80 acres in Sparks sold for offices

Local developers buy 2 commercial parcels from bankrupt IHS

April 02, 2002|By Meredith Cohn | Meredith Cohn,SUN STAFF

Nearly 80 acres that were part of the Sparks campus of the bankrupt Integrated Health Services Inc. have been sold to two local developers who plan to build offices. The parcels are among the last available in northern Baltimore County that are zoned for commercial development and have infrastructure in place.

While demand for office space is unclear given the economic downturn, the buyers are optimistic that local or out-of-town companies will want to locate new headquarters or expand on the site.

"We've been aware of that site for the last couple of years," said Joseph V. Maranto, a principal with Timonium-based Cignal Corp., one of the buyers. "We had an opportunity to look at this facility and we were impressed by the location and corporate atmosphere and thought it would be easy to attract a high-quality tenant in that location."

Cignal, through an affiliate, paid $1.775 million for about 24 acres, according to public land records.

The company tentatively plans to build three four-story office buildings on the 10 acres of usable land, depending on the user's needs, Maranto said. The remainder of the parcel is wooded or designated open space.

The other buyer is Partners Management Co., a Towson-based real estate investment company owned by members of the Knott family. Through an affiliate, the group paid $4.85 million for about 54 acres, of which 36 acres are usable, records show.

Both companies have spent much of their efforts building multifamily housing in the Maryland suburbs, although both have also developed and invested in commercial real estate. The companies plan to seek tenants before breaking ground.

While Partners Management did not want to disclose a detailed plan for its parcel, Edgie Russell, president of the company, said there is room for several office buildings. He would not speculate on a timeline for development.

"I think the market is soft, but this was an opportunity to buy the property at the right price," he said. "And the unique character of the property gives us competitive advantage."

Russell pointed to the site's proximity to Interstate 83 and said strict development covenants should help maintain the aesthetic character of the area.

The land was owned by Integrated Health Services, which will maintain its three headquarters buildings and 70 acres at the site, called Highlands Corporate Office Park.

IHS, which filed for Chapter 11 bankruptcy reorganization in 2000, had always intended to sell the excess land, according to Christopher C. Smith, chief executive of TriAlliance Commercial Real Estate Services LLC and the seller's broker. He's also Cignal's leasing agent.

IHS bought the land in 1997 for $6.2 million, or about $425,000 below the $6.625 million price it just got for the two parcels. The bankruptcy court has approved sale of land, which was on the market for two years. Both sales closed in March.

Smith said there is other office space available in the Sparks-Hunt Valley area of the county, but little land that can be used to build new offices. He said most county developers were interested in the sites at some point.

"There are several opportunities in Sparks-Hunt Valley. Tenants can find existing space or new space under construction," he said. "This is one of the last improved office campus sites available in northern Baltimore County. ... The developers saw future potential on their own turf."

The Sparks-Hunt Valley area has an 8.27 percent vacancy among existing top-tier office buildings and those under development. That compares with 10.19 percent for the Baltimore metropolitan region, according to CoStar Group, a real estate information provider.

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