Posts Tagged ‘ Industrial Real Estate ’

Multifamily Deals Total $57,000,000 in Frederick during 2nd Quarter

Multifamily was the strongest segment during the second quarter, posting three of the top five deals and over 700,000 square feet sold.

Second quarter sales of Frederick County commercial real estate kept pace with the same time period last year, an encouraging sign that the local commercial market remains stable despite mixed economic signals nationwide.  Second quarter 2014 commercial real estate sales in Frederick  totaled $117.5 million, versus $119.5 for the second quarter last year and $19.5 million for the second quarter of 2012.

There were three large multifamily deals in Frederick during the quarter, as that segment continues to draw the most interest from REITs and national investment firms.  (MacRo Report will detail the top deals of the second quarter in a future post).

Industrial and warehouse properties placed a strong second, which reflects the activity we are seeing on the local level as small to medium-sized businesses are moving forward with long-postponed decisions regarding leasing and buying warehouse and flex space.  In reviewing second quarter transactions, it was interesting to note that there were several transactions in the municipalities of Brunswick and Thurmont, an indication that activity in the commercial market is increasing throughout the entire county.

It was a busy quarter for commercial land sales as well, with  double the number of transactions (but only 35 acres sold); the median price was $203,098 per acre.  That compares to 238 acres during the same quarter last year, at a median price of $90,000 per acre.

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 quarter reported, and are deemed reliable.  

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

MacRo Sells 8+ Acres of Industrial Land in Woodsboro, MD

MacRo, Ltd. is pleased to announce the sale of 8+ acres of industrial land in Woodsboro, Maryland.  

The property sold is an 8.8 acre parcel of land with industrial zoning located within the town of Woodsboro.  This property is “raw land” and did not include any improvements or entitlements.

The buyer is a local Woodsboro based business that plans to develop the land and relocate their operation in the future.

The sale price was $208,000.  Dave Wilkinson 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 of your land, contact David Wilkinson at 301-748-5670 or dave@macroltd.com.

Frederick’s Strong Industrial Market Reflects Nationwide Demand for Warehouses

Low interest rates, steady consumer demand, and record high industrial production is fueling strong demand for industrial real estate despite stunted first quarter GDP.

Rumor has it that the U.S. economy will at long last reach full employment recovery–a gain of 9 million jobs from the trough of the recession–this summer.  At five years, this recovery from “The Great Recession” has been twice as long in the making as that from the dot com bust in the early ’90s.

The Great QE Taper doesn’t appear to be putting heavy pressure on interest rates, so let’s all hope that the abysmal first quarter GDP growth of 0.1% was a weather-related anomaly.  Economists are banking on a combination of less drag from the government sector and more fuel from the housing sector to boost overall 2014 GDP into a more tolerable 3% range.  (Economists are betting on the housing market because the U.S. is creating households at a faster clip than housing stock, which is pushing  inventories to critical lows in many markets.  However, I wonder if they are taking into account the impact of a trillion dollars of student loan debt on the economic capacity of those new households.)

In the meantime, both industrial production and truck tonnage indexes posted all time highs during an otherwise lackluster first quarter, both of which translate into local demand for warehouse space.  Frederick’s industrial market had a much stronger first quarter than the same time period last year.  MacRo Report covered the top three industrial deals in Frederick’s Top 5 Commercial Deals for 1st Quarter 2014.  Below are basic statistics on Frederick’s warehouse market for 2013 and the first quarter of this year:

 

The second quarter of 2013 results were boosted by a First Potomac REIT portfolio sale that included $38 million and 545,000 square feet worth of Frederick County warehouse properties.

Nationwide, industrial vacancy rates have dipped below levels not seen since the height of the real estate boom back in the mid ’90s.  According to CoStar (the most comprehensive database of commercial real estate in the U.S.), Frederick’s industrial vacancy rate dropped to 11% for the first quarter of this year from 12.6% during the same time period of 2013.  Properties that range in size from 0-100,000 square feet fall into CoStar’s “light industrial” category; most of Frederick County’s industrial properties fall under into this category.  Nationwide, light industrial enjoyed the strongest rent growth and vacancy rate improvements of the warehouse segment during the past quarter.

Anecdotally, we are noting at MacRo that lease rates for industrial properties appear to have stabilized, and lease concessions are less generous than they were a year ago.  That coupled with low inventories of warehouse properties in Frederick could be setting the stage for lease rate increases, assuming the economy gets back into a stable growth rate.

Following are Frederick industrial leasing statistics gathered from CoStar for the first quarter of 2014:

 

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.

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.

MacRo Brokers Sale of Flex Warehouse Building on Metropolitan Court

MacRo is pleased to announce the sale of 4537 Metropolitan Court, Frederick, Maryland 21704 for $2,050,000.

The sale closed on January 17, 2014.

This flex brick warehouse building has 32,172 square feet, ceiling heights as high as 16 feet, and a loading dock.  The property is situated on a 3.98 acre lot.  The intended use will be for a high end firearms training facility with plans to open in late 2014.

Rocky Mackintosh, President of MacRo, Ltd., was the agent who brokered the transaction between the seller, Heritage-Frederick Property, LLC, and the Buyer, Frederick – TWG Limited Partnership.

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

MacRo Brokers Lease of Office/Warehouse on Yukon Court

MacRo is pleased to announce the lease of 7,200 square feet of space at 5411 Yukon Court, in Frederick.  

The leased premises includes 2,700 square feet of finished office space and 4,500 square feet of warehouse space with 20′ ceiling heights.  The building is located just south of the City of Frederick at the US-15/340 and Mount Zion Road interchange.

