City office building to be sold at auctionThe tight market...

COMMERCIAL REAL ESTATE

September 23, 1992|By Timothy J. Mullaney

City office building to be sold at auction

The tight market for tenants is tough enough, but the tight market for financing is being blamed for the latest office building auction to be scheduled in Baltimore.

On Oct. 13, 10 South Street will go up for auction because Maryland National Bank was unwilling to roll over a balloon loan to 10 South Street Associates, said Alan Grochal, attorney for 10 South Street Associates, whose general partners are former KMS Group Inc. founders Peter Kirk and Wilbur E. Simmons. The bank declined to comment.

The building is 89 percent leased to agencies of Baltimore City, Mr. Grochal said, leading to the auction's advertising pitch that the building is a deal that makes sense.

"It's almost 100 percent leased, which is unusual these days, plus it's leased to agencies of Baltimore City, which is a solid pay," the attorney said.

The auction at 10 South Street is the latest struggle that Mr. Kirk and Mr. Simmons have had during the industry recession. In May, the pair lost two Howard County buildings to Chevy Chase Federal Savings Bank when the Montgomery County thrift accepted the deeds to the buildings in lieu of foreclosure.

Master's candidates sign up for classes

Lots of people look to upgrade their skills during a recession by going back to school nights or weekends for a master's degree. But a master's in real estate? With the market as dead as it is?

Strange as it may seem, classes are still nearly full at Johns Hopkins University's Allan L. Berman Real Estate Institute, director Michael A. Anikeeff said. "I'm surprised myself," he admits.

"We have a maximum of 25 people in each center, downtown Baltimore and Montgomery County. I've reached 25 in Montgomery County and I'm at about 20 in Baltimore. That's people who meet the same criteria -- we haven't had to lower our criteria."

The big difference is that the classes didn't fill up nearly as soon as they did in 1990, when the institute first offered classes. They used to fill up months in advance -- now you can sign up practically up to the day classes begin.

"We argue that this is for the true believer in real estate," Mr. Anikeeff said, "the person who has been in it for a while and has decided to stay in it, even realizing it has ups and downs."

The other difference is that even though enrollment is close to steady, more students are taking only one course at a time, preserving time to buckle down at their full-time jobs.

Mr. Anikeeff said students entering the master's program usually are specialists such as real estate lawyers or architects who want to learn more about the overall development business.

The institute may be merely holding its own in enrollment, but the ranks of its outside advisory board is growing to 20 members, from 14, as Hopkins moves to add people who can help them oversee the program curriculum and help them improve faculty.

Among the newcomers are experts from the Brookings Institution and such real estate biggies as Equitable Real Estate Management, the Hazel Peterson Cos. and Santa Anita Real Estate Investment Trust.

Strapazza to open 2 restaurants in city

If Dan Stone thinks this week about the sweet smell of success, he'll probably find that success smells a lot like pizza.

Mr. Stone, developer of the Marsh & McLennan Building at 300 W. Pratt St. -- the small white building with the cast-iron facade across from Oriole Park at Camden Yards -- this week announced that Strapazza restaurants will open its third Maryland outlet at his building. Strapazza, an inexpensive Italian restaurant, already has locations in Towson and Annapolis. The downtown outlet is expected to open by the end of the year, Mr. Stone said.

The surprise is that the space so close to the stadium is being leased to a restaurant that Mr. Stone said didn't consider the stadium a major draw.

"It's not a bar facility or a night-life facility," Mr. Stone said, explaining that Strapazza will be after more of a business crowd than some nearby spots. "The stadium certainly is an attraction, but it's more the icing on the cake."

Mr. Stone said the building is now more than 75 percent full, and its debt to Maryland National Bank has been restructured in a way that makes the building profitable at 75 percent occupancy. "We're well in excess of break-even operation," he said.

Strapazza is set to open a second downtown location, at 201 N. Charles St., on Dec. 12.

David Johnson, leasing manager of that building, said Strapazza will bring 201 N. Charles' occupancy to about 60 percent. The building has been hurt by the loss of the law firm of Tydings & Rosenberg, which moved to 100 E. Pratt St.

"Luigi Coppola [Strapazza's co-owner] thought a downtown location was the next step," Mr. Johnson said. "It's a mid-line Italian restaurant most anyone can eat at."

Developers weigh bid on Pikesville condo

Following up last week's item that Belvedere Hotel developer/liquidators Joel Gamel and Elliott Sharaby are considering making an offer on a Pikesville condominium project -- that project is the Pavilion in the Park, at 4001 Old Court Road.

Robert Lefenfeld, vice president of Legg Mason Realty Group in Baltimore, said 53 of the 80 units at the Pavilion have been sold.

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