Business was brisk in sales of historic downtown Frederick office and mixed residential/retail buildings.

Puxatawny Phil was off his game this year.  Despite his promise of an early spring for 2013, it arrived slowly here in Frederick, in fits and starts—much like the economic recovery.

Speaking of the economy recovery…after the first quarter of the dreaded sequestration, we crunched some numbers at MacRo to determine how Frederick’s commercial real estate market weathered the biggest cuts in defense spending in 60 years.

There is good news and bad news…whether the weather is partly sunny or partly cloudy we leave our loyal readers to decide.

The good news is that the number of commercial real estate sales transactions in Frederick during the first quarter of 2013 increased over the same period in 2012 by over 45%.   Buyers and sellers are finally beginning to see eye to eye.

The bad news?  There weren’t any deals over $1 million this past quarter, and the total dollar volume of sales transactions for Q1 2013 dropped to $18.6 million from $31.4 million during Q1 2012.

Overall, the first quarter of 2013 was heavily weighted with sales of historic downtown office and mixed residential/retail buildings—a total of 50% of all Frederick commercial real estate transactions were in this category.

We weren’t surprised, given that we’ve had numerous showings of MacRo properties this quarter to small- and medium-sized business owners looking to expand growing businesses into larger spaces.

Comparing Q1 2013 to Q1 2012, office leasing in Frederick County ticked down slightly on a total square foot basis (a little disappointing), but so did vacancies (which is good news).

Nationwide, office space use and design is experiencing a tectonic shift.  With office demand growing at only half the rate of office-using jobs, and major employers fleeing Maryland for tax-sheltered Virginia, there is some concern within Frederick’s commercial real estate community about the realistic leasing potential of large vacant Class A spaces in this market.

The owners of the former Citibank building at 5280 Corporate Drive have refurbished the lobby, divided the building into smaller spaces for leasing to multiple tenants, and rebranded as Westview Corporate Center.  Will the vacant building in Frederick’s Bechtel campus receive a similar makeover?

The most notable sale of property in Frederick County during the first quarter was the historic Landon House in Urbana.  The property, which included the 6,000 SF mansion and 5.7 acres of land, sold for $850,000 in January.  The mansion had been converted to office space, but the buyers of the property are a group of doctors who plan to convert it into a medical building.

Given the office space conversions taking place in Frederick, we found it interesting that the largest commercial office real estate transaction in the U.S. during the past quarter will also result in a major office makeover.  The Sony Building on Madison Avenue in Manhattan sold for $1.1 billion ($1,290/SF).  The purchaser plans to convert the entire office building into apartments.

The authors: Rocky Mackintosh is President of MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He also writes for TheTentacle.com. Kathy Krach is a commercial sales and leasing agent with MacRo.

MacRo, Ltd. is pleased to announce the leasing of 8,767 square feet of office and warehouse space on Tilco Drive near Reichs Ford Road in the City of Frederick to City Electric Supply and the American Society for Colposcopy and Cervical Pathology (ASCCP).

Rocky Mackintosh and Kathy Krach of MacRo, Ltd. represented the landlord RW Warner Inc.  City Electric Supply was represented by T.J. Spencer of Swope Lees Commercial Real Estate.

City Electric Supply is an electrical wholesale business with more than 1,200 locations around the world.  This location is their first branch in Frederick County and their 5th location in Maryland.  ASCCP is a medical research and training nonprofit organization that is now headquartered at the Tilco Drive location.

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 rocky@macroltd.com.

MacRo, Ltd. is pleased to announce the sale of a Frederick commercial office uilding known locally as the Key 103 radio station to long-time tenant Manning Broadcasting for $416,000.00.  The building conveyed with just over an acre of land that is zoned light industrial (LI).  Manning intends to continue to operate local Frederick radio stations Key 103 and 106.9 The Eagle on the property.  The property was never listed for sale.

