News
BEWARE THE HANGOVER
April 26, 2012
| What's the best indicator of a healthy CRE market? At Bisnow'sBaltimore Real Estate Summit, Manekin CEO Richard Alter said it's whether the practitioners are having fun. (The same rules apply to little league.) Back in '09, Bozzuto Development prez Toby Bozzuto remembers thinking "I'll be grateful to develop again." Guess what, Richard: Toby's having fun. | |
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| In the words of another Toby (Keith), "How do you like me now?" Toby (right, whom we snapped with Morgan Stanley Smith Barney's Justin Pearlstone, Electronic Systems' Jonathan Mauldin, and Continental Title Group's Liz Jones) has his Union Wharf apartments rising in Fells Point as you read this. Still, he's worried about multifamily sponsors once again getting stuck with projects before they start or deliver and thinks apartment development could chill out for a bit. "There's always a hangover after a party," he says. (To clarify, he's not referring to Bisnow morning events... we hope.) | |
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| Richard chose his "Police Line Do Not Cross" tie in case violence broke out during the 48 laps he made in the Hilton parking garage that morning. Richard says landlords are still offering better deals than they were five years ago, just as a lot of 2000-vintage leases expire. Absorption is good because spec building has been down (as evidenced in all the '07, '08, and '09 buildings that pulled in NAIOP Maryland awards last week). | |
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| Continental Realty prez J. M. Shapiro (with Consolidated Equities'Todd Tilson) says his firm's 7,000 Class-B apartments in Maryland and the Southeast are 97% occupied, and its couple-million SF retail portfolio is surprisingly similar, with a 3.7% vacancy rate. He says there's less distress in Maryland than in Florida, and so he spends his time here looking for off-market deals, the ones that want to close in a week or two. He's raising a new fund for DC and NoVa investment that's drawing funders from as far as Alaska. | |
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| Hord Coplan Macht's Ed Hord says architecture firms are the canaries in the coal mines, the first to see an economic slide and the first to experience the climb back out. (Technically, of course, those would be zombie canaries that make it back out.) His firm, which has been doing a lot of multifamily, used to do all greenfield work. Now it's all infill, even in outer communities like Towson, which is becoming more urban. It's all about walkability, he says, like the Inner Harbor, Harbor East, and Fells Point. Richard agrees, saying Manekin's success is based on having been the early bird to areas where people were moving (Frederick, Loudoun, Harford), but now opportunities like that are in redevelopment. | |
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| We also snapped our moderator, Miles & Stockbridge's Rad DeTar, and Fire Alarm Solutions prez Beth Hardsock. Beth educated us on Baltimorean accents, saying she's got less of the Dundalk drawl and more of the Baltimore "O." | |
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| Economic Alliance of Greater Baltimore CEO Tom Sadowski has some exciting news: Two UK financial services firms are looking for space Downtown (both mentioned the Circulator as a perk). And a new parcel has surfaced for CSX's port search that's not as close to residential as the others, so it'll will work a lot better. Baltimore has consistently ranked among the top five places for young pros to start their careers (thank you, education, healthcare, IT, and finance), he says. Downtown apartments average 97% occupancy, and office vacancy, at 17.7%, is better than in Chicago, Seattle, Dallas, and Atlanta. Not bad, Baltimore. Not bad at all. | |
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| Downtown Alliance of Baltimore CEO Kirby Fowler had his own breaking news: Yes, Best Buy closed, but Howard Brown has a lease on the second floor (that just happened Saturday), and there's interest in the third floor. (One of the best ways to get over a break up: Move right on with an attractive new lease.) He also says two more items are moving through the EDC for street-level buildouts on Pratt, getting the corridor closer to a nice, continuous walk from Harbor Place to Harbor East. After a three-year dry spell, it's nice to be going to groundbreakings and grand openings again, he says. | |
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| Kirby also says the city lost 30,000 residents over the past decade, leaving 640,000. But as BRAC moved more personnel to the region and older ones retired, it was hoped that their replacements would seek out B'more's city life, or at least the closer-in neighborhoods. To that end, says Continental Title's Billy Yerman (our moderator, whom we snapped with colleagues CEO Pete Burstein, Lisa Eidelberg, and Alex Cservek), his office relocated from the suburbs to the new McHenry Row. |
