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Armada Hoffler Properties and Beatty Development Group Break Ground on $65M Mixed-Use Project at 3200 St. Paul

30 Mar 2015, 1:44 pm

By Adrian Maties, Associate Editor

On Thursday, March 26, representatives from Johns Hopkins University, Armada Hoffler Properties, and Beatty Development Group were present in Charles Village to celebrate the official groundbreaking for a new mixed-use development at 3200 St. Paul. The project, currently referred to as 3200 St. Paul, will be officially named in the coming months.

Johns Hopkins purchased the 1.13-acre site in 2009, and is now leasing it to the development team of Armada Hoffler Properties Inc. and Beatty Development Group LLC. The two developers will own and operate the building.

Plans call for the construction of a 12-story structure, with  327,484 square feet of space. It will feature 157 market-rate student hosing apartments and more than 31,000 square feet of commercial space, including restaurants, retailers, and services. The building will wrap around a parking structure with 162 spaces. Birmingham, Alabama-based Capstone On-Campus Management will manage the apartments.

At the groundbreaking ceremony, representatives from Armada Hoffler and Beatty Development announced that CVS Pharmacy will be the mixed-use project’s anchor tenant. The pharmacy will occupy 10,500 square feet of space on the southeast corner of the building.

Tony Nero, president of development for Armada Hoffler Properties, told us in an interview, last October, that the total cost of the project is approximately $65 million. He added that the new building will include study lounges, high speed internet and a fitness center, and that rents will be comparable to Johns Hopkins University’s on-campus housing. The units will be marketed towards juniors and seniors.

The project is expected to be completed in August 2016. Students will be able to move in before the start of the 2016-17 academic year.

Photo credit: Armada Hoffler Properties/Design Collective/JHU

Bozzuto Sells Baltimore’s Union Wharf Apartment Asset

30 Mar 2015, 1:40 pm

By Adrian Maties, Associate Editor

The Bozzuto Group has sold its Union Wharf apartment asset in Fells Point. The property was picked up less than six months after it was put on the market.

Thomas Bozzuto, CEO of the Bozzuto Group, confirmed the sale for the Baltimore Business Journal. Because of a confidentiality agreement, he did not disclose the name of the buyer or the sale price. However, the Business Journal reported on March 25 that the new owner of Union Wharf is I&G Direct Real Estate LP. The firm purchased the apartment complex in a transaction which closed on March 19.

Work on the $72 million mixed-use waterfront community started in December, 2011. Union Wharf opened in mid-2013, bringing 281 upscale apartment homes, 4,500 square feet of vibrant retail, and nearly 500 parking spaces to Baltimore’s historic Fells Point neighborhood. The asset was designed to achieve LEED Gold certification.

Bozzuto’s strategy is to hold on to its apartment assets. But, in this case, Cigna, one of the equity partners in the development of Union Wharf, decided to sell. And Bozzuto agreed. Thomas Bozzuto told the Baltimore Business Journal that he was not an enthusiastic seller. He said that competition for the 281-unit building was intense and that the terms of the sale are likely to create a buzz among investors and developers.

Photo credit: The Bozzuto Group

Insurance, Inc. to Move HQ to BECO Tower II

30 Mar 2015, 1:38 pm

By Adrian Maties, Associate Editor

BECO Management, Inc. has announced the signing of another tenant at its BECO Tower II office building in the Owings Mills Town Center section of northwest Baltimore County. Insurance, Inc., the new tenant, will occupy 10,921 square feet of space. With this new signing, BECO Management said that it has leased over 25,000 square feet of space at BECO Tower II, in the first months of 2015.

BECO Tower II is a 12-story office building with 200,000 square feet of space. The property is located at 10461 Mill Run Circle. It is part of a two-building portfolio, totaling 330,000 square feet of Class “A”office space. Amenities include a state-of-the-art fitness center, a conference center for up to 110 people, and an outdoor lounge.

Last month, BECO Management announced the addition of four new tenants at the property. The leases represented more than 12,260 square feet of space. And The Vinca Group has also leased 1,735 square feet of space at BECO Tower II, to bring this year’s total leasing activity to over 25,000 square feet.

Insurance, Inc. is a full-service insurance agency. The company will relocate its headquarters to the new location by early summer. It will bring approximately 40 employees with it.

Insurance, Inc. looked for space in both the Owings Mills area and the I-83 corridor. In a news release, Dod Casey, president of Insurance, Inc., said that his company chose BECO Tower II because of the total value package the location presented. Casey also praised the building’s amenities, lighting and views.

