Posts Tagged ‘ commercial office space ’

MacRo Brokers Lease of Office Space on Monocacy Boulevard

MacRo, Ltd. is pleased to announce the leasing of 1,500 square feet of office space at 93 Monocacy Boulevard to Horizon Facilities Services, LLC.

Steve Cranford of MacRo represented the tenant in the transaction.  Nancy Green of Mackintosh Commercial represented the landlord.

For more information on how MacRo, Ltd. Real Estate Brokerage Services may be able to assist you in the sale or leasing of your property, contact Steve Cranford at 301-788-4373 or

Frederick Office Market Posts Modest Gains First Quarter 2014

Buyers snapped up Frederick office condos , while tenants leased four times as much flex space as office.

It’s apparent when viewing the chart reporting square footage of commercial real estate transactions by segment in Frederick Commercial Sales Jump 66% during 1st Quarter, that warehouse properties were the darling of Frederick’s first quarter commercial real estate market.  The office segment, on the other hand, continues to face a difficult climb out of the recession, as office use continues to evolve dramatically and inexpensive flex spaces absorb tenants who would have been class A or B office tenants less than a decade ago.

That said, the office sales market in Frederick appears to be making some modest gains, at least in terms of sales price and volume.

The median price per square foot of Frederick office space increased about 10% compared to Q1 2013, while total square feet sold jumped 135%.  There were no purchases of flex properties by traditional office owner/users during the first quarter of this year, and only one sale of a flex condo during the first quarter of 2013 at a price of $106.12/SF.  Medical office condominiums fetch higher prices; a medical office condominium at Conley Farm sold for $237.51/SF last quarter.

Small businesses and medical practices seeking office condos represented most of the activity in office sales last quarter, as low interest rates and loosening credit markets tipped the scales in favor of owning versus leasing.

But speaking of leasing, flex was the clear winner last quarter with office tenants.   Vacant flex properties like those offered by St. John Properties continue to put pressure on the office leasing market, mainly due to the affordability factor:  compare the median per square foot lease rate for flex of $7/NNN versus $11/NNN for office space during the past quarter.  On a square foot volume basis, flex outpaced office by nearly 4 to 1 during the first quarter of 2014.


St. John Properties, which about 18 months ago had 1/4 million square feet of vacant flex space in Frederick, appears to be leasing that inventory at a brisk pace, which is good news for the traditional office segment in Frederick.

Note: Statistics provided for commercial property sales in this report are based on thorough research of every recorded commercial sales transaction listed in SDAT for the first quarter of 2014, and are deemed reliable.  Lease transactions are not recorded with Frederick county government.  Lease rates for this report were researched in CoStar.  Lease rates, if reported at all, are usually estimated.  Median lease rate calculations for the quarter are based upon available estimates and are meant to be used as a baseline trend versus hard data.  

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

MacRo Brokers Lease of Retail Space in Downtown Frederick

MacRo, Ltd. is pleased to announce the leasing of 3,190 square feet of office space at 154 N. Market Street to Smokestack Studios.

Kathy Krach of MacRo represented the tenant in the transaction.  Dee Perry of Noahs’ FMC represented the landlord.

Smokestack Studios is a high-end home furnishings and accessories store; the store owner and operator is a former designer for Restoration Hardware and plans to open for business in June of 2014.

For more information on how MacRo, Ltd. Real Estate Brokerage Services may be able to assist you in the sale or leasing of your commercial or industrial property, contact Kathy Krach at 301-332-7891 or

Retail Strip Centers as Local Wellness Centers

For the near future, health care real estate decisions, like the medical business, focus on economies of scale to compensate for the lower insurance payments while adjusting to the new medical measuring stick of outcome or wellness care.

Like the old real estate mantra, “location, location, location”, the new medical business model will also have a similar mantra: large, local, and logical.

How do medical practitioners and investors locate large affordable structures that can service the community and make financial sense? If you ask the medical investors/redevelopers, the likely answer is the local retail center. The facility is in place, and the community infrastructure is there. The cost savings between repurposing empty or underutilized space versus ground-up development is considerable. This approach also satisfies sustainability opportunities, and saves the patient time and travel costs because of its local presence.

The upside for retail owners can be noteworthy. First, the owners get to convert their current investment into a brand new business model that comes with the opportunity for long-term economic growth. Second is the strong possibility that instead of several small to medium size tenants, the owner could likely see one or two tenants utilize the entire center. Over time, the medical office building has become the health care facility, which is likely to morph into the Local Wellness Center, conveniently located near you.

To learn more about how your real estate investments are being affected by all the upcoming health care changes, contact Steve. 

Contact Steve Cranford at
301-698-9696 ext. 207 or

1 Simple Leasing Tip for Commercial Real Estate Landlords

Sometimes Landlords feel like they are running a concession stand at the local carnival. 

