Aussies sell nine Maryland properties as part of $770M deal -- Gazette.Net


Dexus Property Group, Australia’s largest office space owner, announced that it sold its nine-asset Maryland portfolio for about $89.7 million, as part of a $770 million deal with affiliates of Blackstone Real Estate Partners VII.

The sale of the Dexus central U.S. portfolio includes 65 industrial properties in Maryland, Virginia and eight other states. Blackstone acquired 16.6 million square feet, with a combined occupancy rate of 89.6.

The sale price “is in line with the estimated net book value” at June 30, 2012, Dexus said.

“This sale is consistent with Dexus’s current strategy to exit non-core U.S. markets,” CEO Darren Steinberg said in a news release. “The single-line transaction was made possible by the leasing success of our U.S. team, who increased the occupancy in the U.S. central portfolio by 12.8 percent in the six-month period after Dexus assumed leasing management in June 2011.”

The Maryland properties, clustered around Jessup and Baltimore, total 1.4 million square feet.

The new Blackstone portfolio is home to companies that ship everything from batteries and mixed nuts to photo equipment. And that’s just in Jessup.

The biggest Maryland property is a 454,000-square-foot, two-building warehouse complex in the Maryland Wholesale Food Market in Jessup at Ocean Avenue and 7970 Tarbay Drive, which Dexus acquired in 2004. The Howard County property is fully occupied by multiple tenants, including B&E Storage, which specializes in handling damage-sensitive paper and forest products.

The other Howard County properties:

8306 Patuxent Range Road and 8332 Bristol Court, Jessup, 152,000 square feet.

8350 and 8351 Bristol Court, Jessup, 133,000 square feet.

8155 Stayton Drive, Jessup, 126,000 square feet.

9112 Guilford Road, Columbia, 55,000 square feet.

The Baltimore-area properties:

1811 and 1831 Portal St. and 6615 Tributary St., Baltimore, 172,000 square feet.

989-991 Corporate Blvd., Linthicum Heights, 131,000 square feet.

1015 and 1025 W. Nursery Road, Linthicum Heights, 88,000 square feet.

21 and 23 Fontana Lane, Rosedale, 109,000 square feet.

Montgomery planning director resigns

Rollin Stanley, Montgomery County's director of planning, will leave his post in mid-May, according to the planning department.

Stanley held a staff meeting Thursday and announced his resignation to his staff, county planning department spokeswoman Valerie Berton said.

“The reason he is leaving is another professional opportunity,” she said.

Stanley was unavailable for comment Thursday.

Replacing Stanley will be difficult, said County Councilwoman Nancy Floreen (D-At large) of Garrett Park, who also is chairwoman of the county's Planning, Housing and Economic Development committee.

"He's been a real visionary for the county," she said. "We need that kind of spirit and enthusiasm and new ideas to take Montgomery County forward. I wish the planning board luck in finding a replacement.”

What made Stanley such an asset to the county was a combination of his experience and the strength, initiative and imagination he brought to the staff, said Royce Hanson, past chairman of the Montgomery County Planning Board.

While planning director, Stanley focused heavily on transit-oriented development, mixed-use development and redevelopment, Hanson said, noting Stanley’s work in the redevelopment of White Flint.

“I can only say that I hope that there is a continuation of the direction that Rollin set,” Hanson said.

The outspoken planning director came under fire in March for comments he made to Bethesda Magazine about a group of residents, one of whom later called for Stanley’s resignation in the same publication.

Floreen said she spoke personally to Stanley and said he told her that his departure is truly a "family decision."

Sales activity up in Baltimore’s warehouse market

The Baltimore industrial market saw an increase in sales during the first quarter, as investors sought out deals that are returning yields at pre-recession levels, according to real estate company CBRE.

There were 11 industrial sales in the quarter, compared with five a year earlier.

“The positive signs that we are seeing in the market underscore the desirability of Baltimore as a core industrial market for both institutional and private investors,” Chip Olsen, senior managing director of CBRE’s Baltimore office, said in a news release. “We continue to see more large retail and manufacturing warehouse users in the market than in previous years.”

Financing is readily available from a number of sources, while capitalization rates are at 2006-07 levels, the report said.

Olsen cautioned that developers are not rushing to build new speculative space, as economic uncertainty and federal budget gridlock continues. No buildings were completed, marking four consecutive quarters without a delivery.

Farther north in Harford County, new space will be added soon, as construction is almost complete on a second building at the Mid-Atlantic Distribution Center in Perryman. The project by Emory Properties and Ryan Development will add 692,000 square feet of industrial space this summer. A second 675,000-square-foot building could be delivered within nine months. Bob's Discount Furniture opened a distribution center in 2010 in the first 672,000-square-foot building.

The largest leasing transaction during the first quarter was the 226,475-square-foot deal signed by M&D Logistics at 8901 Snowden River Parkway in Columbia.

The overall Baltimore industrial vacancy rate fell to 10.9 percent during the first quarter, down from 11.5 percent at the end of 2011. The absorption rate turned positive by 896,372 square feet.

Bethesda garden apartments redevelopment approved

The Montgomery County Planning Board approved a rezoning request to tear down one of the few affordable apartment complexes in Bethesda and replace the aging four-story structures with three buildings that would reach as tall as 11 floors.

The Brown family, which owns nine residential buildings in the Bethesda central business district, wants to replace 260 units spread over four buildings at 4857, 4858, 4890 and 4900 Battery Lane, west of the intersection with Woodmont Avenue. The planning board gave its nod to the Glen Aldon plan, which would allow a maximum of 692 new units in three buildings.

The increased zoning density would be allowed in return for the developer’s plan to exceed the county’s requirement for new developments to set aside 12.5 percent of units for moderately priced dwellings.

