Baltimore fares poorly on realty investmentQuestion: How...

COMMERCIAL REAL ESTATE

January 27, 1993|By Timothy J. Mullaney

Baltimore fares poorly on realty investment

Question: How does Baltimore stack up against other cities when it comes to investment prospects in real estate?

Answer: How does last place grab you?

That's where our town finished in a new study by Ernst & Young, the national accounting firm, and the National Real Estate Index. The study examined 24 cities in the West and the Northeast and found Baltimore weak in nearly every area. And the weakness isn't limited to downtown -- markets for suburban office space and for retail space, which is concentrated in the suburbs, showed problems, too.

The area doesn't really have a huge glut of vacancies. But prospects for filling the empty space -- soon, anyway -- aren't good.

Metropolitan Baltimore lost 2.6 percent of its jobs during the 12-month period ending last June, Ernst & Young said. Largely because of that fact, the investment outlook is "poor" for downtown office space, suburban office space and apartment complexes, the firm said.

The area's warehouse market and retail market are "speculative," the firm said. The study also praises Glen Burnie's success in attracting discount retailers, but noted that the metropolitan region's "retail sales plummeted throughout much of 1992."

One Baltimore broker was taken slightly aback when told of the findings. "I didn't think it was that bad," said Andrew J. A. Chriss, a broker at Manekin Corp. "I can't comment, though, because I don't know how they did the study."

Mr. Chriss noted that a Boston institutional investor last year bought a Hunt Valley office building, and added that Baltimore isn't alone in having a weak standing among institutions. "I don't know if investors are picking up much anyway," he said.

The study ranked western markets as the most attractive. Top overall grades went to Oakland, Calif., Seattle, Honolulu, Portland, Ore. and Salt Lake City. Oakland scored a 90 on Ernst & Young's scale of 100, far outpacing Baltimore's 43. The healthiest eastern markets were Pittsburgh and Newark-northern New Jersey.

Carrolltowne Mall sold, to be renovated

Oh yeah? Try telling all of this to R. Dixon Harvey Jr.

Mr. Harvey is the president of Black Rock Associates, leader of a group that on Monday closed a deal to buy the Carrolltowne Mall in Eldersburg. The seller: South Charles Realty Corp., a unit of MNC Financial Inc., which foreclosed on the 320,000-square-foot mall in 1991.

"This is really a part of the ongoing correction in real estate," Mr. Harvey said. "Carrolltowne works for what we bought it."

There's the rub: The price that Black Rock and partner Carlisle Associates, which is led by local developer Francis Knott, paid for the mall was undisclosed. But it's a safe bet that it's a fraction -- probably less than a third -- of the $36.4 million owed on the center when MNC drafted the foreclosure papers in August 1991.

Mr. Harvey said the mall isn't big enough to compete head-to- head with regional malls like Owings Mills. Carrolltowne, anchored by a recently expanded Kmart store, is more of a community shopping center. The new owners of the mall, which is 90 percent leased, plan $1 million worth of renovations, including paint, signs and the like.

They also plan to add two restaurants -- one sit-down and one fast-food -- on "pad sites" in the center's parking lot. One deal is signed, but hasn't been announced because it is contingent on the tenant's securing financing. Mr. Harvey said that is in progress.

"It really is the town center for Eldersburg," Mr. Harvey said. "There's a good mix of tenants."

Office building, motel on the auction block

Investors such as Black Rock are betting that they can pick up the pieces of the real estate recession, and there seems to be an endless supply.

Atlantic Auctions Inc. will bring a 48,900-square-foot office building off U.S. 50 in Anne Arundel County to auction Monday. That auction also will include a 150-room Thr-Rift Inn.

Alex Cooper Auctioneers is set to have its own motel sale tomorrow in Grasonville, Queen Anne's County, where Key Federal Savings & Loan has forced a foreclosure auction on a 41-room motel.

Winchester Homes offers Chelsea model

In case you thought the world had run out of angles to catch the glow of the Clinton family, think again: Winchester Homes has named a new home model for Chelsea Clinton, the president's 12-year-old daughter.

It's not the White House, but it's a nice house -- a 3,000- square-foot center hall colonial with up to five bedrooms (leaving a spare for Socks) and a sun room.

Winchester is acting in the spirit of the inauguration, said Christopher Zell, vice president of marketing for the Calverton-based home builder.

But he admits that the name emerged from a bit of free associating. The company has used presidents' names for home models before, and before the inauguration Mr. Zell began tinkering with Clinton ideas. Models called the "Clinton" and the "Hillary" might come out in the future, he said.

"We could very easily imagine a family such as the Clintons buying this home," Mr. Zell joked. "It would be a lot closer and a lot cheaper than Camp David."

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