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Real Estate Weekly – 10/21/11: LaSalle’s third-quarter results improve

LaSalle’s third-quarter results improve

LaSalle Hotel Properties of Bethesda, a real estate investment trust that owns 36 upscale and luxury hotels nationwide, reported improvement in its third-quarter funds from operations, due to more rooms being booked and increased room rates. The REIT reported FFO of $41.9 million, or 49 cents per diluted share, in this year’s third quarter, versus $8.5 million, or 12 cents per share, in the prior-year period. Third-quarter revenue rose to $199.1 million, compared to $164.7 million in the 2010 quarter. Analysts who follow the company had predicted FFO of 49 cents per share for the past quarter, and revenue of $195.8 million, according to Thomson Reuters.

RFPs issued for West Side properties

The Baltimore Development Corp. announced it has issued two separate requests for proposals for properties in the in the Market Center Urban Renewal Area. One RFP is for five city-owned properties at 142 and 144 W. Fayette St.; and 102, 104 and 106 N. Liberty St. Also, an RFP has been issued for two sites in the Market Center Urban Renewal Area. Site A includes a surface parking lot, a vacant building at 207-209 Park Ave. and a vacant building at 208 N. Liberty St. Site B consists of two vacant buildings at 114 W. Lexington St. and 116-120 W. Lexington St. To download the RFPs, go to www.baltimoredevelopment.com.

Historic former police station now houses businesses

The historic former Northern District Police Station at Keswick Road and 34th Street in Hampden, which was rescued from the wrecking ball and converted to office space, has picked up two new tenants.

Miller Investments, a real estate investment and development firm, leased 2,200 square feet in the Carriage House for its corporate headquarters. Also, Baltimore Dance and Fitness at Studio Thirty4 has leased 3,300 square feet on the third floor of the main building, in what was originally the gymnasium for police officers.

The main building and two outbuildings contain 24,000 square feet of space and house more than a dozen tenants. They range from the largest, the Community Law Center/CPHA with 4,315 square feet, to the smallest, MLM Products, with 509 square feet. All but 6.3 percent — 1,510 square feet — of the space is leased, according to Ben Frederick Realty Inc., the leasing agent.

The main building, dubbed “The Castle,” was built in 1899 and renovated in 2007 at a cost of $8 million. In 2010, the building received the Restoration and Rehabilitation Award from Baltimore Heritage Inc. Many of the original features were retained during the reconstruction, including stained glass transoms, keystoned brownstone arches, wood wainscoting, tin ceilings, hardwood floors and exposed beam ceilings.

Solar panels installed at 4 FRIT properties in N.J.

Federal Realty Investment Trust of Rockville announced commencement of the installation of solar panels on 400,000 square feet of roof space and 112,000 square feet of ground area at four of its properties in New Jersey, pending final zoning approvals. Roof-mounted panels will be installed at Brick Plaza in Brick and Troy Hills Shopping Center in Parsippany, while both roof and ground-mounted panels will be installed at Mercer Mall in Lawrenceville, and Ellisburg Circle in Cherry Hill. Upon completion, the solar panels are expected to meet approximately 20 percent of the electricity needs for tenants and common areas at those properties.

Salisbury architectural firm designs industrial building in Middletown, Del.

Becker Morgan Group of Salisbury, an architecture, civil engineering, surveying and interior design firm, teamed with Wohlsen Construction of New Castle, Del., to complete the 434,000-square-foot Johnson Controls/Middletown Distribution Center in the Westown Business Park in Middletown, Del. The distribution center includes a two-story, 28,000-square-foot administrative and employee office area, 39 truck bays and an advanced acid waste treatment system. The industrial grade facility is suitable for automotive parts assembly, conveyance and sequencing to support form-fill battery processes. The project was completed on a fast-track schedule, which allowed design and construction to be finished in a five-month window. Becker Morgan Group provided architectural services for the manufacturing facility, which is pursuing LEED certification as part of Johnson Controls’ commitment to sustainable facilities.

Lend/Lease to build Hagerstown school

Lend/Lease Construction, a unit of an Australian real estate and infrastructure development company, has been selected by the Washington County Board of Education to build a school to replace the 81-year-old Bester Elementary School in Hagerstown. The Herald-Mail of Hagerstown reported Lend/Lease’s bid of $1.38 million was the lowest of four bids received for the construction management contract. Lend/Lease’s office in Rockville will coordinate the construction. Construction of the 72,000-square-foot replacement school is expected to begin in July and be completed in the spring of 2014. Grimm + Parker Architects of Calverton designed the new building.

