MacRo LTD Blog

Two Mega Deals Comprise 75% of Q1 2018 CRE Sales Volume

Posted by Rocky Mackintosh on May 09, 2018 Leave a comment

Multifamily and warehouse deals dominate overall Frederick County market sales with best first quarter results maybe ever!

q1-2018-cre-sales-865782-edited-977749-edited-917431-editedAs the county’s real estate development activity matures, it's becoming pretty normal to find commercial real estate deals over $10 million close per quarter. Over the course of the eight previous quarters (Q1 2016 through Q4 2017), six included at least one 8-digit transaction.

During that period twelve (4%) of the 297 closed transactions exceeded the $10 million mark
and comprised 64% of the total volume. The first 3-months of 2018 was slightly above that average with 2 deals out of 40 (5%) exceeded that figure and totaled 75% of all sales.

By far, the total of $110 million in CRE sales during the 1st quarter of ’18 outpaced results for the same period since the MacRo Team has been tracking the data. This figure happens to be the second highest volume quarter in the last 13. So, odds are that 2018 is looking to be another record year for commercial real estate transfers in Frederick County.

Big Deals Of Note

Apartments: As has been the case in many of the mega deals the last few years, it was another multifamily project that captured the top slot. Now known as Crystal Park at Waterford, the 314-unit garden property traded from KBS Legacy Partners Apartment REIT to Elite Street Capital, a Houston, Texas-based firm for a price of $45.9 million in on February 14th of this year. This 16 plus acre property is located just off Baughman’s Lane, just north of Fitzgerald’s Auto Mall. The transaction was a portion of a $218.9 million multifamily national portfolio deal between the two entities, which included 1,273 units according Erika Morphy at GlobeSt.com.

Building Materials: The runner up deal of the quarter was the sale of 7101 Geoffrey Way in the Dudrow Industrial Park. The former BlueLinx lumber plant (recently operating under the name of Carter Lumber) sits on 54 acres with 10.55 acres under roof and changed hands at a price of $38 million this past January. The new owner is BIP Frederick, apparently affiliated with Global Securitization Services based out of Melville, New York.

Cannabis: Another warehouse deal came in a distant 3rd in deal size, but significant nonetheless. For the past couple of years, Green Leaf Management, LLC. had been leasing a 42,000 square foot former printing business on Bowmans Crossing Lane, which they converted to a secure state of the art medical marijuana growing facility. The team at MacRo, Ltd. worked closely with Green Leaf and the building owner to transition the lease agreement to that of a sale, which was finalized in late February at a price of $3.9 million. The company products are sold to patients at over 20 licensed medical cannabis dispensaries throughout the state of Maryland.

Adaptive reuse: The long time and now former headquarters for Goodwill Industries of
Monocacy Valley, which is historically known as the Ox Fibre Brush Company located at 400 East Church Street, was sold to a newly formed entity known as HIG 400 East Church Street, LLC 100 at a price of an even $3,000,000 on March 9th. The Washington DC based ownership group is made of a number of partners who loosely refer to themselves as the Jack Group, and often collaborate on development and redevelop opportunities throughout the DC Metropolitan area. Clearly, the 81,600 square foot headquarters, that is situated on 2.6 acres, fits the bill for a mixed use residential/commercial adaptive reuse opportunity in a part of town where Bert Anderson has built his reputation on revitalizing the East Street corridor with projects like Everedy SquareShab Row and the Cannery.

As more and more investment dollars find their way to Frederick County, more opportunities will be created that will benefit our growing economy and quality of life.

Always tune into the MacRo Report Blog for a deeper look into the all things that impact the local commercial real estate market!

 

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Topics: Commercial and Industrial Real Estate, Real Estate Wisdom Ashleigh's Fields Notes