Property Address:  5742 Industry Lane, Frederick, MD 21704

Lot Size:  46,609 Square Feet

Building Area:  3,199 Square Feet

Legal Description: Map 77, Grid 15, Parcel 203

Listing Price: N/A

Sale Price:  $416,000

Zoning:  LI – Light Industrial

Closing Date:  May 1, 2013

Rocky Mackintosh represented the seller in this transaction.  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 rocky@macroltd.com

The Panama Canal could save Hagerstown, but will it boost Frederick’s industrial real estate values?

Michael Pugh of Pugh Real Estate Group is one of Frederick County’s leading commercial real estate appraisers, and he recently shared his perspective of Frederick’s CRE market with a group of commercial agents and brokers at the Frederick County Association of Realtors (FCAR).

Appraisers are on the front lines of the commercial real estate market, so we were very interested to hear his impressions of recent activity in Frederick’s market.  Following is an overview of Michael’s presentation to FCAR’s commercial Realtors on March 27, 2013.

Overview of Frederick’s Commercial Real Estate Sectors

Housing:  Local homebuilding activity has a significant impact on Frederick’s commercial real estate, so it makes sense to begin there.  Housing starts this past September were up 25% from August.  Big national homebuilders have not been this optimistic since 2004.  Lot sales to builders for homes in the $350,000 – $400,000 range have increased from last year as a result.

Unsold homes and foreclosures may throttle the housing recovery, however.  Home prices have fallen 24% from their peak during the second quarter of 2007, so there are still many homeowners underwater on their mortgages.

Flex:  There is good reason that the next Matan project planned for Frederick is apartments, not flex.  Frederick County still has about 800,000 square feet of flex space available for sale.  A significant amount of that inventory is sitting on the market today because the owners either don’t seem to understand that there has been a recession, or believe that somehow their property values alone were unaffected by it.

Office condominiums:  During the recession, office condos held their value longer than any other commercial real estate in Frederick—the rate of sales slowed considerably, but the values held, mainly due to medical owner/users.  Prices for office condos in Frederick have remained relatively flat as a result.  There is currently only about 60,000 square feet of office condominium space on the market.

Office buildings:  Frederick has seen a decline in the value of office buildings, and marketing times have lengthened as well.  (MacRo Report has covered the reasons behind that decline extensively.  Office use in general is in transition, and large employers like Bechtel are leaving for more favorable business climates like northern Virginia.)

Retail:  Retail property values for lower quality assets (i.e. strip malls) in Frederick and Washington counties both took a huge hit during the recession.  There is a big price differential between lease rates in Frederick’s high quality retail assets—like Market Square and Clemson Corner—and lower quality assets—like older, dated retail properties on the Golden Mile.  The difference is as much as $40/square foot in the most extreme cases.

Retail development projects at Clemson Corner and Market Square on Route 26 have been a resounding success.  Look to Brunswick Crossing for the next big retail venture:  the town has approval for 300,000 square feet of commercial development, and an economic development team that is doing everything right to change the culture there and revolutionize the town.

Proposed retail development at the hotly-disputed Monrovia Town Center could also do very well, as the population in Urbana has exploded but there is relatively limited retail there.

Industrial:  A vacant industrial lot is the poorest-performing commercial real estate asset in Frederick County right now.  Manufacturing jobs, the life-blood of industrial real estate values, declined in Frederick during the recession and they don’t appear to be making a comeback any time soon.  Maryland is not high on the list of places for manufacturing businesses to locate.

However, the Panama Canal may succeed where Annapolis has failed—and save Hagerstown in the bargain.

The Panama Canal is undergoing a large expansion and will soon be able to accommodate super tankers for the first time.  There are only three deep water ports on the entire east coast that can also accommodate massive transport ships, and Baltimore is one of them.  That means Baltimore, and by extension, Hagerstown, is very well positioned to experience significant growth as a distribution hub.  Sites at the intersection of Interstates 70 and 81 would make great locations for warehouses.

Frederick County sits right on the path leading there.

Frederick’s Commercial Real Estate Market: 2013 1^st Quarter Impressions

Leasing activity for quality commercial assets picked up, and sales activity during the first quarter of 2013 increased over the 1^st Q of 2012.  For the first time in years, commercial appraisers in Frederick have comps that are less than one year old.

