COPT to acquire Nottingham

Developer of White Marsh into town center agrees to $362.5 million cash and stock deal

December 28, 2006|By Lorraine Mirabella | Lorraine Mirabella,Sun reporter

Nottingham Properties Inc., the family-owned developer that over four decades transformed White Marsh from sand and gravel pits into a thriving town center, has agreed to be acquired by Maryland's biggest suburban landlord, Corporate Office Properties Trust.

For Columbia-based COPT, which has grown rapidly by building and leasing offices to defense-related tenants, the $362.5 million deal will put it in better position to benefit from the military base restructuring that is expected to shift tens of thousands of jobs to the Interstate 95 corridor around the Aberdeen Proving Ground and Fort Meade.

Towson-based Nottingham's holdings include 55 properties and 187 acres of land, the bulk of it in White Marsh, just off I-95 in northeastern Baltimore County.

The planned cash and stock transaction, which is expected to close next month, would make COPT the biggest owner of office buildings in White Marsh; increase its critical mass of holdings in Columbia, Hunt Valley and around Baltimore-Washington International Thurgood Marshall Airport; and give it land for an additional 2 million square feet of office development in White Marsh and other markets.

COPT owns 185 office properties totaling 15.4 million square feet. It counts many government agencies and defense contractors among its tenants. The developer closed in October on a $5 million purchase of the former Fort Ritchie Army base, where it plans to build a mixed-use development that could bring 4,500 jobs to Western Maryland in 10 to 15 years.

In July, COPT announced a major expansion of its 285-acre National Business Park in Annapolis Junction in Anne Arundel County to meet growing demand for office space stemming from the base restructuring. It paid $26.6 million for a 178-acre parcel that could eventually accommodate about 6,000 workers in seven or eight office buildings.

The Nottingham acquisitions will add 2.4 million square feet to COPT's portfolio, including 1.6 million square feet in 36 buildings in White Marsh.

COPT announced the deal in a filing with the Securities and Exchange Commission yesterday.

It was unclear from the filing whether the deal will include any of Nottingham's shopping centers. Nottingham completed Nottingham Square, one of the region's first "big box" discount centers, in 1994, bringing in a Target, Lowe's Home Center and Best Buy. Then in 1997, it opened The Avenue at White Marsh, a Main Street-style shopping strip across from White Marsh Mall that was replicated nationally.

Neither J. Joseph Credit, Nottingham's president and chief executive, nor Randall M. Griffin, COPT president and chief executive, returned calls for comment.

In its filing yesterday, COPT said it plans to retain some members of Nottingham's property management team.

"These are two great companies; both are very well managed and both have done a great job in area development," Aris Melissaratos, secretary of Maryland's Department of Business and Economic Development, said yesterday.

The acquisition fits a consolidation trend in commercial real estate, said Robert F. Freeze Jr., president of Timonium-based Commercial Real Estate Investments, which handles commercial investment sales.

"A lot of family-owned and controlled real estate are in a lot of cases getting to the point where they realize the best course of action is to sell out to big publicly traded companies. There's a lot of money chasing real estate like this, so it's an excellent time to sell," Freeze said. "What you're going to see is more consolidation in the real estate business like this."

David S. Iannucci, executive director of Baltimore County's Department of Economic Development, said in an e-mail that the county would benefit from COPT's increased presence. The company's new development agreement with the University of Maryland, Baltimore County's research and technology park to build and own a $22 million, 110,000-square-foot building aimed at the technology market, has already proved successful, Iannucci said.

"We expect to see similar new energy in White Marsh, given the great potential of White Marsh as a location for defense contractors working with Aberdeen Proving Ground," he said.

Nottingham saw potential in White Marsh more than three decades ago, when the company owned what was then 2,000 acres of sand and gravel pits from a mining operation run for decades by Harry T. Campbell and Sons.

County officials had targeted White Marsh as a potential area for high-density growth by the late 1960s. So Nottingham, principally owned by the Campbell family, began actively developing the land.

Campbell family member R. MacLean Campbell and P. Douglas Dollenberg, who retired as Nottingham's chief executive two years ago, petitioned for zoning changes and worked to get roads and other infrastructure built during the 1970s.

Then-County Executive Donald P. Hutchinson has said that the property was attractive as a future employment and residential growth center because it was owned by a single entity.

Nottingham became master developer of the $1 billion, master-planned White Marsh Town Center. In the late 1970s, some of the first homes sprouted on land Nottingham developed and sold to builders. By 1982, the first office buildings opened.

The mixed-use community, designated a county growth area in 1983, is now one of the fastest-growing areas of Baltimore County, with more than 3.8 million square feet of business development in the past decade. It has drawn financial, insurance and health care employers, light manufacturing, technology and distribution, all anchored by White Marsh Mall and The Avenue.

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