They say timing is everything, but if you are a landlord who has invested in the commercial real estate market for the long haul, you can expect to see everything the market has to offer.

MacRo, Ltd. is in the business of assisting property owners with making wise investment decisions, such establishing lease terms that will maximize the value of their real estate.

Very often I meet with an investor who has been managing and leasing his own property for many years.  As a matter of policy the owner has offered below market rents to fill vacant units quickly.

Since the rent rolls of properties have a significant impact on the property value, many investors often find themselves held hostage by those leases.

It is important for the owner of a commercial real estate investment properties (be in a retail, office, flex space or industrial space) to practice some basic leasing strategies when marketing vacancies.

Here is one to chew on:

Free Rent is often better than Low Rent

At first glance this may appear to make no sense, but all too often, I find that property owners will negotiate a low base rent with a tenant, just to get a vacant unit filled.  That base rent sometimes may (or may not) have an annual rent escalation clause built into the terms of the lease.  In the Frederick County commercial real estate market the typical escalator is about three percent.

The long term impact of lower than market rent can have a negative impact on the future value of the property.  Sometimes under the right circumstances offering as much as several months or more in Free Rent, and using a base market rate rent, can provide the tenant with the necessary incentive to lock into to a long term lease without giving away future increased cash flows.

The left half of Figure 1, shows a simple example of how this logic works.  Consider a situation where the market rate is $15.00 per square foot and a tenant offers $12.00 for a ten year lease.  In the long run the Landlord makes out better if the tenant will agree sign at $15.00/SF with a concession equivalent to a one year rent abatement verses a $12.00 rate without abatements.

From an appraisal perspective, if one were to value such a property based upon an income approach alone (using a capitalization rate of say 8%), after the first year the $15.00 rate shows the value of the real estate to be worth 25% more than that of the $12.00 lease rate.

The right half of Figure 1 gives an example of the value differential for a 5,000 square foot free standing office building using the above lease terms, showing that the factor 25% carries over from lease rate to value.

Now obviously, other factors will go into a full appraisal, such as consideration of comparable sales, property condition and replacement costs … just to name a few.

Do you have a commercial leasing question for our team at MacRo, Ltd?

We are just a phone call away.

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

MacRo Assists Tenant in Leasing Office/Warehouse Space on Bailes Lane

MacRo is pleased to announce the lease of 19,500 SF office/warehouse space at 295 Bailes Lane, Unit C, Frederick.

This unit is a combination of 1,500 SF of office space and 18,000 SF of high-bay warehouse space, which includes 3 docks and 2 drive-ins.

The tenant, Showtime Sound, is expanding from its current facility in Frederick.  Showtime Sound is a full service event production company providing audio, lighting, video and staging for any size event or venue.

Rocky Mackintosh represented the tenant in this transaction.  Tony Checchia of Frederick Land Company represented the landlord.

For more information on how MacRo, Ltd. Real Estate Brokerage Services may be able to assist you in the sale or leasing of your commercial or industrial property, contact Rocky Mackintosh at 301-748-5655 or

MacRo Leases Office Space with Carroll Creek Views

MacRo is pleased to announce the lease of 5,585 square feet of office space at 45 East All Saints Street.

MacRo leased 45 East All Saints on March 1st, 2014.  This historic office building is located in downtown Frederick and has a lot of architectural character including stone walls, exposed beams, large winding staircase, stained glass window, and rooftop deck overlooking Carroll Creek.

The tenant is Mosaic Power, a growing Frederick County start-up that harnesses surplus electricity from water heaters in residences to sell for storage and use by local utility companies.

Rocky Mackintosh and Kathy Krach represented the landlord in this transaction.  David Kaye of Tyler-Donegan represented the tenant.

For more information on how MacRo, Ltd. Real Estate Brokerage Services may be able to assist you in the sale or leasing of your commercial or industrial property, contact Rocky Mackintosh at 301-748-5655 or

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 – pokies online 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.


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.

Superior Class A Office Space for Lease

MacRo is pleased to offer this premium Class A office space for lease. 

Located in the City of Frederick’s HUB zone (Historically Underutilized Business Zone), this modern stone and glass office building offers a two-story grand foyer, high-end finishes, and abundant natural light. Other amenities include elevator access, cafeteria service, and on-site building maintenance / engineering service.  Located minutes from major shopping, restaurants, and Historic Downtown Frederick with quick and easy access to I-270, I-70, and US-15.

Download Brochure

For more information on how MacRo, Ltd. Real Estate Brokerage Services may be able to assist you in the leasing of your commercial or industrial property, contact Steve Cranford at 301-788-4373 or

© Copyright MacRo Ltd, Real Estate Services
Web Design by Wood Street