Cap rates are moving down—the better the asset quality, and the better the tenant, the steeper the slope.  Banks have been holding caps rates up a bit.  Two years ago, no commercial bank would finance above a 70-75% loan-to-value ratio; today, commercial banks are getting comfortable again with 80% LTVs.  As a result, cap rates are coming down to 4-4.5% for good quality assets in Frederick.

Commercial banks are chasing loans for medical offices and apartment buildings.  Most commercial bankers will tell you that there are not a whole lot of people (or businesses) in Frederick County with the capacity to qualify for a commercial loan right now.  If you want a good client, your best bet is to find a doctor.

Michael P. Pugh is a Certified General Real Estate Appraiser with the Pugh Real Estate Group, LLC., in Frederick, Maryland.  He specializes in the appraisal of improved and unimproved commercial and industrial real estate.  He is an Associate Member of the Appraisal Institute and has nearly completed work on his MAI certification. 

The authors: Rocky Mackintosh is President of MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He also writes for TheTentacle.com.  Kathy Krach is a commercial sales and leasing agent with MacRo.

MacRo shares a campaign platform wish list from a commercial real estate perspective.

In “Mayor, Mayor, on the Wall, Who’s the Strongest of Them All?” I gave an overview of the candidates for the 2013 City of Frederick mayoral election.  This is the second part of that post.

In follow up, here are the goals I believe the next mayor of Frederick should pursue:

1.  Bring the City of Frederick’s fiscal house to order.

Post-employment benefit and pension obligations: This line item is a tremendous burden on the budgets of municipalities across the country. While the current administration has made adjustments during the past year—by  increasing participant contributions, changing the calculations for retirement age and salary basis, increasing the age of early retirement, and dropping a several hundred thousand into the city’s OPEB and pension funds—it seems to me that there is a lot more work to do to tame this albatross.  This is one Can that can not be kicked any more.

Tax equity between the city and the county: A reasonable effort was made between these two jurisdictions over the issue of the double taxation of city residents and businesses for services provided by the county for the benefit of the city.  While a tax-differential calculation is a good concept, is a $0.04 reduction in property taxes enough to resolve this issue?

Merge city and county services where appropriate: For several years I wondered if there was a cost efficiency to local government if the city were to annex all of Frederick County in under its umbrella, a strategy adopted by many cities throughout the country—Jacksonville, Florida and Indianapolis, Indiana to name two.  But after further review, I realized that creating bigger bureaucracy does not necessarily make for a more efficient government.  That said, the idea of merging the departments of the city and county water and sewer services, among others, could make sense.

2.  Serious pursuit of economic development.

We all know about the plans to complete the next phase of the Carroll Creek Linear Park, and hats off to the current administration for finding the funding to do so, but that alone is a mere fresh coat of paint to what else could be done.

Adjust expectations on hotel/conference center: The city has placed a great focus and expense on laying out guideline to attract a hotel/conference center for downtown.  And while studies that have been produced show how a 200 plus room hotel and 15,000 square foot conference center  will bring tremendous economic benefit to downtown, from the commercial real estate developer perspective none of the studies prove something of that size to be a worthy investment risk.  Lowering the sites on what is feasible now will make sense.

Complete airport runway expansion: According to my calculations, nearly $20 million has been invested in tower construction and property acquisition around the airport … not including the costs associated with the extension of Monocacy Boulevard.  That’s more than a big investment.  But still nothing has been done to complete acquisition of the easements required to lengthen the runways.  Imagine the economic benefit and revenue boost the city will gain from expanding Maryland’s second busiest airport!  This may be a challenge giving that the FAA is facing cuts from sequestration, but still worth pursuing.

Resolve unrealistic land use plans: Back in 2005 (I like to refer to the years around that time as the “Fantasy Years”), the City adopted a masterful novel called the Land Management Code.  Upon reflection and subsequent application (or lack thereof), it has become clear that many parts of that volume established unrealistic expectations that do not work for the new world order.  Consider the residential density formula for vacant downtown parcels … from a multifamily development perspective an increase could be warranted for certain core areas of downtown, which could provide the additional benefit of bringing more workforce housing to Frederick.

