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Real Estate Weekly: General Growth Properties to sell Columbia shopping center

Leases, news and notes from Maryland's commercial real estate industry

General Growth Properties emerged this week from the Chapter 11 bankruptcy that it had been operating under for the past 16 months, and announced that it will sell the Gateway Overlook Shopping Center in Columbia for a gross sale price of $90 million.

Subject to certain limited conditions, the company said upon closing the sale it expected to reduce its debt by approximately $55 million, and generate excess proceeds of approximately $35 million. The announcement did not identify the buyer.

Under the approved bankruptcy reorganization, GGP split itself into two separate and independent, publicly traded corporations. One is still named General Growth Properties and continues to trade on the New York Stock Exchange under the current symbol GGP. It remains the second-largest shopping mall owner and operator in the country, with more than 183 regional malls in 43 states.

The other company, spun off from GGP, is called the Howard Hughes Corp. It consists of GGP’s portfolio of master-planned communities and other strategic real estate development opportunities. That company will trade on the New York Stock Exchange under the symbol HHC.

Grace’s new acquisition
W.R. Grace & Co. of Columbia, a specialty chemical manufacturer, announced it has acquired the business and assets of Wuhan Meilixin New Building Materials Co. Ltd., a Chinese manufacturer of waterproofing products.

Terms of the transaction were not disclosed. Meilixin, which makes customizable waterproofing membranes, materials and compounds, has manufacturing, administrative and warehousing operations in Wuhan, a provincial capital in central China.

Meilixin’s approximately 50 employees will be integrated into Grace Construction Products’ Specialty Building Materials group and operate through Grace’s Chinese subsidiary, Grace China Ltd.

Frederick Bon-Ton to close
Department store chain Bon-Ton Stores Inc. said it will close its 98,000-square-foot store at Frederick Towne Mall at the end of January, affecting approximately 56 employees.

Laid-off employees will be able to apply for positions at Bon-Ton’s store in Hagerstown, the company said in a statement. While not giving a specific reason for its decision, Bon-Ton indicated that the Frederick store’s sales were down.

Bon-Ton, with dual headquarters in York, Pa., and Milwaukee, Wis., operates 277 department stores in 23 states in the Northeast, Midwest and upper Great Plains.

Omega on target
Omega Healthcare Investors Inc. of Hunt Valley, a real estate investment trust that invests in the long-term care industry, reported third-quarter adjusted funds from operations available to common stockholders of $43.5 million, or 45 cents per diluted share, versus $30.7 million, or 37 cents per share, in the prior-year period.

Per-share earnings matched the 45 cent per share consensus of six analysts surveyed by Thomson Reuters. Revenue totaled $69.7 million in this year’s quarter versus $49.7 million in 2009. Analysts had forecast revenue of $66.5 million.

Gas stations to be sold
Tranzon Auction Properties, a nationwide auction and real estate disposition company, said it will sell at auction 21 gas and convenience stores in Delaware, Maryland and Pennsylvania.

The properties are part of a Chapter 7 liquidation of bankrupt Universal Marketing Inc., a Delaware-based gasoline, diesel and fuel products supplier. Sales are scheduled to start at 11 a.m. on Dec. 9 at the Doubletree Hotel in Annapolis.

Eleven of the properties are located on Maryland’s Eastern Shore, in Cambridge, Chestertown, Easton, Federalsburg, Preston, Salisbury and Snow Hill. Details are available online at www.cstoreauction.com.

Cumberland may sell land
The mayor of Cumberland is promoting a plan to sell 4,000 city-owned acres in nearby Pennsylvania to a conservation group for $4 million.

Mayor Lee Fiedler told the Cumberland Times-News that the city could use the proceeds to maintain and upgrade its aging underground water pipes. The forested land is in the watershed of two reservoirs — Lake Koon and Lake Gordon — that supply the city’s drinking water.

Fiedler said the deal with the Western Pennsylvania Conservancy would give the city continued use and control of the water while enabling the conservancy to manage the land for recreational purposes.

Howard County plant to convert methane to electricity

Pepco Energy Services Inc. of Arlington, Va., a subsidiary of Washington-based Pepco Holdings Inc., said it will design and build a gas-to-energy generating plant at the Alpha Ridge Landfill on Marriottsville Road in Howard County.

Methane gas, which is currently burned in a flare at the landfill, will be used as fuel for a reciprocating engine and generator to produce 1 MW of electric power. The completed project, costing about $3.9 million, will export electric power to the local utility grid and provide power for electric vehicles used at the landfill.

Plans call for the plant to start operating commercially by early 2012.

Wind power plan advances
Maryland officials announced a step forward in their plan to bring offshore wind power to the state’s coast.

The governor’s office on Monday said the federal government has accepted planning recommendations made by the state. The U.S. Interior Department is now asking companies to come forward if they’re interested in taking on the project.