DiamondRock posts improved results

(AP) DiamondRock Hospitality Co. of Bethesda, a hotel real estate investment trust, reported improved third-quarter results as more people booked rooms and room rates rose. Funds from operations rose 28 percent to $22.8 million, or 14 cents per share, from $17.8 million, or 11 cents per share, last year. Excluding one-time items, FFO totaled 16 cents per share, matching analyst expectations, according to a poll by FactSet. Revenue rose 19 percent to $179 million from $151.1 million, helped by higher room and food and beverage receipts. The company also said it is selling three hotels, in Lexington, Ky., Atlanta and Austin, Texas, for $262.5 million.

Historic Catoctin Aqueduct dedicated after restoration

The historic Catoctin Aqueduct, a landmark structure in Frederick County that is listed on the National Register of Historic Places, was dedicated Saturday following a $2.7 million restoration, paid for by federal funding from the American Recovery and Reinvestment Act.

More than 40 jobs were created by the construction project, according to the office of U.S. Sen. Ben Cardin, one of the public officials who participated in the dedication. It is projected that restoration will attract approximately 520,000 additional visitors a year, providing more than $350,000 in economic benefit to the area.

The aqueduct — a three-arch structure with a center elliptical arch — is one of 11 stone aqueducts along the 184-mile C&O Canal, and the only one that lies in ruin. The structure, which was built in the early 1800s, deteriorated after closure of the canal operations in 1924. It had a major failure in 1973 when the weakened structure partially collapsed into Catoctin Creek.

The restoration project was a partnership with the National Park Service, the Catoctin Aqueduct Restoration Fund Inc. and the Community Foundation of Frederick County Inc.

SALES

Cassidy Turley announced the sale of the Coastal Sunbelt Building, a 171,000-square-foot industrial building in the Corridor Industrial Park (8704 Bollman Place) in Savage. New York-based Angelo, Gordon & Co. purchased the building for $16,835,000. Built in 1984 and renovated in 2004, the asset is 100 percent leased to Coastal Sunbelt Produce through 2022. Jon Carpenter and Jay Wellschlager of Cassidy Turley’s Capital Markets Group represented the seller, MCG Capital.

Dr. Larry Gaston, a dermatologist, purchased a 13,500-square-foot office building at 401 N. Howard St. in Baltimore. D. Middleton Smith III, Richard F. Blue Jr. and Patrick M. Smith of Blue & Obrecht Realty LLC represented the seller, Liberty Federal Savings & Loan Association. Leroy McLane Jr. of Execuhome Realty represented the buyer.

Personnel

Gail M. Stern joined Rosenberg|Martin|Greenberg, of Baltimore on Oct. 10. Stern has 25 years of experience as a business attorney, including both law firm and in-house counsel positions. She represents clients in mergers and acquisitions, financings, real estate transactions, contracts, and corporate and business matters. Stern most recently had been senior vice president, legal at Limited Brands Inc. She previously was a partner with Whiteford, Taylor & Preston, and Frank, Bernstein, Conaway and Goldman. Stern also was vice president and general counsel for Mullan Enterprises. She is a member of the board of governors of the American College of Real Estate Lawyers and of the International Council of Shopping Center Law Conference Committee, and a past-chair of the Real Property, Planning and Zoning Section of the Maryland State Bar Association.

LEASES

NAI KLNB brokered a lease to AM-Liner East Inc. for 4,224 square feet of space within 9217-9219 Hampton Overlook in the Capitol Heights section of Prince George’s County. Alan Coppola of NAI KLNB and Bill Singer of Kenwood Management represented the landlord, Hampton Center East; Robert Hooper of Chesapeake Real Estate Group represented the tenant in the transaction. AM-Liner East, based in Berryville, Va., offers sanitary sewer and manhole rehabilitation services to the trenchless industry, according to its website.

Merritt Properties LLC reported the following leases were signed in September:

* Callrevu LLC, a call monitoring and reporting service company, leased 8,282 square feet of office space at Timonium Two, 1954 Greenspring Drive, in Baltimore County. Matt Mueller of MacKenzie Commercial Real Estate Services represented Callrevu.

