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Real Estate Weekly: O’Malley signs bill to adopt green construction code

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

State House dome’s exterior gets attention

The Maryland State House dome will be getting a paint job and some window work. The Department of General Services announced the plans on Monday.

The work began on May 1. Modern paint coatings used in recent years have failed on the 222-year-old dome. The coatings will be removed while the historic oil-based coatings will be preserved. Dome windows also will be restored. J. Rodney Little, director of the Maryland Historical Trust, said caretakers are constantly amazed how much of the early fabric of the building survives.

He said many areas on the exterior of the dome retain the original cypress shingles that were installed in 1785. Sam Cook, special assistant to the secretary of the department, said the project is scheduled to be finished Oct. 31.

Thayer acquires hotels

Thayer Lodging Group of Annapolis, a real estate venture capital company that specializes in the hospitality industry, said it completed the acquisitions of the 337-room JW Marriott San Francisco Union Square from Ashford Hospitality Trust for $96 million, and the 304-room Hotel Palomar in Atlanta from WP Partners, a private investment group.

The company did not disclose the price that it paid for the Palomar, now rebranded as a Renaissance Hotel. Thayer also completed a $128 million recapitalization of Interstate Hotels & Resorts, a global hotel management company that it owns in a 50/50 joint venture with Jin Jiang Hotels, China’s largest lodging company.

Hotels get Real

Real Hospitality Group of Ocean City, a provider of property management and business development services for hotels, resorts and similar properties, said it signed three new contracts in the first four months of 2011, bringing its client portfolio to 16 hotels with 2,577 rooms in New York, Pennsylvania and West Virginia.

Non-hotel properties include an exhibit center and restaurant in Morgantown, W.Va., and a rooftop entertainment club overlooking Times Square in New York. The company, founded in June 2010, has management arrangements with Starwood, Hilton, Marriott, Wyndham, IHG and Choice hotel owners.

Hagerstown’s new store

A Pennsylvania company that recycles printer-ink cartridges says it’s opening a store in downtown Hagerstown. Chambersburg, Pa.-based Think reInk said Monday it has agreed to anchor a business incubator in a former CVS pharmacy building that the city bought in April.

Company President Nathan Rotz said the business refills a variety of ink cartridges for consumers and businesses. The city said the store will create two jobs initially when it opens this summer.

Water meter rehab seen

Alfred H. Foxx, director of the Baltimore City Department of Public Works, told a City Council hearing on Tuesday that the department plans to overhaul its water-meter reading and billing system over a two- to five-year period.

Foxx said since taking over the department last year, he has been working to assess the current system and plan both short- and long-term improvements to increase meter reading efficiency and accuracy, as well as tackle the need for greater responsiveness to customer concerns. The department has more than 400,000 metered accounts across the region, and its meter system is more than 30 years old.

Toys R Us goes for solar

Constellation Energy Group of Baltimore will build and operate North America’s largest rooftop solar power installation on top of a Toys R Us distribution center in Flanders, N.J., the toy retailer announced Wednesday.

The company said the system will provide an estimated 72 percent of the electrical needs of the center. That amount is equal to the electricity used to power 532 homes.

Renovations completed at Towson branch library

Baltimore County officials held a ribbon-cutting ceremony Thursday to recognize completion of renovations at the Towson branch of the Baltimore County Pubic Library.

An interior renovation that began in March improved the adult fiction area as well as the juvenile, teen and magazine areas, with installation of new shelving, pendant light fixtures and carpeting. Additionally, two tutoring rooms were created. Renovations, budgeted at $222,000, actually cost approximately $201,000.

A grant from the Maryland State Department of Education Division of Library Development and Services helped to pay 50 percent of the cost. The Towson branch building was constructed in 1974 and expanded in 1990. An exterior renovation was completed in fall 1999.

