Sparks offices bring $181 a sq. foot

Price of new mid-rise believed a record for suburban site

March 13, 2004|By Jamie Smith Hopkins | Jamie Smith Hopkins,SUN STAFF

It doesn't matter how weak the office market is if you've got the right office.

A new Class A building in Sparks sold for $181 a square foot this week, which brokers believe is a record price for a sizable property in Baltimore County - and unusually high for any suburban mid-rise.

A key inducement: It's fully leased by one company for the next 10 years.

Highland Partners LLC, which developed the 210,000- square-foot building on a 25-acre parcel, sold it for $38 million to the California commercial real estate investment firm BentleyForbes.

Preston Partners Inc. in Lutherville brokered the deal for the building at 940 Ridgebrook Road.

"$181 is a huge price in this market," said Bill Whitty, senior vice president and principal of MacKenzie Cushman & Wakefield Alliance in Lutherville, another commercial real estate firm. "That's the highest I've ever heard."

David P. Scheffenacker Jr., president of Preston Partners, attributes the price to the building itself - it was recently finished - and the decade of guaranteed rents. PHH Arval, a vehicle management services company, moved in after leaving its slightly smaller Hunt Valley headquarters.

"This is a huge building that is the outer edge of the northern Baltimore market, which is exciting," added Cris Abramson, an associate at Preston Partners, one of the brokers who worked on the deal.

There's an upside and a downside to having a building filled by one tenant as this one is, Whitty noted. No partial vacancies will crop up while PHH is there - "but when they leave, you get a whole building back," he said.

The Baltimore regional office market is posting vacancies of nearly 14 percent.

But while there's subdued interest in renting, there are plenty of investors looking to buy, said J. William Miller, senior vice president at the commercial real estate firm of NAI KLNB.

"There's a lot of money out there with not only pension funds [but] REITs chasing too little product, and here you've got a single tenant, a very good credit tenant," Miller said. "I would think there would be people lined up to buy that in today's market."

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