Real estate in D.C.touted for reboundRepeat it, believe...

COMMERCIAL REAL ESTATE

November 11, 1992|By Timothy J. Mullaney

Real estate in D.C.touted for rebound

Repeat it, believe it: Real Estate Will Get Better Someday. And when it does, Washington will be one of the office markets leading the industry's recovery, a new study says.

A report from the Real Estate Research Center in Chicago and Equitable Real Estate Management Inc. of Atlanta says Washington will be the first market to recover from the recession. Recovery, to them, means vacancy rates low enough for rents to begin rising.

Atlanta and Seattle will be close behind in the recovery, the study adds.

The study, "Emerging Trends in Real Estate: 1993," polled about institutional investors who work in real estate.

It was confined to the top 16 metropolitan markets, a cut that Baltimore doesn't make. Each market was rated on a scale from 1 to 10, with 10 the highest.

In a measure of how tough things still are, Washington's 6 was the top mark. The worst market: New York.

"Seven or above reflects restored investor confidence in a market," said Jonathan Miller, a vice president of Equitable Real Estate. "Washington is not there yet, and worse, no market is there yet. . . . Recovery [in Washington] is projected for 1994."

Although Baltimore's office market wasn't included in the study, Mr. Miller says the city was noted in a companion section devoted to warehouse and industrial real estate. "It is ranked as one of the strongest markets, with vacancies under 5 percent," he said.

Mr. Miller contends that price cuts have almost been completed in downtown Washington, where a new report by the local firm of Spaulding & Slye sees a 11.6 percent vacancy rate at the end of the third quarter.

"You have to distinguish the downtown from the suburban markets, and we think the suburban markets are going to stay very soft, especially because of the defense cutbacks," Mr. Miller said.

Spaulding & Slye sees a tough 1993 downtown, too -- it says foreclosures will rise in downtown Washington next year. "We can expect 1993 to be even more of a roller coaster than the eventful year of 1992," its report said.

First Federal building in Annapolis to be sold

Back to the present, Alex. Cooper Auctioneers will auction the First Federal Savings Bank of Annapolis building on West Street in Annapolis Nov. 18.

The 36,000-square-foot building is being auctioned on behalf of federal thrift regulators, said Paul Cooper, vice president of the Towson auctioneering firm.

The now-failed thrift sold the 25-year-old building to investors in 1982 and then leased part of it back, Mr. Cooper said. The thrift financed the sale and the owners have defaulted.

Mr. Cooper said the former owners paid $2.4 million for the building. That works out to about $66 a square foot. But the price isn't likely to be that high.

"Today they've been going for $50 a square foot, but we're not looking for that much," he said.

Alex. Cooper will also be auctioning a 120,000-square-foot Randallstown strip shopping center that is about 75 percent vacant, on Nov. 23. The center, on Liberty Road near Old Court Road, used to be anchored by an Ames department store.

RTC, other properties in online data base

A small Fort Washington data base company called Business Information Network Inc. has figured out how to make money out of the ashes of real estate: by connecting federal bank and thrift regulators to people who might want to buy properties the government is stuck with.

"A couple of years ago when Resolution Trust Corp. was very prominent in the news . . . they were having trouble getting information out there," said Niels Nielsen, director of marketing for the company's Federal Information Network.

Business Information Network was already in the data base business, but this was a whole new wave to ride. Two years ago, the company brought out RTCNeT, an online data base with up-to-the-minute information about properties the RTC has for sale.

Two months ago, the company began the Federal Information Network, a data base that includes RTC properties and properties controlled by the Department of Housing and Urban Development, the Department of Veterans Affairs and the Federal Deposit Insurance Corp.

Agencies such as the RTC have their own ways of listing properties for investors. But those methods, including CD-ROM disks and printouts, aren't as flexible, Mr. Nielsen said.

Federal Information Network subscribers can target a specific ZIP code, city or state. Searches can be customized, for example, according to price, type of property and the size of the property, including the number of bedrooms, units, square feet or acreage.

A quick look at ZIP codes beginning with 212 turns up 127 Baltimore-area properties, ranging from a $12,000 house on North Caroline Street to the Brokerage mixed-use complex near the Inner Harbor -- asking price $8 million.

Realtors establish commercial division

The Greater Baltimore Board of Realtors has moved ahead with a reform to improve services to the commercial side of the real estate industry, creating a separate division for commercial and industrial Realtors.

"This new division specially addresses the needs and concerns of our commercial Realtor members," said board president Andrew J. A. Chriss, who is a commercial real estate broker for Manekin Corp.

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