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

MacRo, Ltd. is pleased to announce the sale of Lot 1, Section 1 in Ausherman Industrial Park for $462,500.  The buyer plans to construct and operate a concrete recycling facility on the property.

Property Address:  Ausherman Industrial Park on Reichs Ford Road

Lot Size:  2.95 acres

Legal Description: Map 77, Grid 18, Parcel 181

Listing Price: $560,000

Sale Price:  $462,500

Zoning:  GI – General Industrial

Closing Date:  January 31, 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

A recent surge in commercial property showings has not helped to narrow the pricing gap.

 The past several weeks at MacRo have been busier than any we can remember for a long time.  It feels as though we’ve shown more properties during the past three weeks than the past six months combined.  Along with a few contracts written each week, it has been an exciting time.

Frederick’s commercial real estate market has been in the doldrums so long, and there have been enough false starts, that it will take several quarters of sustained activity like this to change our outlook for the market overall.

But, activity has ramped up to the point that we feel compelled to remark on what is happening in the market.

The majority of calls we are getting are from potential owner/users or renters of warehouse and office space, seeking to expand, relocate, or start new businesses.  We’ve had a few inquiries from investors as well, but activity is not nearly as strong with investors.

Real estate owners are feeling compelled to move forward with getting their properties on the market.

MacRo is primarily seeing a surge in interest in properties within, and on the outskirts of, the City of Frederick.

While it’s great to finally see some activity in the market again, there remains a gap between buyer and seller perceptions of property value.

Buyers and tenants finally seem willing to get out and kick the tires and make offers. However, they are very skittish about paying too much.

Small to mid-sized business in particular are moving forward with business models that don’t factor in much in the way of real estate appreciation. They view the economics of financing a commercial real estate purchase as favorable compared with leasing, but they don’t seem to view commercial property as having short-term appreciation potential.

This conservative outlook plays a part in offering price.

On the flip side, there are still a number of sellers who have a somewhat inflated perception of what the market will bear in terms of price. Multiple showings of a property are exacerbating this somewhat—they feed the fantasy many property owners hold dear that Frederick is on the brink of a spike in commercial real estate values.  (It isn’t.)

It doesn’t help that so few commercial real estate deals were done in Frederick County during the past year.  A slim market with few comparables makes it difficult for everyone—appraisers, owners, potential buyers, lending institutions—to determine the value of a given property with any accuracy, especially in a transitioning market.

So to sum it up:  the phone is ringing a lot more here at the office, but it’s still challenging to make deals.

We want to hear from our readers—what are you seeing in the real estate and business communities of Frederick?  What is generating this sudden surge of interest in commercial real estate?  Are potential buyers feeling more optimistic about the economy, or is this activity the result of a collective decision to accept a “new normal” and move forward?

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 and for Want2Dish.com.  Kathy Krach is a commercial sales and leasing agent with MacRo.

Will the housing recovery boost Frederick’s industrial market in 2013?

 Overall, 2012 was a good year for leasing in Frederick’s industrial real estate market, at least from an absorption standpoint.   Total square footage leased (absorption) quadrupled last year over 2011 levels, with a total of 549,483 SF of industrial space leased during 2012 versus 102,365 SF in 2011.  This compares with negative absorption of (70,767) SF in 2010 and (174,193) SF in 2009.

Even taking into account that 330,000 SF of increased absorption in 2012 was due to delivery of National Cancer Institute’s new R&D building in Riverside Park during the 2^nd quarter, 2012 was still the best year for industrial leasing in Frederick in quite a while.

In terms of sales, 2012 was fairly quiet.  There were a couple of large deals cherry-picked by institutional investors, Matan bought some investment properties, and a few owner/users came off the fence to purchase warehouse space for their businesses.

Following are the top 5 industrial real estate deals of 2012:

1)     $12,200,000:  7114 and 7118 Geoffrey Way (Wedgewood IV in Frederick)

Emergent BioSolutions sold buildings 1 and 3 in Wedgewood IV to Matan Realty for $12.2 million in March.  The total portfolio was 292,000 SF ($41.78/SF).  Both industrial buildings are 146,000 SF in size.  Both buildings had been vacant since Emergent BioSolutions purchased them in 2005.  Matan has the properties listed for lease.

2)   $4,457,854:  4484 Quad County Court (84 Lumber in Mt. Airy)

84 Lumber sold their site in Mt. Airy in June to Spirit Realty Capital for a price that computed to $147.25/SF for the building or $3.49/SF for the nearly 30 acres of land.  Spirit Realty Capital specializes in financing and investing in single tenant sale/leaseback deals.