Better use of parking meters and decks, and onsite parking requirements: I could and should devote an entire blog post on this issue.  Meager efforts have been made in addressing how to generate enough revenue from meters to be able to finance the parking structure planned behind the headquarters of Frederick County Public Schools.  Imagine the incredible boost in property tax revenues the City of Frederick could realize from expanding development along the Carroll Creek … and the secret lies in two things: density and parking.

Resolve the sewer and water tap fees issue: Water and sewer tap fees are a significant hurdle to new service-sector businesses trying to locate downtown. Every commercial real estate agent in Frederick knows this is a common roadblock the stops prospective tenants and buyers cold. Even restaurateurs with the clout of Bryan Voltaggio struggle to overcome the expenses involved in opening new locations downtown.

3.  Fearless leadership and decision making:

For far too long the proverbial can has been kicked down the road from City Hall.  Much has been said about what has been accomplished; our next leader must be willing to truly address issues head on as the very fragile recovery continues.

At this point, I will give Mayor Randy the benefit of the doubt as a first term elected official, but I do think that he could have taken a stronger position on several of the issues listed above.  I believe that of this year’s crop of declared and would-be candidates all have the ability to lead.  But as the campaign gets more heated and the blood bath begins, let’s hope the strongest and best leader will emerge!

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 for Want2Dish.com.

With the looming loss of Bechtel jobs, Frederick’s commercial office market needs new employers more than ever.

“If you didn’t like 2012, you probably aren’t going to like 2013.”

CoStar analyts opened their 2012 office market recap with that somewhat dubious statement, but in the end they delivered a mixed bag of good and bad news.

The U.S. office market is more or less reflecting the U.S. economy:  hot in some spots, a sluggish recovery overall, but moving in the right direction at least.

• Absorption overall in the U.S. office market has improved, meaning that more space is being leased up than is becoming vacant.   Not surprisingly, office markets with high concentrations of technology and energy businesses are red-hot right now:  Seattle, San Jose, and Pittsburgh (which posted the lowest vacancy rate among the 20 top markets in the U.S. due to it’s coal and shale industries).
• The Washington D.C./Maryland/Northern Virginia market has already seen the negative effects of government spending cutbacks.  Absorptions in that market dropped.  In fact, northern Virginia had the steepest decline (4 1/2%) in net absorption of any major market nationwide.  Interestingly, despite the increase in vacant office space there rents are continuing to climb in northern Virginia (perhaps because private businesses continue to flee Maryland for Virginia’s business friendly tax structure).
• REITs are now buying portfolios of office buildings (as opposed to single purchases of large iconic buildings in top markets like New York and Washington, D.C.)  In fact, CoStar declared “the window for top-dollar deals in D.C. has closed.” REITs are shopping instead in secondary and tertiary markets for buildings that offer better yields than top markets will bear.
• Bechtel is vacating 123,000 SF of office space in Frederick this year.  That is a blow to the Frederick market, and is nudging Frederick’s office vacancy rates up to almost 15%, which otherwise would have remained stable around 13.5%.

The loss of a major employer like Bechtel and higher vacancies in Bethesda and Rockville will likely put some pressure on the Frederick office market this year.  And we don’t yet know what the fallout of government spending cuts will be.

There’s really only one solution to the problem, as MacRo Report Blog has covered repeatedly:

MARYLAND NEEDS MORE PRIVATE EMPLOYERS IN MARYLAND.

During a recent roundtable of Frederick’s commercial real estate professionals, my colleague Gary Large of Ausherman Properties said it best: ”We can’t fill 3 million square feet of unoccupied office space with companies from Frederick.”

2012 TOP 5 COMMERCIAL OFFICE SALES IN FREDERICK, MARYLAND

1) $16,511,000            PNC Bank Building – 110 Thomas Johnson Drive

Greenfield Partners purchased this office building in a portfolio sale of 23 properties worth $161,900,000 from Corporate Office Properties Trust (COPT) in July.  The building is 122,491 SF in size ($134.79/SF).

