MacRo LTD Blog

Top 10 CRE Sales of 2019

While multifamily continued to lead the way with the highest volume, major retail center transfers finally came of age last year.

As stated in last week’s blog post, the 4th quarter of 2019 powered out over $600 million in commercial real estate transfers, which, in that one period, exceeded average Frederick County quarterly CRE sales by a factor of six!

Out of the top ten sales for the year, Q4 equated for nearly 70% of the volume of that elite slot with $255 million in sales in a mere 6 deals.

Four large multifamily projects accounted for $188 million of the big ten, and 5 well known retail centers turned over for a total of $169 million, which exceeded all retail transfers in 2018 by a factor of five.

The one non-retail or non-multifamily deal in the top ten, actually received more press and buzz than the other nine combined.  It was the smallest deal to qualify in this elite group, at a price of $17,000,000, in November of last year.  As noted in last week’s post, Frederick Health acquired the former State Farm Headquarters campus on Monocacy Boulevard.  The specific plans for the use of the 300,000 square foot situated on 93 acres have yet to be announced.  The word is that there are no plans to relocate the existing hospital campus on 7th Street downtown for the foreseeable future, and that the campus will likely house a multitude of ancillary and administrative services for the 3rd largest employer in Frederick County.

The largest transaction of 2019 was the sale of the 5-year-old Prospect Hall Apartments, which is comprised of 13 garden-style buildings with a total of 376 luxury style Class-A units.  The property last traded in 2017 from the Matan Companies to HASTA Capital for a price of $72.2 million.  HASTA yielded a nice return after a two year hold, when it flipped it to an Eldersburg, Maryland entity registered as Rachuba Prospect Hall, LLC in November for a cool $86 million.

The other three top multifamily deals for 2019 were well detailed in each of the Q1, Q2 and Q3 top CRE sales MacRo Report Blog posts, which combined totaled $102 million.

Out of the top 5 retail trades, only one of these closed before the 4th quarter of 2019.  As highlighted in our previous post entitled The Quarter of Re-Trades, the newly occupied At-Home furnishing store located at 1811 Monocacy Boulevard closed for $17.2 million, after selling for $7.2 mil a year earlier.

The remaining retail centers that closed signaled that various owners of several of Frederick’s leading retail centers looked to take some profits:

  • Frederick Crossing Shopping Center located on Guilford Road was built in 1999. It is well known for its major tenants, being Best Buy, Kohl’s and Ross.  The 295,000 square foot center on 29 acres sold in October of last year for $34,700,000.
  • Clemson Corner Shopping Center, well known for Wegman’s and Madrones Restaurant among many other smaller retailers, traded in December for $67 million. The buildings total 217,295 square feet and sit on 23 acres of land.
  • Market Square, built between 2012 and 2014, is located just across the road from Clemson Corner and transferred from the original developer, JBG, for $27,400,000 on November 18th of last year. It consists of three parcels on Osprey Way and Shorebird Street and contains a total of 187,000 square feet on 18.24 acres.  It offers a cadre of high profile tenants, including Onelife Fitness, Pier 1, HomeGoods, Petsmart and any number of popular chain restaurants.
  • Frederick County Square, one of the Golden Mile’s pioneer retail centers from that area’s “Golden Age” of the early 1970’s, was transferred out of the portfolio of DC based Washington Real Estate Investment Trust after 24 years of ownership. It sold the 217,000 center on 20 acres for a price of $22,500,000 ($105/SF) on October 3rd.

Without a doubt, CRE sales in 2019 set a record like no other, in the history of Frederick County land and commercial real estate statistics … and without a doubt, I am sure that both Mayor Michael O’Connor and Frederick County Executive, Jan Gardner, are thrilled with the fact that transfer sale tax revenues are nearly twice that of the average of the last 5 years!

Can we expect that 2020 will blow the numbers out of the water again?

We’ll just have to wait and see!!!

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Rocky Mackintosh, President of MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland, has been an active member of the Frederick community for over four decades. He has served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012.  He currently serves as chairman of the board of Frederick Mutual Insurance Company. Established in 1843, it is one of the longest enduring businesses in Frederick County.

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