3)  $3,000,000:  630 Solarex Court (B.P. Solarex in Frederick)

Bristol Frederick, LLC purchased the 157,483 SF BP Solarex property in June for the bargain price of $19.05/SF for the building or $2.00/SF for the 23 acres of land.  The property is once again on the market, for sale and lease (65,000 SF).  Prices are not listed.

4)  $2,999,000:  5245 Westview Drive (Fitness First in Frederick)

Fitness First purchased this 23,011 SF building ($130.33/SF) in March from private owner/investors in Glenelg, Maryland.

5) $1,500,000:  6720 Manor Woods Road in Frederick

Grant County Mulch of West Virginia purchased this industrial warehouse property for about $129/SF in February to expand their mulch business.  This property was never listed for sale.  The mulch company approached the owner directly to initiate the sale of the property.

Looking forward to 2013, the crystal ball is a little murky.

GDP stumbled during the 4^th quarter of 2012, and there were three main drivers behind the slowdown:  inventories, exports, and government spending.

Defense spending declined 22% (on an annualized basis) during the 4^th quarter of 2012 as government agencies and contractors scaled back in anticipation of sequestration.  Defense spending in this area has a much greater impact on the office market than industrial, but because Frederick is so dependent on government jobs and spending it is always worth mentioning when a big change occurs.

Industrial real estate demand is primarily driven by inventories related to manufacturing, construction, and retail.

Major retailers are holding fast to a very tight just-in-time inventory approach.  The good news buried in there is that when retail sales do rise, so will inventories and warehouse absorption along with them.  I’m not sure how big an impact retail inventories have on Frederick’s industrial real estate market overall.

I do know residential construction will have an impact on industrial real estate demand locally.

New housing construction has a multiplier effect on a local economy:  construction jobs, warehouse demand, materials, home sales, etc.  Given that the number of residential housing permits issued in Frederick County in 2012 almost doubled from the previous year, one would hope that translates into improved demand for local warehouse space.

Housing inventories in Frederick are lower than they have been in years, and well below the historical average, which means that building permits will most likely continue to be issued at a brisk(er) pace to meet demand for housing in Frederick.

I’m curious how much of the demand for Frederick’s industrial real estate market is driven by residential construction and retail sales inventories.  If any of my readers has insight into that, please comment!

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.

Industrial real estate investors in Frederick waited for election results and held out for better properties.

The third quarter of 2012 shaped up exactly as anticipated, with most of the players in the real estate market waiting out the election results. Given how the election played out, most economists don’t expect much in the way of GDP growth in 2013—painfully disappointing, but true.

There were, however, some green shoots in the economy during the past quarter worth mentioning:

• For the first time since the recession began, residential housing actually contributed to GDP during the 3^rd quarter of 2012.
• Industrial production is not what it was before the recession, but at a 3% growth rate it is growing at a stronger rate than the economy overall.

Both of these are good indicators for growth in the industrial real estate segment, although commercial real estate overall won’t recover fully until the U.S. reaches pre-recession employment, which at this rate most likely won’t happen until late 2014 at the earliest.

While there was some cherry picking of prime Frederick industrial properties at bargain prices during the second quarter of 2012, the action in the industrial real estate segment in Frederick County was somewhat sparse during the third quarter.

In terms of sales, one million dollar industrial property sold in Frederick County during the third quarter:

8052 Ball Road: This auto repair and salvage facility near Ijamsville was sold by RSS Enterprise LTD to R.D. Stup for $1,000,000 ($58.82/SF) in August of 2012. Mr. Stup has been the operator of the business for a long time, and the transaction likely represented a buy out of other members of the family.

The Wedgewood industrial business parks were a popular location during the quarter, as two fairly large industrial lease deals closed there:

4600 Wedgewood Boulevard: Kohl Building Products signed a lease for 56,000 square feet ($6.00/SF NNN) in the Wedgewood II industrial complex with a move-in date of January 2013.  Kohl is exchanging their 18,000 sq. ft. space on Urbana Pike for the larger space at Wedgewood.

4510 Buckeystown Pike: GSA took 60,000 sq. ft ($6.50/SF NNN) in the Wedgewood South I industrial complex during the quarter with a move-in date of March 2013. This coincides with  the September vacancy of about the same square footage in that building by RMS Direct, a mail fulfillment business.

How does the rest of 2012 and beyond look for industrial real estate? That depends in large part on retail sales and residential construction. Look for an update on the retail segment of Frederick’s commercial real estate market, as well as a report on recent Frederick-area land sales, in upcoming MacRo Report Blog posts.

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

Frederick County Solarex property sold to out-of-state concern.