2)  $3,350,000           North Ridge Professional Center – 130 Thomas Johnson Drive

This 13,204 SF medical office building with multiple tenants sold in June ($253.71/SF).

3)  $950,000              45 East All Saints Street

An investor purchased this 5,585 SF office building that backs up to Carroll Creek in downtown Frederick ($170.10/SF).

4)  $714,010             Conley Farm Building 1 – 7101 Guilford Drive, Unit 100

A Square Investments, LLC. purchased this office condominium in September from Clagett Enterprises.  The property is 3,097 SF ($230.55/SF).

5)  $670,000             New Market Professional Center – 164 West Main Street, Units E & F

Lighthouse Financial Advisors sold this property in July.  The two office condominums total 2,897 SF ($231.27/SF).

There were a couple of office buildings that sold in Frederick that qualified for this list based on recorded selling price, but as they appear not to be non-arms length transactions and not necessarily representative of true market value, they were not included.

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.

A panel of leading Frederick commercial real estate professionals analyzes the market.

The Frederick County Office of Economic Development recently hosted a round-table discussion about the health and future of Frederick’s commercial real estate market, and I was invited to be a panelist.

I was joined by several esteemed colleagues, including:

Karl Morris, Director of Development, Matan Companies;

Gary Large, VP of Commercial Development, Ausherman Properties;

Jim Railey, President, Heritage Properties; and

Rick Farren, Senior Vice President, McShea & Company, who served as moderator of the group.

Our discussions covered the gamut of Frederick commercial real estate, from activity in the commercial real estate market past and present to apartment housing to Maryland’s failure to attract large employers.

Following is a snapshot of the main points of our debate.

The Big Picture

Karl Morris of Matan started the discussion by providing statistics that throws activity inFrederick’s commercial market—before and after the recession hit—into stark relief:

                                                     2003-2007                               2008-2012

Office Space Rentals             700,000 SF                                   75,000 SF

Flex Space Rentals                 710,000 SF                                 624,000 SF*

Industrial Space Rentals     1,000,000 SF                                 149,000 SF

*Total included 600,000 square feet leased to Wells Fargo & National Cancer Institute alone.

Apartments: The Next Big Thing is Already Yesterday’s News

 Apartment (multifamily) projects have exploded in theU.S. as distressed and foreclosed homeowners, along with skittish young adults, seek rental housing in droves.  Apartment vacancies are at a low 3.5% inFrederick.

According to Gary Large of Ausherman, there are three different apartment projects in the pipeline in Frederick County, which will bring a total of 1,000 new units.  Walnut Ridge, with 250 units, will be the first new apartment project in Frederick in 10 years.

Ausherman is finding a surprising niche market for apartments in Whittier:  divorcees.  Projects on the south side of Frederick, however, are drawing a younger market segment.

Panelists agreed that anyone trying to start a multifamily project at this point will be too late to the game to enjoy significant returns.  The Frederick market will be saturated by the time those units would hit the market.

Karl Morris noted during this discussion that while housing appears to be recovering (at last), it’s important to remember that there are still a great many people in the U.S. who can’t finance a home or are afraid to invest in homeownership.

It’s the Jobs, Stupid

With Bechtel moving 625 employees from Frederick to Northern Virginia, the office market is left with an even bigger hole to fill: Frederick now has a total of 800,000 square feet of unoccupied office space in the southern end of town alone.

Gary Large of Ausherman noted that with office rents in Rockville so low now, that a significantly higher number of Frederick residents are driving south to work than were prior to the recession.

The panelists agreed that Maryland is becoming less and less attractive to large national tenants, who more often than not choose to locate in Virginia instead of Maryland.  If there isn’t a significant effort by O’Malley and his team to effectively recruit new employers, the office vacancy rates in Frederick will remain high.  As Gary noted, “We can’t fill 3 million square feet of unoccupied office space with companies from Frederick.”

It doesn’t help that office space use overall is evolving, as more and more employers are hiring employees who work from their homes.

Flex is the Future

A member of the audience asked a great question:  “What happens to flex if we aren’t making stuff anymore?”

