Constellation president to streamline companyRandall M...

COMMERCIAL REAL ESTATE

July 14, 1993|By Timothy J. Mullaney | Timothy J. Mullaney,Staff Writer

Constellation president to streamline company

Randall M. Griffin, the new president of Constellation Real Estate Group Inc., plans to begin streamlining the real estate unit of Baltimore Gas and Electric Co. over the next few months.

The menu is likely to include repositioning some of Constellation's shopping centers and crafting swaps or rezonings to reduce its $230 million stash of undeveloped land.

Mr. Griffin, the former EuroDisney development executive who joined Columbia-based Constellation last month, says his mandate is to boost operating income.

But he won't directly say whether that means a change of direction for Constellation, whose 1980s strategy had been based on developing assets and packaging them for quick resale.

That strategy foundered because real estate values plummeted during the recession. Since 1991, the company has focused on increasing occupancy rates among its office buildings, business parks and mostly strip-style shopping centers.

Mr. Griffin says the occupancy rate, only 58 percent in late 1991, is now more than 90 percent and will reach 95 percent by year's end. But that brings only stability, not the income, liquidity and growth company directors want, he adds.

He says Constellation will make selected asset sales, but moving its roughly 2,000 acres of land is going to be tough.

One strategy: to swap land with other investors in tax-free exchanges. Offering such tax breaks as part of a deal limits the discount Constellation would have to take by selling in tough times. Another strategy is to rezone business parkland for better-performing sectors such as housing and retail.

One move came Friday, with the news that Constellation's Wilmington, Del. shopping center, First State Plaza, had signed its first clothing store tenant. That's part of a shift to higher-grossing soft-goods stores from tenants with less growth potential.

State ready to occupy new office building

State officials said yesterday that the Maryland Public Service Commission and the Office of the People's Counsel will be the first agencies to move into the taxpayers' new office building at 6 St. Paul St.

Both agencies, now at 231 E. Baltimore St., will move this month. The Public Service Commission regulates utilities; the People's Counsel represents consumer interests in utility rate cases.

Martin W. Walsh, secretary of the Department of General Services, says the department recently issued a request for proposals to finish the interior of the building. Most of the building has been vacant since it opened in 1985.

DGS spokesman David Humphrey said the Department of Juvenile Services, which the state had said would be the first tenant at the new site, chose to delay its move until next year.

Shattuck will lead marine center project

Alex. Brown Inc. President Mayo Shattuck yesterday was named chairman of Columbus Center Development Inc., the nonprofit company coordinating development of the $160 million Columbus Center marine research and exhibition facility in the Inner Harbor.

The center hopes Mr. Shattuck, best known as an investment banker to high-technology companies, will help the center become a focus of science-related economic development.

Mr. Shattuck, whose appointment is effective immediately, replaces Osborne A. Payne, chairman since last September.

D.C. leads Baltimore in filling office space

As Baltimore's office market stabilizes with vacancy rates still distressingly high, Smithy Braedon Co. says that the city's Consolidated Metropolitan Statistical Area mate is doing better.

"It appears the real estate market is under control in our region," said James L. Eichberg, vice chairman of Smithy Braedon, in a letter covering the firm's midyear study of the Washington-area office market. "It is clear, however, the declining number of jobs and its relationship to growth, or no growth, will be the key for the next several quarters."

Suburban Maryland's vacancy rate is holding at 15.9 percent, the best since 1989. Major leases to the U.S. Food and Drug Administration and Department of Energy should help the vacancy rate fall by year's end.

The firm says landlords are confident enough to try to hoard and consolidate available space into blocks big enough to attract major tenants. The losers are small tenants who want Class A space. Some landlords won't break up bigger blocks to accommodate them, the report said.

Michelin is mum on plans to move

A decision is near on whether Michelin Corp. will move a major warehouse operation to Harford County from Howard County.

Brokers familiar with the deal say the French tire maker was supposed to notify its landlord by July 2 about whether it would stay at Meadowridge Business Center in Elkridge. The broker for the building, Matt Ryan of Casey & Associates, declined to say whether the notice arrived.

A spokeswoman for Michelin says the company will have an announcement soon.

If Michelin moves, it is expected to go to the 252,000-square-foot former Pier One Imports building in the Riverside Business Center in Belcamp.

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