* Maryland Wineries Association Inc., a nonprofit association representing the 49 wineries in Maryland, leased 1,200 square feet of office space at Timonium Business Park, 1940 Greenspring Drive.

* Manufacturers and Traders Trust Co., d/b/a M&T Bank, leased 22,105 square feet of office space at Timonium One, 1966 Greenspring Drive, Suite 405, in Timonium. Jim Cahill of Jones Lang LaSalle, represented M&T.

* Messiah Community Church leased 6,120 square feet of office and warehouse space at 10715 Red Run Blvd, in Owings Mills. Dawn Taylor of Otis Warren & Co. represented the tenant.

* DNJ Inc., d/b/a That Kitchen Place, a kitchen remodeling company, leased 4,050 square feet of warehouse and office space at Route 7 Business Park, 9321 Philadelphia Road in Rosedale.

In all five of these transactions, Merritt Properties was represented by its in-house leasing team of Pat Franklin, Whit Levering , Lou Boeri and Ashley Combs.

In addition, Merritt Properties reported these leases that were signed in October:

* Banyan Tree LLC – Weed Man of Annapolis, a lawn care services business, leased 2950 square feet of warehouse space at 1981 Moreland Parkway, Building 3, Bay 2, Annapolis, for the storage of lawn care products. Mike Walsh of Cassidy Turley represented the tenant in the transaction. Merritt Properties’ in-house leasing team of Pat Franklin, Whit Levering , Lou Boeri and Ashley Combs represented the owner.

* Nations Roof MidAtlantic LLC, a roofing company, leased 2,550 square feet of office and warehouse space at 150 Blades Lane, Suite E, in Glen Burnie.

* E.I.S. Group Inc., a freight forwarding company, leased 30,149 square feet of warehouse and shipping space at 4711 Hollins Ferry Road, in Lansdowne. Mike Roden of CB Richard Ellis represented E.I.S. in the negotiations. In the above two transactions, Merritt Properties was represented by its in-house team of Jamie Campbell, Liz Tarran-Jones, Vince Bagli and Steve Shaw.

Blue & Obrecht Realty LLC reported the following lease transactions:

* Medifast LLC, which owns and franchises weight control centers, leased 2,006 square feet of office space at 2219 York Road in Timonium. Richard F. Blue Jr. and Patrick M. Smith of Blue & Obrecht Realty LLC represented the landlord, 2219 York Road LLC.

* Smart Trans Ambulance, a dispatcher for a local ambulance company, leased 2,000 square feet of office space at 1930 Greenspring Drive in Timonium. F. Blue Jr. and D. Middleton Smith III of Blue & Obrecht Realty LLC represented the landlord, 1930 Greenspring Drive LLC.

* Sid Tool Co. Inc., d/b/a MSC Industrial Supply Co., direct marketers of industrial supplies and equipment, leased 5,400 square feet of flex space at 1550 Caton Center Drive in Baltimore. Richard F. Blue Jr. and Krager D Sanders of Blue & Obrecht Realty represented Sid Tool Co. Robert C. Becker of St. John Properties Inc. represented the landlord.

* Paula Moylan and Marquerite Laban, d/b/a Core Counseling Services, counseling and psychological services, leased 1,367 square feet of office space at Deer Park Center, a 56,188-square-foot, Class A office building at 9475 Deereco Road in Timonium, Paul F. Obrecht of Blue & Obrecht Realty LLC represented the landlord, Deer Park Center LLC; Michael Mueller if KLNB represented the tenant.

First Potomac Realty Trust of Bethesda announced three new leases totaling 23,802 square feet at Atlantic Corporate Park in Sterling, Va. American Medical Student Association signed a 10-year lease for 11,080 square feet. EduCap, a student loan administrator, signed a five-year lease for 7,197 square feet, and OneVoice Communications signed a six-year lease for 5,525 square feet. AMSA and EduCap are both relocating their headquarters to the new location. The property consists of two, four-story, Class A, LEED Gold Certified office buildings, totaling 221,182 square feet, which are now 26 percent leased. First Potomac acquired the newly constructed Atlantic Corporate Park in December 2010 for $22.55 million.