Real Estate

Baltimore Comptroller Joan M. Pratt is hiring her campaign manager and former investment partner in a string of rental properties to run the city's real estate office.Julius Henson, a rising political strategist who was the architect of Ms. Pratt's victory to the city's third-highest elected position, is to start this week.As real estate officer, Mr. Henson will oversee the city's portfolio of 350 buildings valued at $3.2 billion. He will report directly to Ms. Pratt and will be paid $79,900 under a one-year contract up for approval tomorrow by the Board of Estimates.

A LITTLE noticed special provision in pending tax and budget legislation would restore tax breaks for real estate that were repealed in the bipartisan 1986 Tax Reform Act.Before 1986, there was a brisk market in paper real-estate tax losses. A developer could put little of his own money into a building, falsely claim the property was losing value over time ("accelerated depreciation") even though it was actually appreciating -- and then sell the paper losses to wealthy absentee investors in exchange for cash.

Now that life insurer First Executive is a basket case, having filed for Chapter 11 bankruptcy reorganization, what are the next insurance nightmares that short-sellers are dreaming up? I checked with a short who specializes in financial scams -- he had been screaming for years that First Exec was headed for trouble because of its junk-bond holdings and his message is: "Junk bonds are going to seem like Sunday School compared with commercial real estate."This short, who doesn't want to be identified, isn't the only one talking about a looming commercial real-estate debacle in the insurance industry.

THE DUBIOUS honor of officially declaring the economy in recession used to belong to the National Bureau of Economic Research, a venerable, official-sounding private institute based in Cambridge, Mass. NBER's arbitrary definition two consecutive quarters of decline in economic output had the virtue of being precise and intuitively approriate.By that test, we are not quite in recession yet. But last Tuesday, the upstart National Association of Business Economists jumped the gun and declared a recession on the basis of a far softer, but more contemporary, indicator a poll!

MANY interesting and alarming things have happened to the economy in the last 15 years. But we haven't had a good old-fashioned commercial real-estate crash, the kind that had bank regulators popping Pepcid while half-finished office buildings languished for months or years. Are we paving the way for one now? Commercial real estate valuations are coming on strong even as rents and occupancies in many markets are only so-so. Of more than 200 Maryland-based mutual funds, six of the top 10-best performing in the second quarter were real estate funds, according The Sun's quarterly survey.

NEW YORK - Twenty years ago, when I was a banker," recalled David Csontos, a managing director at Insignia/ESG, "real estate was a bad sector. Everybody was scrambling to get out." Now - in New Jersey, at least - said Csontos, who specializes in advising those thinking of investing in commercial real estate, it is the opposite. Investors are elbowing each other to get in. With the rate of return on stock market investment somewhere between rotten and "recovering," and bonds generating 3 percent to 5 percent, commercial real estate has taken on luster as a stable, advantageous investment, according to people in the field.

Two side-by-side townhouses that were once home to former Gov. William Donald Schaefer and his longtime companion, Hilda Mae Snoops, go on sale Thursday in Pasadena's Chestnut Hill Cove community. Schaefer has donated both properties to the Baltimore Community Foundation, which hopes to sell them and use the proceeds to help endow the William Donald Schaefer Civic Fund, the foundation announced Wednesday. The fund, created a year ago with Schaefer's leftover campaign funds, supports a program that awards neighborhood grants.

Home sales and prices in metropolitan Baltimore continued to slide in March, statistics released Friday showed, though the decline was not as sharp as in recent months. Sales in Baltimore and the five surrounding counties fell more than 18 percent last month, with 1,545 homes changing hands. Home values dipped nearly 6.5 percent compared with a year earlier, to an average sales price of $278,511, according to Rockville-based real estate listing service Metropolitan Regional Information Systems Inc. Sales in the Baltimore area have been down on a monthly basis by more than 30 percent in eight of the past 14 months, including by 31 percent in February.

Patrick James Rhodes Sr., a retired real estate agent and an avid golfer, died of congestive heart failure March 1 at his Annapolis home. He was 82. Mr. Rhodes was born and raised in Washington and was a 1944 graduate of St. John's College High School. After serving in the Marine Corps during the waning days of World War II, Mr. Rhodes attended the University of Maryland, College Park. He earned his real estate license and worked for Eugene Fry Co. in Bethesda, and later with the Roger H. Spencer Co. in Rockville.

A former Morgan Stanley vice president, who was working on the Wall Street firm's deal to buy Town and Country Trust, and her husband secretly began buying shares of the Baltimore apartment complex owner shortly after financing for the acquisition was approved, according to federal prosecutors. The couple allegedly funneled the shares into an account set up in the name of the vice president's mother, a resident of China, and sold them two months later for more than a $21,000 profit. That was the first of three alleged illegal trading schemes outlined in a complaint filed this week in federal court in New York after investigations by the Securities and Exchange Commission and the FBI. Adhering to a pattern of deliberate deception that lasted from the end of 2005 to January of this year, the former Morgan Stanley executive, Jennifer Wang, and her spouse, Rubin Chen, netted more than $600,000 by trading on confidential information that Wang was privy to, the complaint alleged.