David Wilkinson represented the landlord, OK Properties, LLC in this transaction.  The tenant is NexGreen, a lawn care and landscape maintenance company.

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 David Wilkinson: 301-748-5670 or dave@macroltd.com.

MacRo Brokers Lease of Office/Warehouse Space on Mack Avenue

MacRo is pleased to announce the lease of a 16,900 SF office/warehouse space at 4519 Mack Avenue in Frederick.

The total warehouse space includes a 1,500 SF office area and as well as a 20′ ceiling with interior security and fenced outside area.  It is also located just 2.5 miles south of Exit 31 / the I-270 interchange.

Rocky Mackintosh represented the landlord, Johnco, LLC., in this transaction.  The tenant is RCS Construction Services.

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 Brokers Lease Renewal for Office/Warehouse Space on Industry Lane

MacRo, Ltd. is pleased to have brokered a lease renewal for 5713 Industry Lane, Suites 49 & 50, Frederick.

Rocky Mackintosh, President of MacRo, Ltd., represented the landlord for this 5,664 SF combination office and warehouse space.

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

 

MacRo Leases Warehouse Building on Mack Avenue

MacRo is pleased to announce the lease of a 9,600 SF warehouse building at 4570 Mack Avenue in Frederick with a purchase option agreement.

This building is a combination of high-ceiling warehouse space in the rear and office space in the front.  It has a great Frederick County location near I-70 and I-270 ramps.

Rocky Mackintosh represented the landlord in this transaction.  The tenant is RCS Construction Services.

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.

REIT Purchase Boosts Frederick Warehouse Sales by $38 Million during 2Q 2013

Fundamentals for Frederick’s industrial properties are mixed, but overall the market for industrial properties improved during the second quarter of 2013.

We are past the halfway mark of 2013, and so far no dips or stalls after a strong new year–Frederick’s commercial real estate market is still humming along.

As the recovery of the commercial real estate market appears to be in earnest, investors are exploring the potential of other commercial segments besides multifamily.  Industrial properties turned up on their radar as vacancy rates began dropping and rents stabilizing.

In a recent  MacRo report post, we reported on the $38 million sale of three warehouse properties in Frederick that were included in a REIT portfolio of 23 properties worth $242 million.

According to the analysts at CoStar, REITS and other investors have become so enthusiastic about industrial real estate that CAP rates for the segment are at historic lows of 6.5%.  During the past quarter, domestic spending accounted for almost 70% of total GDP growth, and domestic spending translates to good consumption–which is always good for warehouse demand.

On the local level, the Truck Tonnage index is up over 5% year over year, which reflects a recovery in local markets and a firming up of small bay warehouse demand.  At MacRo, we’ve noticed that the lease market for small bay warehouse space in Frederick is hovering around the $4.50-$4.75 per square foot range;  listings priced at higher rates seem to sit on the market for a long time.

Inquiries from interested buyers of warehouse space have been brisk during the past couple of quarters, and we get purchase offers even for MacRo listings advertised for lease only.

There were $40 million worth of warehouse properties sold in Frederick during the second quarter of this year, versus about $1 million during the same period last year.  According to CoStar’s databases, vacancy rates in Frederick have risen since last year (about 15% this quarter versus 12% this time last year),and lease rates are slightly lower:  $5.52 per square foot versus $5.49 last year.

It’s important to keep in mind that some of the decline in average lease rates is due to renewals of  leases that were negotiated near the market peak, and are now rolling over to current market rates.  The industrial market here in Frederick will continue to feel the effects of lease rate rollbacks for the next 18 months of so, but to a lesser degree as the market continues to recover.

Following are the top five sales of warehouse properties during the second quarter of 2013:

1) $37,820,100     Wedgewood Business Park – 6900 English Muffin Way and 4612 Navistar Drive; McKinney Industrial Park – 4451 Georgia Pacific Blvd

First Potomac Realty Trust sold a portfolio of 23 industrial properties worth $242 million to Blackstone Real Estate Partners. The three properties listed above were included in that portfolio.

4612 Navistar Drive, a vacant light manufacturing building 209,369 SF in size, sold for $15,533,300 ($74.10/SF). 6900 English Muffin Way, a 165,690 SF warehouse, sold for $10,998,300 ($66.38/SF).  4451 Georgia Pacific Blvd, a 169,592 SF warehouse, sold for $11,288,500 ($66.56/SF).

First Potomac intends to reinvest the proceeds of this sale into high-quality LEED certified office properties in the Washington, D.C. area. They are pursuing a niche market of Class A energy-efficient office properties.

2) $1,100,000     MAACO Body Shop – 1439 Tilco Drive

Duaine Goodno sold this property to John Fitzgerald of Fitzgerald Auto in April ($87.65/SF).  Fitzgerald also purchased an adjacent 1.4 acre parcel of industrial zoned land for $250,000.

3) $600,000     2210 Urbana Pike

Lindsay Blair sold this storage warehouse in May to Core Commercial Brokerage.  The property is 6,000 SF ($100.00/SF).

4) $392,500     Industrial Center East – 1539 Tilco Drive

H&G Ice Frederick LLC sold Unit 119 in this industrial condo building to PJ Holdings, LLC in June ($90.63/SF).

5) $385,000     Industrial Center East – 1539 Tilco Drive

J&C Trout Enterprises LLC bought Unit 102 , a 4,288 square foot industrial condo, in April ($89.79/SF).

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

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