Saul Centers project in Arlington, Va. gets construction loan from Prudential

Prudential Mortgage Capital Co. closed a $125 million loan for Saul Centers, a Bethesda-based real estate investment trust. The loan provides construction take-out financing for Clarendon Center, a new, 402,000-square-foot mixed-use development in Arlington, Va., that includes retail, office and luxury apartment rentals.

The loan term is for 15 years with a 25-year amortization. The development’s south tower contains 244 luxury apartments, 75,500 square feet of Class A office space and 29,500 square feet of ground-floor retail anchored by Trader Joe’s.

The north tower contains 95,500 square feet of Class A office space and 13,000 square feet of fully-leased ground floor retail. The property has more than 600 parking spaces in two underground garages.

NAIOP-MD members get together to work on Living Classrooms project

More than 150 members of NAIOP-MD recently spent an afternoon constructing 50 floating wetlands and 30 picnic tables in support of the Living Classrooms Foundation in Baltimore.

Various building teams worked throughout the day to drive screws into picnic tables and manipulate various recycled materials to fashion the floating wetlands. The Living Classroom Foundation intends to anchor the finished wetlands in areas throughout the Inner Harbor to act as natural habitats for fish and other forms of wildlife.

The picnic tables will be used at Living Classroom’s various campuses around the state. The event, sponsored by NAIOP-MD’s Community Service Committee, represents the second time in the past two years that the organizations have partnered together.

Brendan Gill of MacKenzie Commercial Real Estate Services and Connie Rhodes of Rhodes Development served as the co-chairs of the event.

O’Malley signs bill to adopt green construction code

Gov. Martin O’Malley signed into law on Tuesday legislation passed by the Maryland General Assembly adopting the International Green Construction Code as an optional requirement for new construction.

The Maryland legislature was the first in the country to approve the IGCC. HB 972, sponsored by Del. Dana Stein, D-Baltimore County, authorizes the Maryland Department of Housing and Community Development to adopt the IGCC and enables adoption of the IGCC by local governments in Maryland.

Maryland’s IGCC will apply to all commercial buildings as well as residential properties more than three stories high. Stein characterized the enactment as key to reducing energy use.

“The code provides for more ‘green’ and energy efficient features in building construction,” he said in a release.” Stuart Kaplow, chair of the U.S. Green Building Council Maryland, said “This is the most significant environmental legislation adopted in Maryland this year. The IGCC is at the confluence of pro business and pro environment. It is what is best about the modern environmental movement and will quickly be adopted across the country.”

Lender’s profit slips

Walker & Dunlop Inc., a Bethesda-based commercial real estate lender, reported sharply lower earnings for the first quarter of 2011 compared to the prior-year period.

W&D posted net income of $6.6 million, or 31 cents per diluted share, for the first three months of 2011, versus net income of $10.7 million, or 73 cents per diluted share, for the comparable 2010 period. Revenue also fell, to $29 million this year versus $32.9 million the year before.

On average, five analysts surveyed by Thomson Reuters anticipated earnings of 28 cents per share on revenue of $33.2 million for the 2011 quarter.

RLJ shares slip on debut

Shares of RLJ Lodging Trust fell Wednesday in their market debut after the hotel owner priced its initial public offering below its expected range.

The shares of the Bethesda-based company fell 32 cents, or 1.8 percent, Wednesday to close at $17.68. The shares had traded as low as $17.26 earlier in the day. RLJ Lodging said Wednesday it priced 27.5 million shares at $18 apiece for a total of $495 million.

The company had expected to price shares between $19 and $20 each. Underwriters have a 30-day option to buy 4.125 million more shares to cover excess demand. The company plans to use the proceeds to pay down debt. RLJ Lodging owns 140 hotels in 19 states and Washington, D.C., and plans to qualify as a real estate investment trust for tax reasons.

Broadband network construction starts

Howard County Executive Ken Ulman kicked off construction Thursday of the first leg of the Inter-County Broadband Network (ICBN), a high-speed fiber optic network that will directly connect 715 anchor institutions in Central Maryland, including hundreds of K-12 public schools, libraries, public safety agencies, community colleges and other government institutions.