COPT earnings show 6% increase in net income Office developer Corporate Office Properties Trust said Wednesday its third-quarter net income rose 6 percent to $10.4 million, or 18 cents per diluted share, from $8.2 million, or 17 cents per diluted share, in the third quarter of 2008. The Columbia-based real estate investment trust reported a 3 percent decrease in diluted funds from operations per share to 60 cents per share from 62 cents per share for the quarter ended Sept. 30. Funds from operations rose 7 percent to $42.4 million, from $39.5 million in the same period last year.

Erickson Retirement Communities, a pioneering senior-living developer founded 26 years ago with the opening of Charlestown in Catonsville, filed for federal bankruptcy-law protection Monday with a plan to restructure more than $1 billion in debt and sell the struggling company to a local investment firm. Erickson said the Chapter 11 filing was necessary to restructure debt, split the core management and real estate businesses into separate entities, and pave the way for a sale. Erickson, which has 23,000 residents in communities around the U.S., said it was being purchased for an undisclosed amount by Redwood Capital Investments LLC. That company is controlled by Jim Davis, who is the majority owner of the $5 billion, Hanover-based staffing firm Allegis Group; he could not be reached for comment Monday.

A man who built an empire on the idea of living large in retirement is having to scale back a bit himself. John Erickson, whose Erickson Retirement Communities operates 19 communities in 11 states, will try to unload his Inner Harbor corporate penthouse in an auction Saturday. Bids for Harborview's Penthouse 4A begin at $950,000. List price for the 3BR, 3.5BA, 3,922-square-foot waterfront condo was $4.6 million when Erickson first put it up for sale a year ago. "The goal of the sale is to support Erickson's ongoing efforts to maintain and enhance liquidity," said Mel Tansill, an Erickson spokesman.

Homebuyers - many staring down a deadline to get the $8,000 tax credit for first-time purchasers - signed about 30 percent more contracts in the Baltimore metro area last month than they did a year ago. That's by far the biggest increase all year, according to numbers released Friday by Metropolitan Regional Information Systems Inc., a Rockville company that runs the region's multiple-listing service. It's also the most contracts signed in the month of September - 2,662 - since 2006. These pending deals don't count as home sales until they close.

Jonathan C. "Heimi" Heimert, a real estate appraiser who earlier had been a resort cook, ended his life Sept. 21. The Morrell Park resident was 49. Born in Baltimore and raised in Towson, Mr. Heimert was a 1977 graduate of Calvert Hall College High School. He earned a bachelor's degree in 1982 from the University of Maryland, College Park. Mr. Heimert began working during high school and later in college as a prep cook and line cook at the old Shane's Restaurant in Timonium. After graduating from college, he was recruited to be a sous chef at the Maryland Club.

Bernard Manekin, whose commercial real estate firm that he owned and operated with his brother for more than 50 years succeeded in transforming Baltimore's skyline and self-image, died Saturday in his sleep at his home in the St. James condominiums on North Charles Street. The longtime Northwest Baltimore resident was 95. "He was one of the original visionaries who made our Charles Center and ultimately the Inner Harbor a success. If he hadn't been able to lease One Charles Center in a poor economic climate, the whole project might have died right there," said Martin L. Millspaugh Jr., who was the first chief executive of Charles Center-Inner Harbor Management Inc., which oversaw the development in the 1960s of the harbor and what became Charles Center.

The first home Mette Ramanathan and her husband considered buying was a 2,200-square-foot, five-bedroom place. It was too big for the couple, who were interested in space efficiency and lower utility costs. So they settled on a considerably smaller three-bedroom Cape Cod in Baltimore's Hamilton neighborhood. The larger house was "not only expensive but you're using and wasting an awful lot of space," said Ramanathan, who moved in May. "Even if we start a family, we don't need five bedrooms to start a family."

No community has proved immune to the housing slump, least of all expensive places. But they're still expensive. The 10 priciest ZIP codes in the Baltimore metro area all had averages above $500,000 during the first half of the year, topping off at nearly $845,000 in Howard County's Glenwood community. Baltimore's Homeland, with its six lakes and historic homes, was the most expensive neighborhood in the city and also had average sale prices above half a million. What many of the suburban communities have in common are big homes with super-sized yards.

Jos. A. Bank Clothiers was forced to pull back aggressive expansion plans when the economy tanked and developers stopped building the open-air shopping centers where the men's retailer tended to locate. But the Hampstead-based clothing chain said Tuesday it was increasing the number of stores it plans to open in fiscal year 2010 as it takes advantage of real estate that has opened up as other retailers have closed stores. The company now hopes to open 30 to 40 stores, an increase from the 10 to 15 it initially planned for next year.

The MacDonalds' Glen Burnie house sold four days after they listed it with an agent. And the Baltimore home the couple moved into? They had to outbid another buyer for it. Not in the bubble days. This year. Falling prices and the $8,000 tax credit for new homeowners are tempting buyers back into the fray, in what could be the early signs of a turnaround for a housing market that's been declining since late 2005. In a third of the metro area's city neighborhoods and suburban communities, more homes changed hands in the first half of the year than during the same months last year, according to a Baltimore Sun analysis.