News
FIRST AND HUGE
May 10, 2011
| At our first-ever Baltimore State of the Market on Friday, more than 450 of you packed the Renaissance Harborplace to hear our panel of market experts, and some of you even took copious notes. |
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| Recovery's here, but what about growth? Our panelists agreed it'll be a while. The good news: BRAC and Maryland's strong demographics mean we'll do better than most. |
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| Manekin CEO Richard Alter says large BRAC contractors like SAIC and Raytheon have established on-base presences at Aberdeen Proving Ground, but concerns about federal belt-tightening are preventing small- and mid-size companies from relocating to Maryland. He also says banks aren't taking back as many distressed local projects as they did during the S&L crisis (and those that are being sold tend to be residential projects or mortgage portfolios). |
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| Continental Realty CEO JM Schapiro says he sees the most distress in Florida. His company recently bought a 115k SF Class-A shopping center carrying a $32M note there for $11M (the original developer paid $12M for just the land). Why the big markdown? Banks are bringing impairment and book values closer (between 3% and 8%) by reducing asset values, JM says. Locally, he says multifamily and retail rents in Continental's portfolio are up across the board. Investment-wise, JM thinks returns are getting lower so expectations should, too. |
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| Capital markets have recovered, says COPT COO Roger Waesche(he estimates his REIT's cost of capital at just under 8%). He finds debt and equity are easier to get than last year, and pricing spikes in well-located Class-A properties will filter down to lower-quality buildings because competition is fierce. Roger says an inadequate transportation network and continued expansion of a highly educated workforce are the Baltimore area's biggest barrier to realizing the benefits of BRAC. It'll take time before the program's full effects are felt, Roger says. |
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| Thanks to Miles & Stockbridge guru Rad DeTar for moderating our first panel. |
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| From our great sponsor: Honeywell marketing programs coordinator Suzanne Torralba and marketing rep Andrew Borgognoni told guests about PeakRewards and its benefits for multifamily buildings. |
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| Reznick Group brought the whole team in support of principal (and second panel moderator) Kurt Sturn (third from left). |
