Home construction in area shows gainsThe market for new...

COMMERCIAL REAL ESTATE

February 17, 1993|By Timothy J. Mullaney

Home construction in area shows gains

The market for new homes continues to give hope to economics wonks who watch such indicators. The Baltimore Metropolitan Council's year-end statistics show that December home construction was up 59 percent over December 1991 and 104.4 percent over December 1990.

"While 1992 reflects an improvement over 1991 year-end figures, JTC not all of the growth can be attributed to economic confidence and recovery," the council's report said. "In June there was a regional permit surge as well as a [specific] surge in Howard County, with both being attributed to new laws going into effect July 1."

A new state law requires builders to install sprinkler systems for apartments, condominiums and town homes. The council said many builders obtained permits before the law took effect, to beat the requirement. A Howard County ordinance established an excise tax on new development that caused permit spurts in June and December, the council said.

Still, the December numbers reverse some recent slippage that had raised concerns about the strength of the housing recovery. The residential numbers, for example, were below the average for December starts between 1981 and 1990, the council said.

Commercial construction is still slow, slower and slowest, depending on the sector. Measured by the value of the buildings that received permits, December permits were down 29 percent from last year and 64 percent from 1990. The $15 million value of the permitted projects was less than half the 1981-1990 average for December.

RTC auctions short on local properties

The Resolution Trust Corp.'s next wave of Baltimore-Washington-area auctions, scheduled for next month, will be a little short on local interest. With two auctions scheduled for Northern Virginia and a third for College Park, the federal thrift regulators have few Baltimore-area goodies in their bag.

The Virginia auctions March 15 and 16 have no Maryland properties. Most of the properties on the block are in Virginia, with a handful in West Virginia and in Washington.

Even in College Park on March 18, the local pickings are slim.

Only one city commercial building is up for auction -- the old Augusta Federal S&L building, at 420 N. Howard St. Federal regulators took control of Augusta Federal in 1991.

The only other local commercial address on the list: a 4,950-square-foot retail complex, at 207-209 Wise Ave. in Baltimore County.

The biggest Maryland commercial properties on the block will include a group of 14 miniwarehouse units on Hudson Street in Annapolis, according to a list released by the auctioneers, Florida-based Fisher Auction Co., Inc. Another highlight: a 26-acre parcel of commercially zoned land on Route 50 in Queenstown -- property that used to be a nursery.

Fisher Auction's chief executive, Louis B. Fisher III, said there will be another RTC auction in the area over the summer, and it might include more Baltimore-area properties.

"These are the properties we presently have that do not have any contingencies surrounding them," he said, referring to the Virginia and College Park auctions. "An example would be that we might have a property in Baltimore that has some property title problems . . . or a tenant that hasn't gone through the eviction process."

Md.'s effort to buy 6 St. Paul Centre slows

Maryland's effort to quickly close the $12.2 million deal to buy the 305,000-square-foot 6 St. Paul Centre has been delayed, officials at the state Department of General Services said.

The hang-up is getting a letter from state Sen. Laurence Levitan and Del. Howard P. Rawlings, the Democrats who head the General Assembly spending committees in the Senate and House of Delegates. Legislation authorizing the state to buy office space -- a bid to limit rentals -- required that specific deals be approved by the pair before being submitted to the state Board of Public Works.

Department spokesman Dave Humphrey said that letter hasn't arrived. Legislators toured the building Monday, he said. The deal will not be forwarded to the Board of Public Works until at least next week, meaning that there will be no approval for at least two weeks.

Still no word on what building the state will buy next, as it proceeds with a plan to buy as much as 600,000 square feet of space. Front-runners are said to be the Shillman Building, at 500 N. Calvert St., and the Munsey Building, at 7 N. Calvert St.

City sheds distinction as worst market

Remember reading in this column recently about a report that called Baltimore the worst of 24 regional real estate markets in terms of investment outlook? Well, we're happy to report that the problem has been solved -- even if the solution is a matter of improving a definition rather than improving the local economy.

An updated version of the Ernst & Young study shows Baltimore near the top in investment prospects. The catch: Baltimore is now rolled into the "Washington-Baltimore" area, to conform with the Census Bureau's revised metropolitan definition.

Still, accompanying comments on most categories of investment, from offices to warehouses to apartments, note that prospects for the Baltimore "submarket" are weaker than for the rest of the Washington-Baltimore area.

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