Va. developer to buy Grey Rock projectThe Bank of...

COMMERCIAL REAL ESTATE

October 13, 1993|By Timothy J. Mullaney | Timothy J. Mullaney,STAFF WRITER

Va. developer to buy Grey Rock project

The Bank of Baltimore has made a quick turnaround of the property it was forced to foreclose upon at the Grey Rock condominium and townhouse development in Pikesville, finding a Northern Virginia developer that has agreed to buy the land.

"We are the contract purchasers. We're hoping to close around Nov. 1," said Elizabeth Bouchard, marketing director for Rocky Gorge Communities Inc. of McLean, Va., which has built projects in Potomac and in the Kentlands planned community in Gaithersburg. Neither side would disclose the purchase price for the 47-acre parcel, and the sale price is not yet public record because the deal hasn't closed.

The bank was forced to buy the project at auction Aug. 17 after developers John Dorment and Richard Carter and George McCleary defaulted on a loan they had taken out to finance development. The bank was owed $14.5 million as of last November, when the bank initiated foreclosure proceedings. But truer measure of the land's likely value was the $8.2 million the bank bid to take over the property at auction.

Ms. Bouchard said the new owners plan to downsize and redesign the Grey Rock units in hopes of kindling more consumer interest in the development.

"We're looking for designs that are compatible [with the approximately 45 homes already built] but maybe more efficient to build," Ms. Bouchard said. The townhouses will shrink from an extra-wide 32 feet to a closer-to-standard 24 feet wide, she said.

The plans for the development call for about 80 more townhouses and 110 more condominiums.

Rocky Gorge's prices for townhouses will run from about $180,000 to the low $200,000s, she said, compared with the mid-to-upper-$200,000 range under the previous plan. Condominium prices will fall to the $120,000-$150,000 range, about a $20,000 to $30,000 drop, but the condominiums will remain about the same size, she said.

Ms. Bouchard said the new development team won't open an on-site marketing center until early 1994, but hopes to begin reworking the development immediately after closing.

Orchard to be sold at auction Oct. 28

A old orchard in Washington County will go to the auctioneer's gavel Oct. 28, when A.J. Billig & Co. offers 500 acres around Smithsburg at a foreclosure sale slated for the county courthouse in Hagerstown.

"We've gotten a lot of action on it in the first week of advertising," auctioneer Daniel Billig said.

It has been a land deal that apparently went bust for the current owners, Western Commercial Funding Inc. of Oklahoma City, Okla., since the auction is a foreclosure ordered by Central Maryland Farm Credit Bank ACA. Farm Credit attorney Andrea Mattei couldn't be reached for comment.

The vision is that single-family homes will sprout where peaches and apples once grew. The land, which will be offered in eight parcels, is zoned agricultural and conservation. But Lisa Kelly Pietro, associate county land use planner, said county zoning laws allow light-density housing in both zones.

The conservation zone allows various uses including golf courses, wildlife preserves -- even sawmills -- as well as houses on 3-acre lots, she said. The agriculture zone allows low-density housing, schools, hospitals, small retail shops such as convenience stores and agriculture-related uses such as farm equipment dealers, she said.

"Most of the people are buying [old farms] for single-family housing. There are several orchards that have been up for sale."

But Robert Lefenfeld, an analyst of the new home market for Legg Mason Realty Group, said the Washington County market has not been active enough to attract strong interest from major metropolitan builders.

"That was going to be the exurban market for Frederick County," he said. "That was before the recession."

Bavar Group buys Hunt Valley building

The new real estate investment company of longtime local broker/developer David Bavar made its first move yesterday, buying the 38,000-square-foot Hunt Valley Professional Building at auction for $1.24 million.

Mr. Bavar formed Bavar Properties Group in March after leaving the downtown commercial brokerage firm of KLNB Inc., which has since moved to Towson. The new company hopes to exploit the fall of the real estate market by buying assets at low post-recession prices, betting that even a modest upturn makes sharply discounted projects successful.

"There's no question about it," Mr. Bavar said after buying the building, which was put up for auction by the Federal Deposit Insurance Corp. An FDIC attorney refused to say how much the '' former owners, a partnership managed by the Rouse Co., which held only a small stake in the group, owed on the half-vacant building. But the $222,000 annual interest tab indicates a loan of more than $2 million, Mr. Bavar said.

"I'll be able to rent that space for less than certainly a lot of the larger office buildings in that area," Mr. Bavar said.

The building is at the corner of Schilling Road and York Road. Its biggest tenant is AAI Corp., which is in negotiations to renew its current month-to-month lease, but its most visible tenant is the Hunt Valley Szechuan restaurant, which is negotiating an extension of a lease that expires this month.

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