Maryland and Delaware are the only two states to get to this point in the planning process with the federal government. The western edge of the proposed wind farm is about 10 nautical miles from the Ocean City coast. The eastern edge is about 27 nautical miles from the coast.

Chesapeake Bay Program awards grants
Four environmental organizations in Maryland received $416,655 from the Environmental Protection Agency’s Chesapeake Bay Program to help reduce pollution to local waterways and the bay.

The Center for Watershed Protection Inc. received $134,149 to implement storm water projects in the St. Mary’s River watershed in Southern Maryland. The Scenic Rivers Land Trust was awarded a $65,858 grant to advance the protection of 3,000 acres of high-priority land along the South River Greenway near Annapolis.

The Spa Creek Conservancy will use $141,648 to do a storm water retrofit with the Rich Morton Lincoln-Mercury dealership in Annapolis. Also, the Defenders of Wildlife received $75,000 to promote land trusts throughout the entire bay watershed.

Greenberg Gibbons recognized for Annapolis Towne Centre
The Annapolis Towne Centre, a $500 million mixed-use development, has been named the “Project of the Year” by the Land Development Council’s 2010 Excellence in Community Development Awards, presented by the Home Builders Association of Maryland.

Greenberg Gibbons, the developer of the project, announced. The award recognizes the most creative, first-class development projects that are sensitive to their surrounding communities, and make appropriate use of existing natural elements.

Owings Mills-based Greenberg Gibbons converted what was formerly an abandoned strip mall into 2 million square feet of residential, retail and office space. The project required the cleanup of one of the largest dry cleaner chemical spills in Maryland’s history. Greenberg Gibbons voluntarily conducted $5 million worth of environmental remediation and implemented a comprehensive storm water management program.

The project has created more than 2,800 new jobs, officials say, and brought in national retailers that include Target, Whole Foods, Brooks Brothers, Coldwater Creek and Talbots. Retail sales are expected to top $300 million annually. Greenberg Gibbons’ local involvement also resulted in the creation of a new community asset called the Mount Olive Community Life Center.

COPT completes stock offering
Corporate Office Properties Trust, an office real estate investment trust based in Columbia, said it completed its public offering of 7,475,000 newly issued common shares, including 975,000 shares to cover over-allotments.

The sale generated net proceeds, before offering expenses, of approximately $246 million. Earlier, COPT had said it would use the net proceeds from the offering to pay off debt and other expenses.

Beech Street Capital financing fuels Va. project
Beech Street Capital LLC, a Bethesda-based multi-family mortgage financing firm, said it provided a $14 million Fannie Mae Delegated Underwriting and Servicing Loan for the refinancing of the Bremner Woods Apartments in Richmond, Va.

The transaction was originated by New York-based Meridian Capital Group LLC and financed by Beech Street Capital as part of its correspondent relationship with Meridian. The 236-unit townhome community, built in 1972, is currently undergoing renovation to upgrade appliances, cabinetry and other interior features.

The property also includes sports and playground facilities.

This Week in Leases:

The following leases were announced by Merritt Properties LLC:

  • At BW TECH@UMBC Research and Technology Park, 5523 Research Park Drive in Catonsville, the U.S. Forest Service signed a lease for  3,277 square feet of office space. Also, the Medical Device Division of the University System of Maryland-UMBC is leasing 4,948 square feet of office space at the same location.
  • Diversified Investments LLC, retirement plan advisors, agreed to lease 2,644 square feet of office space at the Owings Mills Corporate Campus, 10045 Red Run Blvd.
  • ACS Hydrostructures of Virginia LLC, a civil engineering firm, inked a lease for 3,000 square feet of warehouse with office space at 832 Oregon Ave. in Linthicum.
  • Champion Trucking LLC, a truck maintenance company, signed a lease for 6,600 square feet of office/warehouse space at 3101 Lorena Ave. in  Baltimore City.
  • The Merritt team of Jamie Campbell, Ridgely Bowman, Vince Bagli and Steve Shaw negotiated these deals on behalf of the landlord.
  • Also, Clean Pros of Baltimore, doing business as Sears Home Improvement, a carpet and duct cleaning company, is taking 7,000 square feet of office and warehouse space at 2660 West Patapsco Ave, in Baltimore City. Merritt Properties’ Camptbell-Bowman-Bagli-Shaw team represented the landlord. Alan Orman of Cassidy Turley negotiated on behalf of the tenant.
  • USA Relocation, a moving and storage company, signed a lease for 2,512 square feet of warehouse and office space at 11221 Dolfield Road in Owings Mills. Pat Franklin, Whit Levering and Lou Boeri represented Merritt Properties in the transaction.
  • Mil-tek USA Recycling and Waste Solutions Inc., a firm that specializes in waste and recycling products, leased 14,020 square feet of warehouse/office space at 4600 Guilford Drive in Ashburn, Va. Keith Wallace and Steve Shaw of Merritt Properties were the landlord’s representatives.