. In a Houzz poll, 74 percent of homeowners admitted to being a fan of black rooms, from bathrooms and kitchens (with crisp white fixtures) to interior doors and exterior siding. We’re seeing this bleed into other products such as siding and trim for the outside of their house as a way to modernize an older home.
  3. Smaller Smarter Home
    Previously, “smart home” options were limited to a single system that ran the whole house, but today homeowners use their smartphones to control a variety of independent systems throughout the home. From lighting to locks to appliances, smaller systems are easier to upgrade and replace.
  4. Low maintenance lawns
    Maryland would love this trend – native ground cover plants and more creatively landscaped green spaces, even including synthetic lawns, are becoming popular options as people opt out of traditional, water-dependent expanses of grass.
  5. Woodgrain
    Not your mom’s woodgrain panels – wood is extremely popular on the show floor as people skip the paint and opt for natural beauty. In fact, butcher block was the third most popular choice for counters, and hardwood was most popular flooring in the Houzz Kitchen Remodeling Survey. Expect more live-edge wood (i.e., carpentry with natural edges) in 2014 for both furniture and countertops.


Green, LEED certified, net-zero – you have heard all the terms. These products seem to only get better – both in quality and cost. The on-going buzz around this topic is not only how to keep up with the ever changing standards but also how to make them affordable for consumers in both residential and commercial settings. Here are the highlights from the show floor:

  1. I can’t believe its not ________
    Plastic, synthetic, engineered. Whatever you call it, engineered products continue to get better and better. From siding and stone to windows, trim, doors, gutters and accessories these products will have you looking twice. Not only are they beautiful to look at, they are energy efficient too.
  2. Solar
    Love solar, but don’t love the look of the panels? We got a peak at some of the newest environmental building integrated roof technologies including solar electric, solar thermal and rainwater harvesting systems. New systems mimic the looks of a shingled or standing seam metal roof.  These great looking installations look like conventional roofs and the LEED credits are the icing on the cake.


Multi-family has been hot and it looks like this living style is here for the long-haul. Old challenges such as moisture and noise control were discussed, but the discussion about escalating construction costs and financing took center stage this year. HUD Mortgage insurance programs including new underwriting practices and upcoming plans for HUD office restructuring were discussed.

Sales & Marketing

These concepts may not be new, but they certainly struck-up lively conversation. Topics centered on lead-conversion tactics in a digital age, blogging, twitter, design centers and copyright infringement.

Interested in how these 2014 IBS trends affect the commercial real estate market in the Frederick, Maryland area? Contact our good friends at MacRo!

About the Author: Christina May, Real Estate Marketing Consultant and Managing Partner at Illumine8 Marketing and PR firm based in Frederick, Maryland. Recent GALA award winner for best Sales Center Design and Chair of the Brunswick Economic Development Commission. 

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