Nationwide, the flow of European investment capital into the United States has combined with our sluggish economy to bring the cost of capital to historic lows, which in turn has real estate investors hunting for good deals.

The biggest news in industrial real estate in Frederick during the second quarter was the sale of the BP Solarex property to Bristol Frederick, LLC at the bargain price of $3 million ($100 per SF for the building or a surprising $2.99 per SF for the 23 acres of land alone).  At that price, it could be that the structure will be razed and potentially re-subdivided.

When you consider that the old 84 Lumber site in Mt. Airy was sold just 10 days earlier to Spirit Finance Group for $4.5 million ($147.25 per SF for the building or a $3.49 per SF for the 29.58 acres of land alone), it helps to put that price into perspective.

Bristol Capital of Bethesda is co-owned by a principal of the Farragut Group, a consulting firm in Washington, D.C. specializing in distressed commercial real estate assets. Spirit Finance is a commercial real estate investment firm in Scottsdale, Arizona. No word yet on whether either of those investors have prospective tenants in their sights.

It’s a buyer’s market out there, folks, provided you are one of the lucky investors who can get their hands on some of that cheap investment capital.

Another bargain that hit the news recently was the sale of the former John Deer facility at the southwest corner of New Design Road and Agro Drive, in one of the county’s very few remaining parks zoned for general industrial use.  This 5.64 acre site with 13,500 square feet under roof sold $1.38 million ($102 per SF for the building or a $5.62 per SF for the 5.64 acres of land alone).

Due to the shortage of general industrial zoned property in the county, other sites are actively being marketed in the high $8.00 per SF range.  These sellers are capable of patiently waiting, knowing that the short supply will eventually attract buyers willing to pay their price.

Overall, results for Frederick’s industrial real estate leasing market were a mixed bag this past quarter. According to CoStar Group, vacancy rates continue to tick down, posting 16.2% versus 18.1% during the second quarter last year; and absorption of vacant space took a significant jump. Those results were offset by a slight decline in rental rates to $6.71 from $6.85 this time last year, however.

Will this buyer’s market eventually translate to improvements in Frederick’s commercial real estate market? Hard to say.

The phone is certainly ringing more these days at MacRo.  While deals are being made, many sellers and buyers remain very cautious when it comes to pulling the trigger.

It’s still difficult for smaller local investors to get financing for deals, and for the most part sellers are not motivated enough to overcome their frustration at the stagnated values of commercial real estate assets.

We spoke to Michael Pugh, one of Frederick County’s rising commercial real estate appraisal gurus, to get his birds-eye view of Frederick’s industrial market. He had the following insights to share:

“The industrial market was arguably the hardest-hit segment of commercial real estate in Frederick, given that the backbone of that market was residential and commercial building. Commercial construction companies that can chase government contracts are doing well, but not much construction is going on in the private sector. Until the construction industry gets straightened out, Frederick’s industrial real estate market needs more manufacturing jobs [to offset that loss]. 

“The Frederick News Post recently reported that the old Alcoa site [former Eastalco Aluminum facility in Adamstown] is in the running for a manufacturing facility. That would be great for Frederick; I’m on pins and needles hoping it happens. But the fact is that U.S. manufacturing companies look to Alabama, Tennessee, Virginia, and even China to start new operations. The less than friendly business spirit out of Annapolis has made it too hard for them to start up and operate profitably in Maryland.

“Frederick County’s unemployment rate was up a little bit again last month, which is worrisome. At the height of the real estate boom, unemployment in Frederick was 3 ½%, and today it stands at 6%–nearly double. And under-employment, which no one at any level of government seems to be talking about, is at its highest level ever. What that means is that a lot of people who are working aren’t working at their full capacity.

“The European debt crisis is still not quite resolved, the election is looming, and as a result American credit markets are still very skittish.“

So there you have it–as the country collectively waits for November, it doesn’t appear that much is going to change in the economy, or for Frederick’s real estate values.

In next week’s post, I’ll dig a little deeper into those job numbers Michael Pugh mentioned to provide some perspective on just how important those manufacturing jobs would be to Frederick, and to Maryland.

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

Real Estate recovery shows shift from “Flight to Quality” to “Flight to Value” in Frederick’s commercial industrial market.

The U.S. seems to be continuing a slow and messy climb out of this dreadful recession. At least the experts seem to agree that what we are experiencing is in fact an economic recovery, even if it doesn’t always feel that way. It’s more of a two steps forward, one step back dance.

The performance of the industrial real estate market uncannily mirrors Gross Domestic Product (GDP) growth (or lack thereof), primarily because demand for it is so closely tied to activity in the manufacturing and retail sectors of the U.S. economy. Right now, that’s a good thing.