Danny Severn, a Sales Representative from St. John Properties shared that about 50-60% of their flex shells are now ultimately fitted out as office space versus for industrial or warehouse use.

Flex shells are much cheaper to rent and to finish than traditional Class A office space, and many businesses feel compelled to choose this no-frills option in an uncertain economy.

Karl Morris shared that Matan is banking on the “build to suit” flex lots like those in Wedgewood on the south side of town.  From an owner-user perspective, these properties are “shovel ready”—infrastructure is already in place to break ground, including water, sewer, traffic, and APFO.  Riverside Research Park is another example of this.

Frederick is a Safe Bet

The panel noted several reasons to be very optimistic about the future of Frederick’s commercial real estate market:

Ft. Detrick: While BRAC hasn’t brought as many jobs as hoped for, the improving economy may bring a resurgence of contractors and start-ups to the area related to Ft.Detrick.  The old buildings and labs at Ft.Detrick are very expensive to retro-fit, which means there is a good chance employers will choose to build out spaces in nearby Riverside Research Park instead.

Health and Bio Tech: Frederick has wisely cultivated a niche of health and biotech companies.  No one is arguing that growth in these industries has been—and should continue to be—explosive.  (The trick will be keeping these companies here once they outgrow start-up phase and become substantial employers.)

Frederick is a Jewel:  Gary Large concluded the discussions with this thought:  “Frederick still holds the quality of life card.”  And he is right. Frederick is the complete package:  tranquil countryside, excellent schools, and a beautiful, vibrant downtown with a thriving arts culture and world-class restaurants.

So, to sum it all up: if our governor will work in earnest to improve the balance between government and private employers in Maryland, Frederick’s commercial real estate market is poised to enter a sustained recovery.

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.

A big picture of Frederick County’s commercial market, including the top deals of 2012.

MacRo’s “Top 5 Commercial Real Estate Sales” blog posts are among our most popular with readers.

We decided to do a little something different for the 2012 commercial real estate sales recap.  We love data, statistics, and charts here at MacRo, so we gathered a fairly comprehensive list of the commercial real estate sales recorded in Frederick County for 2012, and sorted them by market segment.

This is an exercise we plan to repeat each January, as a method of tracking trends in Frederick’s commercial real estate market.  In the meantime, what do the numbers reveal in our inaugural year?

Based on the raw data we examined, about $200 million worth of commercial real estate changed hands in Frederick in 2012.

The market sector with the highest number of transactions yielded almost the lowest dollar volume in sales: mixed residential/commercial properties.  There are the small residential-sized mixed-use buildings lining the streets of Frederick City’s historic downtown and the county’s “main street” municipalities such as  the Golden Mile, New Market, Middletown, and Thurmont.

Office and warehouse sales and leasing are the lifeblood of the commercial real estate market here in Frederick, much like everywhere else.

We learned that the Holiday Inn at FSK Mall and the Holiday Inn Express were foreclosed on this past year.  (Were we the last to know about this?)

And of course we ranked the sales to share MacRo’s list of the top 5 commercial real estate sales in Frederick for 2012:

1) $20,910,000            Hilton Garden Inn – 7226 Corporate Court

Hospitality properties were hit very hard by the recession, as evidenced by the foreclosure of Frederick’s own Holiday Inns.  Investors are shedding these properties, and bargain hunters have been snatching them up in anticipation of improved revenues as the economy begins to build some steam.  RAA Management purchased this hotel from LTD Management Company in July.   The hotel is 80,000 SF in size and has 143 rooms ($261.38/SF; $146,244/room).

2) $16,511,000            PNC Bank Building – 110 Thomas Johnson Drive

Greenfield Partners purchased this office building in a portfolio sale worth $161,900,000 from Corporate Office Properties Trust in July.  The building is 122,491 SF in size ($134.79/SF).

3)  $14,642,486           Tranquility at Fredericktown – 6441 Jefferson Pike

Tranquility at Fredericktown was sold twice this past year.  In June of 2012, it was sold to investor/developer Russell Horman for $8,403,079.  He promptly flipped the property in December in a portfolio sale worth $85,100,000 to Capital Health Group.

