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Frankel Sims buys office building in surging Towson market

Frankel Sims Law has purchased the 9,230-square-foot office property at 500 York Road in downtown Towson, a submarket attracting significant investment and leasing activity.

The purchase price for the building was not immediately available. Details about the new owner’s plans for the property, built in 1925, were also not available. CFG Community Bank previously owned the property, transformed the interior into Class A office space and sold it to Marust LLC for $1 million in 2012, according to Maryland property tax records.

Jane Frankel Sims

Jane Frankel Sims

“I realized that we were running out of space … and to lease the the amount of space I needed would cost $15,000 (a month in rent). I thought, ‘For that cost I could buy a building,’” Jane Frankel Sims, owner of Frankel Sims Law, said.

Frankel Sims, who grew up in Baltimore County, said she’s excited to be investing in Towson. The site also provides parking for employees as well as being a short walk from the courthouse, other law firms, and a host of amenities, such as restaurants.

The building is already in shape for a law firm and won’t require any significant improvements. Frankel Sims said the firm plans to do some minor work in the interior to provide a bit more of an edgy look to contrast with the building’s historic exterior.

Doug Brinkley and Charles Fenwick of Cushman & Wakefield’s Baltimore office represented the seller in the off-market transaction. Lizzy Sweeney and Bryan Wyatt, also of Cushman & Wakefield’s Baltimore office, represented the buyer.

Demand for commercial real estate assets is expected to increase this year due in part to tax changes championed by the Trump administration that provide incentives for commercial real estate investment.

Interest rates are also expected to continue to increase, spurring action on commercial properties. In the last two years, the Federal Reserve has increased interest rates seven times. The latest increase came in June, and rate increases are expected to persist in an attempt stave off inflation.

The Towson submarket, particularly the downtown area, has attracted a slew of new investments that, in turn, have led to new leases.

Early in 2018 CSG Capital Partners announced it purchased the 10-story Class A Towson Commons property for $18 million. The new owner intends to invest “millions” in improvements to the building that was 90 percent occupied at the time of the sale.

Chesapeake Real Estate Group and Cicero Capital Partners purchased 210 Allegheny Ave. in 2016, and invested $1 million in renovating the office building. That building has already landed two significant leases from Stanley Black & Decker boosting occupancy to 45 percent in early August.

Greenberg Gibbons, in partnership with Caves Valley Partners, restarted construction this summer on the $350 million Towson Row mixed-use project. That development will consist of 1.2 million square feet of new building, including office space, retail, and residential.

Brian Gibbons, CEO and chairman of Greenberg Gibbons, which is the owner and acting managing partner of Towson Row, shakes hands with the Tiger mascot from Towson University after the restarted project’s second groundbreaking ceremony (The Daily Record/Maximilian Franz)

Brian Gibbons, CEO and chairman of Greenberg Gibbons, which is the owner and acting managing partner of Towson Row, shakes hands with the Tiger mascot from Towson University after the restarted project’s second groundbreaking ceremony (The Daily Record/Maximilian Franz)

Towson had more than 4.89 million square feet of inventory and a net absorption of 65,305 square feet of space in the second quarter, according to a report by MacKenzie Commercial Real Estate Services.

Vacancy last quarter reached 12.2 percent, which was down from 12.6 percent year over year and a reduction for 13.6 percent in the first quarter. Asking rental rates in Towson during the second quarter reached $21.01 per square foot, up from $20.38 year over year, and $20.95 in the first quarter.

By comparison the similarly sized Annapolis submarket, which had more than 3.86 million square feet of office space last quarter, produced a net absorption rate of 20,783 square feet during the same time period.

Average asking rents for the Annapolis submarket were recorded at $27.83 per square foot, a negligible decrease from $27.84 to start 2018, but up from 27.29 the year before. Annapolis’ vacancy rate was 8.9 percent last quarter, down from 9.7 percent the quarter before, and 10 percent the prior year.

Frankel Sims said favorable financing and the surge of interest in downtown Towson made purchasing the business a sound investment.

“I feel like it’s a good time to buy in Towson … I feel like Towson is entering a boom,” she said.


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