Costar Group, the nation’s leading provider of commercial real estate trends and intelligence, reported that 1^st quarter results for the industrial segment continued a trend of sustained, but  marginal, improvement during the past year.  (Just like the U.S. GDP). Overall, U.S. industrial vacancies are down and rents are beginning to climb, especially in markets experiencing job growth.

Economists at Costar expect this trend will continue for several reasons:

• Corporate profits are still at all-time highs, and the economy is on target to add two million jobs this year.
• Manufacturing output has increased significantly. American manufacturing businesses have learned to get a lot more done with a lot fewer people, so manufacturing jobs are not expected to recover to pre-recession levels any time soon (if ever). But that’s okay, because output is what drives demand for industrial real estate space, not jobs.
• There is virtually no new-build industrial real estate in the pipeline. What little is being built is build-to-suit, so it won’t impact vacancy rates. (Interesting to note that Amazon alone is responsible for 22% of new industrial construction during the past quarter: they are building millions of square feet of warehouse space all over the U.S. for their distribution channels.)
• The U.S. still has the cheapest energy costs because of our gas glut, and our currency is undervalued which is good for exports.

One interesting side note of Costar’s presentation (unrelated to real estate): natural resources job growth is very strong, and if the U.S. finally starts drilling for oil, energy could be our next dot.com boom.

The Frederick industrial market is enjoying proximity to Washington D.C., which is the 15^th highest in the nation in terms of employment growth and retail sales (both of which drive demand for small bay warehouse space). Warehouse and flex space vacancies declined in Frederick during the past quarter, and rents are beginning to climb slightly again.

St. John Properties has been the biggest player in Frederick industrial real estate this year, representing nearly 40% of all industrial lease transactions (in terms of square footage) for 2012 so far.  The firm is also the largest developer of flex industrial real estate products in the state of Maryland.

Matt Holbrook, regional partner of St. John Properties, isn’t feeling as optimistic as CoStar about the remainder of 2012.

“There was lots of energy and momentum in January, February, and March. Everything pointed in the right direction. Now in May, large macroeconomic factors are giving people pause,” said Holbrook. “Between the stock market, the Euro, the election, and the fiscal cliffs our state and federal governments are facing—not to mention that Maryland is ever increasing taxes—it’s hard to tell whether the industrial real estate market will enter a sustained recovery.”

Holbrook did note some positive trends in Frederick’s industrial market. “Usually in a down market, you hear people talking about ‘flight to quality’ because tenants will leverage declining rents to get better space for the same money. But instead what we are seeing now is a ‘flight to value’—businesses are seeking lower rents in better locations. People see value in our flex products for office build outs, so we are snagging tenants who would normally lease traditional office space. And part of that “flight to value” is a migration of Montgomery County businesses to Frederick. Taxes and rents are cheaper here, and Frederick is so convenient to the I270 corridor. We expect to continue to enjoy that for a while.”

Holbrook continued, “I think this is the new normal. We are seeing a big reset in spending patterns. The lines for $5 coffees at Starbucks are shorter, and the lines for expensive Class A office space are shorter.”

As noted in the MacRo Report Blog’s Commercial Office Market Update of May 10, 2012, it was noted that certain sectors of Frederick’s office users have been attracted away from the traditional office building setting to the more economical flex market, which averages at least $2.00 to $3.00 per square foot less in annual lease rates.

As we have covered in previous posts, the overbuilding of commercial, industrial and residential product that took place in the early to mid 2000’s will take some time to flush out. There is no question that there is increased activity throughout the Land and Commercial Real Estate market here in Frederick County, Maryland and around the nation … the “Flight to Value” that Matt Holbrook referenced is actually a good sign that the real estate recovery is progressing ahead … albeit a slow and fragile one.

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

MacRo, Ltd. Real Estate Brokerage Services assists buyer in purchasing Frederick, Maryland general industrial lot.

Legal Description: Lot 1B, Dudrow Business Park, Tax Map 86, Grid 21, Parcel 239

Sale Price:  $1,500,000

Zoning: GI- General Industrial

Closing Date:  March 27, 2012

This property is 11.50 acres of general industrial land off Buckeystown Pike in Frederick, Maryland.

MacRo, Ltd. is pleased to have represented L/B Water Service, Inc in purchasing this parcel. This property is a vacant parcel located in the rear of the BlueLinx building products distribution facility, which was formerly a division of Georgia-Pacific Corporation.  Construction is scheduled to begin in June of this year. LB anticipates moving their regional organization from their current location on the Frederick Brick Works property upon completion in spring 2013.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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