4)  $9,600,000             Brooklawn Apartments – 1001 Carroll Parkway

Multifamily properties continued to be hot with commercial investors this year, so it’s no surprise that an apartment building made Frederick’s top 5 in 2012. ZOM, Inc., a real estate investment firm in Florida, sold Brooklawn to an investor in Massachusetts in December.  The building is 113,285 SF and has 86 units ($84.74/SF).

5)  $7,150,000             Frederick Brick Works – 184 East South  Street

Frederick Brick Works, Inc. purchased this property in October.  The property consists of a 13,362 SF industrial warehouse building situated on 25 acres of land zoned MU1 ($535.10/SF).

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.

MacRo, Ltd. is pleased to announce the sale of a 27-acre parcel on Ball Road in Frederick County for $425,000.  The sale closed on December 14, 2012.

The property is located in the Urbana school district, and features 10 acres of tillable land, a stream, and two approved perc tests.  Subdivision rights are intact.

Dave Wilkinson represented the sellers in the transaction.

For more information on how MacRo, Ltd. Real Estate Brokerage Services may be able to assist you in the sale or acquisition of land, contact Dave Wilkinson at 301-748—5670 or dave@macroltd.com.

White collar job growth is driving demand for the commercial real estate office segment.

Has 2012 been the “Year of Lame Duck” for commercial real estate?

The long awaited presidential election of this week marks the beginning of the end of a long period of uncertainty and paralysis that has effectively stalled America’s great capitalist engines.

Regardless of the outcome, the final results of this election will eliminate at least one unknown keeping corporate American sitting on the fence.  And as for the other issue causing anxiety throughout the business community—sequestration–it will more than likely be another month or two before the dust settles and congress deals with the looming budget cuts.

Once those decisions are made, business owners and corporations can adapt accordingly.  This “knowing” will stoke the economic engines somewhat, even if the outcome isn’t entirely what the business community was hoping for.

But let’s keep our fingers crossed that we will have a business-friendly leader in the Oval Office, because there are signs that corporate America is poised to grow at a healthy clip—given the right conditions.

For one thing, business investment in equipment and software nationwide reached a higher level during this past quarter than where it peaked during the previous economic recovery cycle in 2005.  Corporate profits are still at healthy levels as well.

And, it appears that what little growth the economy is experiencing overall has been driven by white collar jobs instead of the construction industry.  Construction is traditionally the catalyst of economic recoveries, so this represents a new type of recovery altogether—although a much slower one.

Hard to say what this means for the economy overall, but it has been very good for commercial office space demand throughout the U.S., and in Frederick as well.

A review of Frederick County, Maryland’s 3^rd quarter 2012 office segment results in the commercial real estate analytics databases of CoStar Group’scommercial real estate analytics database, turns up the following statistics

• Vacancy rates ticked down to 14.3% versus 15.6% during the 3^rd quarter of 2011.
• Occupancy rates rose to 85.7% from 84.4% during the same quarter last year.
• Office leasing rates declined slightly to $21.19 per square foot from $22.99 last year.
• There were 32 office lease deals this quarter, compared with 30 this time last year.

There wasn’t much action in the way of office building sales in Frederick last quarter, but what did sell was a pretty large deal:   the PNC Bank building at 110 Thomas Johnson Drive sold to a real estate investment firm in Connecticut for $16.5 million as part of a portfolio of office buildings that totaled $162 million.  Most of the other buildings in the portfolio were located in Columbia, Maryland.

In terms of large office lease deals in Frederick during the third quarter, Wells Fargo took about 8,000 square feet in a short-term lease in the Ballenger Creek Office Center.

So overall, the office market in Frederick is holding steady, while potential players are holding their breath, waiting to see how the “great unknowns” of this election and the budget crisis are resolved.

Speaking of the election, I hope that you got out there and celebrated our precious democracy by casting your vote!

“In reality, there is no such thing as not voting: you either vote by voting, or you vote by staying home and tacitly doubling the value of some Diehard’s vote.”

David Foster Wallac

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 for TheTentacle.com and Want2Dish.com.