Finmarc is Making Noise After Decades Under the Radar
Bethesda-based Finmarc Management has been just fine buying up and investing in properties and flipping them for profits for decades without making a peep about it. But now, as their deals have gotten bigger, along with the competition in the DC region, the principals are ready to get louder.
In the last two years, Finmarc has bought and sold more than $400M worth of properties, which wouldn’t be as significant if they were buying trophy office or apartments. But Finmarc specializes in shopping centers, industrial and suburban offices. “As we’ve bought larger and more visible assets, institutions and brokers would say ‘who are these guys?’” Neil Markus, snapped next to partners Marc Solomon and David Fink, says from Finmarc’s 11th-floor Bethesda office. The firm was founded in 1987. “We’ve always been very private. But we’re making a conscious effort to get our name out there.”
Most recently, Finmarc bought the 61,500 SF Travilah Square Shopping Center in the I-270 Tech Corridor section of Montgomery County for $22.4M with plans to redevelop the property; a 342,000 SF Industrial/Flex project in Gaithersburg for $33M; and an 85-unit apartment building in the R-B Corridor for $40M that they converted into condos. In May, Finmarc sold the Chipotle and Golfsmith shopping center in Tysons (above) for $31.1M, which they purchased for $8.2M when it was mostly vacant, completed a $4.5M renovation and re-tenanted. Last October, Finmarc paid $28.4M to buy a just-renovated, 95% leased, 292k SF shopping center in St. Mary’s County, MD.
The crown jewel of its recent dealings, however, is the transformation of a 150k SF former Syms store in Cherry Hill, NJ. It had been vacant for three years since the chain went bankrupt, but Finmarc bought it in 2013 and leased it up completely as a state-of-the-art medical office building for a division of the University of Pennsylvania Medical System. The lease is for 20 years and it will fill up next fall, after Finmarc and Penn finish a $50M renovation (rendered above). “That was the highest-profile real estate transaction in Cherry Hill in years,” David says.
All this might seem out of character with the recent dialogue in the commercial real estate community. Even in communities where Finmarc has a big presence, like Montgomery County, shopping centers, malls and office parks are being torn down and replaced by mixed-use districts, or, as the Washington Post called them, "mini cities." But the notion that suburban retail and office is dead just doesn’t fly with David, Marc and Neil. “It’s very geographically sensitive in terms of what will be successful and what won’t now and in the future,” Neil says. “But a blanket statement just doesn’t play.” Maybe for huge companies or REITs, the shopping center game is getting harder to manage, but Finmarc finances all its deals, and with just Neil, Marc and David controlling decision-making, they can move fast. “We’re sort of a throwback Thursday company,” Neil says. “When we like something, we know we can move fast and we almost always close.” For David and Marc, snapped last year, it's a real throwback—they went to kindergarten together and have remained BFFs.
They are currently working on a mixed-use project, converting office buildings Waterfront Center I & II (above) that'll be one block from the Potomac River on the Alexandria waterfront, a mix of office, retail and residential. They're also redeveloping the White Oak Town Center in the Silver Spring/White Oak area of Montgomery County, which is a proposed 1M SF development with grocery, restaurants, retail, multifamily apartments/condos, hotel and office. It's projects like these that have taken Finmarc from a relatively anonymous retail owner to being the subject of that enduring question: "Who are these guys?"
That's why their reputation must go a long way. The three are huge college basketball fans—David and Marc both went to the University of Maryland, as did Bisnow’s DC reporter, and our conversation started out with nervous bragging about the Terps’ preseason No. 1 ESPN ranking—and compared their deals to a player recruitment. “When a kid signs with Maryland,” David says, “they sign with (head coach Mark) Turgeon, not necessarily with the school.” Neil added “we’d rather walk than do a deal that will reflect poorly on us. No matter how big DC has gotten, it’s still a very small community.” The Maryland connection was serendipitous last January when Finmarc sold the 58-acre Port Covington Walmart and former Sam’s Club site in Baltimore for $35M to Under Armor, founded by former UMD football player Kevin Plank, and the site is being turned into the sports apparel company’s new HQ, next to Plank's planned distillery (above).