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Good things come in three: stooges, musketeers, and Dog Nights. And now: 1.5M SF of Baltimore-area industrial traded hands in the last three business days, spread across three deals. The latest, which came out minutes ago, is Korth Construction's purchase of a 200k SF portfolio from Scott Group. Is the influx a coincidence? We think not. The defining part of each deal: tons of offers.
Cris Abramson in DC on Jan. 10, 2012
ProLogis has already announced a strategy to sell off non-core assets, and this time it was a 951k SF portfolio (three MD buildings totaling 770k SF and one in New Jersey/Greater Philly) to New Jersey-based SK Realty Management. Cushman & Wakefield regional capital markets head Cris Abramson, who's based in Baltimore, told us this morning that having a lot of offers (this deal attracted about a dozen) enables the seller to dispose of a mixed-bag of properties at one time at a solid price point. It didn't hurt that these properties have solid credit, are fully occupied, and have long-term leases. Cris tells us SK Realty has been quite active in bulk industrial properties along the East Coast.
Reznick Intext BALT
600 Hickory Drive, Aberdeen, MD
The specifics on SK's new properties: 600 Hickory Drive in Aberdeen (above, if the giant address didn't give it away) is 205k SF and sits on 18.5 acres, and the 471k SF 500 Hickory Drive next door is on 44 acres. As a regional distribution hub, Aberdeen is a touch more volatile than local warehousing markets, Cris says: bigger rewards but harder to fill the larger spaces once vacant. SK also took the 94k SF 7616 Canton Center Dr in Baltimore City on eight acres and Thorofare, NJ's 181k SF 100 Friars Blvd on 13 acres. Cris worked on the deal, which closed in December, with colleagues Gary Gabriel, Brian Kruger, Nick Signor, Paul Torosian, and John Plower, as well as Cushman & Wakefield Sonnenblick-Goldman's Michael Ryan.
Jonathan Beard, JOhn Wilhide, Breahn McAteer, and Bo Cashman on Jan. 10, 2012
CBRE's Bo Cashman (right, with colleagues Jonathan Beard,John Wilhide, and Breahn McAteer) also told us this morning about Lincoln Property and Invesco's sale of the 508k SF Lincoln Crossroads in Hanover to Industrial Income Trust. (That REIT just bought a COPT property near the airport, and Bo says it's been active in other Eastern markets, so keep an eye out.) 7481 and 7451 Coca Cola Dr in Patapsco Valley Business Park attracted 24 bids, Bo says, a lot for a $40M-ish deal. He tells us the Baltimore metro area, which includes the Baltimore/Washington Corridor, turned in $50M in industrial deals in '09. The next year it was $250M, and 2011 had $406M (that includes the Lincoln Crossroads deal).
Lincoln Crossroads, 7481 Coca Cola Drive, 7451 Coca Cola Drive, Hanover, MD
He says investors think of industrial properties like Lincoln Crossroads as not capital intensive. Re-leasing doesn't require the same capital infusion, for instance. Plus, an institutional investor that wants core product in the Mid-Atlantic really is limited to this particular corridor, with just a 70M SF inventory.
The four buildings Korth bought from Scott Group are 83% leased to 60 tenants. It includes Anne Arundel County's 75k SF Crain Centre in Glen Burnie and three Prince George's County properties: Capitol Heights' 54,400 SF Ritchie Business Center and 16,500 SF Dunmore Building and Landover's 47k SF Rainswood Building. NAI KLNB's Chris Kubler repped the seller. Though not bulk industrial like the other two deals above, this one shares other similarities: a December closing and, yes, a high number of bids.