Symphony Woods Office Center, Rouse & Associates' landmark at the entrance to Columbia's Town Center, was sold at auction last week but will continue to operate under the developer's management.
Balcor Pension Investors IV, the Chicago-based lender who financed the centerwith an $11.9 million loan and then foreclosed on it, bought the property for $9 million.
It was the only bid at the auction, which took place Wednesday near the entrance to the county Circuit Courthouse in Ellicott City.
Court documents indicate two Rouse & Associates partnerships owed a total of $15 million in principal and interest on the building's loanas of March 31.
Linda G. Tresslar, the Balcor agent who made the bid, said she could not comment on the sale or foreclosure.
The foreclosure and sale must be approved within 15 days of the sale by a Circuit Court judge.
Known for its soothing ambience, which includes live piano music in the morning in the building's well-planted six-story atrium, the building is the regional headquarters for its Philadelphia-based developer, Rouse & Associates.
Headed by managing partnerWillard Rouse, a nephew of James Rouse, the company is not affiliated with either the Rouse Co. or James Rouse's Enterprise Development Corp.
"We will continue to have our office here; we are going to continue to manage the property," said Claiborn M. Carr III, Rouse & Associates regional partner. "Life will continue to go on as it hasin the (past)."
Rouse & Associates has developed more than 3 million square feet of office space in Maryland since the mid-1970s, and still operates more than 2 million. But the company has fallen victimto the near-crash of the commercial real estate market following theboom of the 1980s.
One of the symptoms of the market's sickness is that the recession has caused serious financial problems for many rent-paying businesses, including those occupying Symphony Woods.
"It ran into problems when several of our tenants declared bankruptcy and did not pay their rent," leaving the building without income for 10 percent of its 93,000 square feet of office space, Carr explained."That is reflective on the general economy, and I think the real estate community has been doubly hard-hit," with major corporations slashing expenses or filing for bankruptcy, he said.
"The industry is in greater shambles than at any time sincethe depression. It will be profoundly different when we emerge from this abyss that we're in right now," Carr said.
He predicted that banking regulations would make it much more difficult to obtain financing for speculative office buildings, and consequently make it harder for businesses to find space on short notice.
"There has to be much more long-term planning by American industry, which has not been renowned for that," Carr said.
Maryland National Bank, which itself is suffering because of commercial real estate problems, has foreclosed on three other Rouse & Associates projects in the Baltimore-Washington corridor, all of which likely will be auctioned off or deeded to the bank:
* The secondphase of Three Ponds Business Park at the Columbia Gateway Office Park, on which Rouse & Associates owes more than $9.2 million.
Whilethe first phase of the project is nearly full, the second has leasedonly about 10 percent of its 150,000 square feet.
* Longview Executive Park in Hunt Valley, in default by more than $16 million.
Only half of the 140,000 square feet in the project is leased.
* Maryland 95 Corporate Park in Laurel, in default by more than $11 million, with only 10,000 of its 50,000 square feet occupied.