Gary Applestein of Colliers International represented the landlord in the transaction. Matt Mueller of MacKenzie Commercial Real Estate Services represented the tenant.

 Photo credit: BECO Management

Brian Kelley: Investcorp’s Acquisition Strategy

29 Mar 2015, 1:42 am

By Adrian Maties, Associate Editor

Investcorp, a Bahrain-listed alternative investment fund, recently expanded its U.S. residential portfolio with the acquisition of four properties in the metropolitan areas of Washington, D.C., Orlando, San Diego and Baltimore. The purchase price was  approximately $300 million.

The four assets are:

  • The Arcadian, a garden-style townhome property in Silver Spring, Md.;
  • The Orion on Orpington, a 624-bed student housing property in Orlando;
  • The Waterleaf Apartment Complex, a 456-unit multifamily apartment complex in a northern suburb of San Diego;
  • The Fairways at Towson, an 828-unit apartment community in the Baltimore metro area.

Together, the four properties total more than 2.1 million square feet of space, with approximately 1,900 multifamily and student housing units. According to Investcorp, they have an average occupancy of 96 percent.

Investcorp’s real estate group has been very active in the U.S. in the past 12 months, purchasing properties collectively valued at more than $850 million.

Brian Kelley, principal of Investcorp’s real estate investment group, spoke with us about his company’s future plans for the U.S. and the four newly acquired properties.

Q: Investcorp has spent nearly $1 billion in the past 12 months to purchase properties in the U.S. What’s your feeling about the current state of the U.S. real estate market?

A: We still see many opportunities in the U.S. real estate market, with improving fundamentals as well as creative and flexible capital available for financing. The market currently offers attractive yield potential relative to other investment classes.

Q: What drove your company to acquire residential properties in Washington, D.C., Orlando, San Diego and Baltimore?

A: These properties are consistent with Investcorp’s longstanding strategy of targeting properties in the top 30 to 40 markets in the U.S., with stable cash flows as well as some upside potential. Investcorp underwrites from the bottom up, which is to say we start with interesting property-level dynamics before going on to assess larger market features. That said, we consistently look for deals in 30 or so of the largest metro areas, including the four represented in this portfolio. These particular markets have such features as good schools; relatively high costs of area housing; income, job and population growth; and a diversity of employment drivers.

Q: What are your plans for the four residential properties?

A: With each of these properties, we are implementing light value-add and upgrade programs: interior renovations, common-area amenity upgrades, etc. We also plan to address some deferred maintenance issues. Consistent with our strategy, each of the properties is highly occupied, with stable cash flows.

Q: Investcorp purchased the four properties in joint ventures with different partners. Is this part of your expansion strategy?

A: We generally choose to co-invest with local operating partners who can provide local area expertise and hands-on day-to-day oversight of the properties. That said, we are fully staffed with asset management professionals who have the experience and resources to manage properties on a direct basis, as necessary, or in close cooperation with our operating partners. All four of these transactions include operating partners who have co-invested in the deals and thus share an alignment of interest with Investcorp and its investors.

Q: Do you plan to acquire any other properties in the near future?

A: We are active in most major (top 30-40) U.S. metro areas and are actively seeking new opportunities. A consistent theme in most of our real estate investments is strong levels of current yield.

Photo credit: Investcorp

Ruppert Properties Buys Three-Building Office Portfolio in Columbia’s Rivers Technology Park

23 Mar 2015, 12:00 pm

By Adrian Maties, Associate Editor

Three more Greater Baltimore office properties have recently changed hands. The three buildings are all part of the Rivers Technology Park, in Columbia.

Ruppert Properties paid a total of $8.15 million to purchase the single-story properties at 9125, 9135, and 9145 Guilford Road. Greenfield Partners, LLC was the seller. It was represented in the transaction by DTZ’s Baltimore Capital Markets team.

The three-building portfolio offers 85,216 square feet of space. According to PropertyShark, Greenfield Partners bought the properties in April 2012 from Liberty Property Trust. The purchase price was $7.95 million.

According to Marcus & Millichap’s Baltimore Office Research Report for 2015, overall transaction velocity will remain stable in the area this year, as deal volume expands slightly. While the number of transactions will remain relatively steady, the price per square foot will continue to rise, driven by investor interest, which is expected to exceed supply. Marcus & Millichap also said that properties in Columbia, Annapolis, Baltimore and along Highway 83 will stay in high demand, and will create bidding competition. Greater Baltimore office vacancies are expected to drop to 14.5 percent this year, with rents increasing 0.9 percent, to $21.28 per square foot.

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