Theft kills deal for Charles tower Unrelated incident prompts investors to call off purchase

August 21, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Although there have been a spate of recent office building transactions downtown thus far in 1996, a sale involving the One Charles Center office tower won't be happening anytime soon.

That's because the New York investment group that had planned to take the 22-story office building off owner Metropolitan Life Insurance Co.'s hands for $6 million has backed off, after an attorney tangentially involved with the group absconded with millions of dollars of his clients' money.

"It had nothing to do with the Baltimore market or the building," said Matthew Schnurr, a CB Commercial Real Estate Group director in New Jersey who was representing the buyers.

"Everyone in New York realizes that Baltimore is turning the corner and that now is a unique opportunity to buy there. The problem was some of the partners were involved with this guy in other deals and as a result decided to put the brakes on any future investment."

A One Charles sale would have represented the third major office tower to trade hands downtown in as many months, after sales of the 12-story Candler Building and the 25-story Blaustein Building.

With a precipitous drop in values downtown and a perception that the city is beginning to regain lost business, entrepreneurial investors have begun to explore purchasing even older skyscrapers where the price is right.

In the case of Candler, for instance, the Meridian Group Inc. picked up the 111 Market Place building for about a third of the $62 million that General Electric Pension Trust had sunk into it in the past decade.

And while the 550,000-square-foot building -- one of downtown's largest -- is only 68 percent occupied, the Washington investment firm believes its relatively low cost will allow it to compete effectively in landing new tenants.

The same thinking went into BGK Equities' decision to acquire Blaustein for $9.5 million, a building that together with One Charles represented the centerpieces of downtown's massive Charles Center redevelopment project in the early 1960s.

But with Allmonie Holding Inc.'s decision to back out of the One Charles Center deal, Metropolitan Life will have to wait to unload the Ludwig Mies van der Rohe-designed tower at 100 N. Charles St. The $179 billion insurance conglomerate had taken control of the 318,000-square-foot tower for $11.5 million at a foreclosure auction in August 1993, and has since attempted to sell the building to private investors and the state.

"We're actively marketing the building," said Catherine Peters, a MetLife spokeswoman. "And as soon as we get an offer that suits us, we'll sell it."

Like many older downtown properties, however, One Charles' value has been depressed. Two years ago, MetLife was asking $15 million for the building. Six years ago, its mortgage investment totaled $25 million, city records show.

Pub Date: 8/21/96

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