Real estate boom unlikely at White OakfTCThe Navy may be...


June 30, 1993|By Timothy J. Mullaney | Timothy J. Mullaney,Staff Writer

Real estate boom unlikely at White Oak


The Navy may be moving an estimated 3,800 people to White Oak from Crystal City, Va., but don't expect any immediate real estate boom in the area around the Naval Surface Warfare Center, a spokeswoman for the Montgomery County installation said yesterday.

On Sunday, the Defense Base Closure and Realignment Commission recommended moving much of the Naval Sea Systems Command to White Oak from leased space in Northern Virginia as part of a much larger effort to restructure and shrink the military now that the Cold War is over. But, initially at least, the Navy thinks there is enough space at the White Oak center to handle the influx.

"We have 750 acres here," said Diane Palermo, a spokeswoman at White Oak, which is just west of the Prince George's County line. She said the 1991 round of base consolidations cut employment at the base to about 1,500, from 2,000 a couple of years back; a decade ago it was about 3,000. In addition, the latest round of cuts are set to move an additional 650 White Oak-based Navy employees out of the immediate area.

Ms. Palermo said the shift will bring the potential for a lot of work for renovation contractors, however. Most of the existing space needs light renovation, and some laboratory space needs more intensive work. She said the Navy might build one extra building on the campus.

She also said contractors who do business with the Sea Systems Command will be likely to migrate to locations near White Oak. Many military contracts require that outside vendors open offices near the bases they serve so the contractors can be constantly on call, she said.

If that shift does occur, it would give a boost to what is already one of the stronger suburban office markets in the nation. Montgomery County's vacancy rate is 15.3 percent, according to a recent report by Spaulding & Slye, a brokerage active in Washington, compared with 18.1 percent in the Baltimore metropolitan area and nearly 21 percent in Prince George's County.

"The whole market seems to be tightening up," said Neil Simon, executive vice president of Carey Winston Co., a Chevy Chase-based brokerage firm. "There are no cranes in the air and there's no financing" to build new buildings, he said.

Russians get seminar on office buildings

Speaking of the end of the Cold War, the Russian government is looking for better ways to spend its money as well. Like, for example, on office buildings.

MacKenzie/O'Conor Piper & Flynn Commercial Real Estate Services were hosts for two members of the Supreme Soviet of the Russian Federation yesterday for a whirlwind seminar on how todevelop office buildings. The meeting was part of a longer national tour by a Russian parliamentary delegation to study capitalism.

"Our government, our Parliament, has chosen a market economy for our country, and I think it's a good way to go," said Vera I. Kotelnikova, assistant to the deputy chairman of the Supreme Soviet. "The advantages of a market economy are self-evident. All you have to do is look around," she said, gesturing toward the buildings of McDonogh Crossroads, the Owings Mills office park developed by MacKenzie/O'Conor Chairman Clark MacKenzie.

Ms. Kotelnikova said the Russian government wants to encourage development that includes Russian and foreign investors, so local business people don't get shut out because of shortages of capital and development experience.

Clinton budget plan will help, Cardin says

The Clinton administration's tax and budget package will be good for the real estate industry, Rep. Benjamin L. Cardin told a seminar sponsored by the law firm of Miles & Stockbridge Monday.

"It will have a significant impact on stabilizing and lowering interest rates," the 3rd District Democrat said. "For real estate, low interest rates are very important."

Mr. Cardin also said the Clinton plan will roll back some of the restrictions on commercial real estate investors' deducting passive losses from their real estate investments against other income. The 1986 tax reform package eliminated passive loss deductions enacted in President Ronald Reagan's 1981 tax package, making real estate much less attractive as a tax shelter.

Mr. Cardin, a member of the House Ways and Means Committee, said this year's passive loss deductibility proposal is more liberal than current law but not as generous as the 1981 act.

Rouse gets full control of Owings Mills mall

The Rouse Co. yesterday gained full ownership of the Owings Mills Town Center mall. The Columbia-based developer bought out the 50 percent share of Chicago-based JMB Realty. Terms weren't disclosed.

"We typically try to buy out our partners in any of our projects when it appears advantageous," said David L. Tripp, Rouse's director of investor relations. The company had said earlier this year that it was out to buy more real estate, either raising its stake in malls it already partly owns or buying out new ones, and had sold public debt and preferred stock to raise money for the deals, Mr. Tripp said.

Rouse had earlier bought out JMB's stake in the White Marsh Mall.

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