Posts Tagged ‘ Industrial Real Estate ’

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.

MacRo Brokers Sale of Commercial Office Building/Radio Station to Manning Broadcasting

MacRo, Ltd. is pleased to announce the sale of a Frederick commercial office building known locally as the Key 103 radio station to long-time tenant Manning Broadcasting for $416,000.00.  

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.  Tom Rozynek of Frederick Land represented the purchaser.

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 Sells 2.95 Acre General Industrial Lot

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

Notes from the Streets of Commercial Real Estate

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.comKathy Krach is a commercial sales and leasing agent with MacRo.

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