The Glen Aldon development plan would set aside 15 percent of complex for moderately priced units and 5 percent for work force housing units

“This is probably the only time you’re going to see [work force housing] offered” in Bethesda, the Browns’ attorney, Nancy P. Regelin, with Shulman Rogers, said Thursday.

Although market prices are lower than in surrounding modern high-rises, none of the existing Glen Aldon units in the 5.7-acre complex is under any price regulation.

Regelin noted that the Browns could simply lock in higher rents by renovating and upgrading the existing buildings, but the development team wants to both expand the number of units and offer affordable housing. The Browns have owned the properties for about 60 years.

Under the board’s approval, 38 percent of the 48 units allowed with the density bonus would be reserved as affordable housing. The Browns plan to set aside the affordable units in other properties they own on Battery Lane.

The plan also won the endorsement of the county Department of Housing and Community Affairs, whose approval is needed for off-site moderately priced dwelling unit plans.

Howard planners approve 1.1M square feet in Columbia

The Howard Hughes Corp. of Dallas won approval from the Howard County Planning Board to develop three new apartment buildings that would add 1.1 million square feet of space to downtown Columbia.

The project, which has been taken over by Howard Hughes since the company was spun off in 2010 by shopping center giant General Growth Properties, is the first step in plans to add 13 million square feet under the Columbia master plan approved by the county.

The planning board approved building 817 rental units and 76,000 square feet of retail space on 10 acres of undeveloped land next to Columbia Mall.

The master plan would transform the vision of the planned community's original builder, the Rouse Cos., which General Growth acquired in 2003. The broader plan would allow as many as 5,500 residential units, 5 million square feet of office space, 1 million square feet of retail space and up to 640 hotel rooms.

First Potomac signs lease at Metro Park North

Data Design signed a 28,500-square-foot lease at the Campus at Metro Park North in Rockville, bringing the complex to 90 percent occupancy, according to its owner, First Potomac Realty Trust of Bethesda.

Data Design, an electronic hardware design company, will relocate from Gaithersburg.

The four-building, 190,720-square-foot Metro Park North is at 400 E. Gude Drive in the I-270 Corridor.

First Potomac also reported that DirecTV renewed its lease and expanded its space by 14,837 square feet for a total of 42,267 square feet at Gateway 270 West, bringing the Clarksburg property to 88 percent occupancy. Allstate Insurance renewed for 26,274 square feet in the same complex, which has six buildings totaling 253,618 square feet.

Best Buy closing two Baltimore-area stores

Discount electronics and appliance retailer Best Buy announced it was closing two Baltimore-area stores as part of a nationwide plan to close 50 outlets by the end of 2012.

Most locations will permanently close by May 12 as part of plans by the struggling company to cut 400 jobs.

In Baltimore, Best Buy is closing at the Inner Harbor Lockwood Place complex. The closing follows the loss of the neighboring Filene’s Basement when that company’s corporate parent, Syms, declared bankruptcy and shut its doors on both discount brands nationwide in January.

Best Buy also is closing in Hunt Valley.

St. John Properties signs three tenants in Frederick

St. John Properties of Baltimore reported signing three leases totaling almost 14,000 square feet at the Center at Monocacy, a 423,000-square-foot business complex in Frederick.

CBIZ, a professional services company providing accounting, employee benefits, retirement plan, and property and casualty products and services, leased 6,000 square feet. Jonathan Hamburger of CBRE represented the tenant.

Apex Diagnostic Services, a clinical laboratory that performs research and studies in a variety of medically related industries, leased 5,040 square feet. John Richards of NAI KLNB represented Apex.

HomePro Restoration, which provides disaster cleanup services for situations involving fire, water and mold damage, leased 2,760 square feet. Chad Tyler of Tyler Donegan represented HomePro.

In all three deals, Danny Severn of St. John Properties represented the landlord.

The 49-acre office center is near the intersection of Routes 85 and 355, as well as Interstates 70 and 270.

Federal Capital invests $29.5M in trailer park portfolio

Federal Capital Partners of Chevy Chase announced that it invested $29.5 million in a portfolio of manufactured home communities in Maryland, Pennsylvania and North Carolina.

The company will own the 1,358-pad portfolio under a newly created joint venture with the current owner, Horizon Land Co.

The portfolio is 88 percent leased.

“Manufactured home communities offer their residents the opportunity to own their own home at a substantial discount to either owning or renting a home in markets throughout the Mid-Atlantic,” Federal Capital managing partner Thomas A. Carr said in a news release. “For investors, these properties offer an excellent investment opportunity as well, typically offering strong and extremely stable cash flow.”

Walker & Dunlop closes $8.7M refinance loan

Walker & Dunlop of Bethesda announced that it recently arranged $8.7 million in permanent refinancing for 110 N. Washington St., an office building in downtown Rockville.

Walker & Dunlop worked with the lender, a national insurance company, to structure and underwrite short-term leases with significant tenant rollover during the loan term. The building is a five-story property with 69,791 net rentable square feet.

The building is next to Rockville Town Center near the Rockville Metrorail station and the Montgomery County courthouse.

Walker & Dunlop also arranged $90 million in financing for Hunt Valley Towne Centre, a class A shopping center owned by Greenberg Gibbons of Owings Mills.

The loan, which was provided by American International Group, was structured with an eight-year interest-only term. Hunt Valley Towne Centre is a 766,256-square-foot regional retail center anchored by a Wegmans supermarket.

Commercial real estate news items may be mailed to Robert Rand, The Business Gazette, 9030 Comprint Court, Gaithersburg, MD 20877; emailed to; or faxed to 301-670-7183.