Gold Coast tarnish HarborView troubles: Singapore group's exit may accelerate Federal Hill development.

March 18, 1996

CONDOMINIUMS HAVE always had a rough time selling in the rowhouse city of Baltimore. The decision of the Singapore-based Parkway Holdings Ltd. to write down its investment in the $90-million HarborView complex in Federal Hill is the latest example.

From the day the complex opened three years ago, real estate watchers have been waiting for a foreclosure auction at HarborView, where sales have been sluggish. What they did not know, of course, was that the Parkway group had no conventional mortgage on the buildings and therefore was not subject to normal business pressures.

The group's decision now to start divorcing itself from the project was dictated by two factors: Like many other speculative Asian real estate acquisitions in the United States since the late 1980s, its stake was unprofitable. Moreover, Parkway's focus has increasingly shifted into hospitals and health-care maintenance organizations, which it now operates in Malaysia, Indonesia, Sri Lanka, England and India.

The way Richard A. Swirnow, Parkway's local partner, explains the changes, the Singapore group will retain its interest in the 27-story HarborView condominium tower on Key Highway for the time being but new investors are being sought to develop the rest of the 42-acre waterfront property.

This means that plans for the potentially lucrative site have changed. An apartment tower is still likely to be built atop an existing garage there but instead of the site having a total of six towers, lower-rise buildings are a possibility. "Our goal is to make the project a success," says Mr. Swirnow.

The adversity at HarborView represents a loss of face to the Singapore-based investors. To Baltimore, though, it may not be as bad it sounds. The Singapore principals misread the Baltimore market. They told architects to design a building according to Singapore norms. That meant relatively small units at a high price. Also, they thought that, as in Singapore, Americans would just scramble to buy condominiums.

In the long term, the prospects for the South Baltimore waterfront remain bullish. The HarborView troubles are likely to be just a temporary setback.

Pub Date: 3/18/96

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