Howard County is a grant sub-recipient of the One Maryland Broadband Network and is responsible for managing the $72 million (of the $115 million total granted to the state) directed to the ICBN, a collaborative inter-governmental consortium comprised of 10 Central Maryland jurisdictions.

Construction will take from 18 months to two years, principally in public right-of-way. When complete, the high-speed broadband network will touch every county in the state of Maryland.

This week in leases

  • CyberSpa, a computer repair business, has opened its first store in Maryland — at Arundel Mills mall. The company has leased 800 square feet of space close to the mall’s movie theaters, according to a spokesman. CyberSpa touts its service as being different from the traditional “diagnose-and-repair model for PCs.” Instead, CyberSpa replaces the computer’s old hard drive with a new, faster, higher-capacity drive, loads it with the latest software and virus scans and copies all files and settings to the new hard drive. The service costs a flat rate of $149.99, and customers are promised same-day service.
  • Better Business Bureau | Greater Maryland Inc. has relocated its office from 1414 Key Highway to new quarters in the Federal Reserve Bank building at 502 S. Sharp St. The move was scheduled to take place Thursday. In a release, BBB President and CEO Angie Barnett said the new space “will complement our growth tremendously, providing room for meetings, dispute resolution services, educational programs and events including our annual Torch Awards for Marketplace Excellence,” scheduled this year for Oct. 6. The amount of space leased by BBB was not immediately available, and BBB officials did not respond to an email seeking more information.

Personnel

  • The Howard Hughes Corp. of Columbia said John E. DeWolf has joined the company as a senior vice president. DeWolf will head up the company’s development operations in Columbia, Alexandria, Va., and Princeton, N.J. DeWolf, who will work out of Columbia, brings more than 30 years of real estate and development experience to his new role. Most recently, he headed his own consulting firm offering real estate strategy, portfolio management and startup guidance for multibillion-dollar businesses. The Howard Hughes Corp. was spun off from General Growth Properties Inc. after that company emerged from bankruptcy. It owns 34 assets that include master planned communities, operating properties, development opportunities and others, spanning 18 states from Hawaii to New York.
  • Continental Realty Corp. of Baltimore hired Paul Kang as associate in the acquisition department of the commercial, retail and residential development and management company. He was formerly a real estate analyst for First Capital Realty. In his new position, Kang will assist in the identification and evaluation of new acquisition opportunities in the mid-Atlantic and southern Florida regions. This includes conducting market research activities, performing analytic studies, reviewing and projecting demographics and assisting with underwriting efforts. He will also act as a liaison between the company and regional investment sales professionals. Kang graduated from the University of Michigan with a bachelor’s degree in economics.
  • Jeffery P. McBride, a principal of EBL Engineers LLC, a Baltimore-based, multi-disciplined engineering firm, has been elected president of the American Council of Engineering Companies, Maryland. He will be inducted at the ACEC/MD’s annual meeting at The Greenbrier in West Virginia, for a one-year term running from June 2011 to June 2012. McBride, whose engineering specialty is fire protection, has been with EBL for 24 years. He holds bachelor’s and master’s degrees in fire protection engineering from the University of Maryland. ACEC/MD, with headquarters in Baltimore, is a nonprofit association of more than 80 multi-sized consulting engineering firms located throughout the state, serving the public and private sectors.
  • V. Frederic Lyon, a construction and commercial lawyer, has joined The McCammon Group, a mediation, arbitration, facilitation, training, and consulting firm. He is a principal in TriCon Power Group and The Lyon Firm, and will continue his law practice with them.
  • Christina Pappas has been promoted from associate to Of Counsel in the real estate practice of DLA Piper’s Baltimore office. Pappas practices in the area of real estate development and finance. She received her J.D. and B.A. from the University of Baltimore.