At the dawn of the era of the 2020 Pandemic, commercial real estate sales racked up the third best quarter over the last 21!
Welcome to a new decade! Who knew what was going to be in the cards for Frederick County land and commercial real estate, after 2019 closed out as a blowout record setting $600 million year? Over the last 5 years, CRE sales volume averaged a mere $85 million per quarter … then came Q4 ’19 with a jolt of over $300 million in closed deals. Clearly a nice way to close out the first 20 years of the new millennium.
It seems that the only a pandemic could stop the surge! Well, I guess Q1 wanted to show that it still had something left in before something like that would (DID) happen. With a total of 43 closings (5 more than the average per Q), over $153 million of deals changed hands. One of the interesting statistics from last quarter was when those closings occurred. Consider 22 closings in January, then 17 in February … and meager 4 in March! (makes one wonder about April … hmm).
All that stated, let us look at what made Q1 of 2020 so good.
As usual, nowadays it was the deals in excess of $10 million that dominated the landscape of this period. While there were only 5 closings that took place, those transactions accounted for 85% of the entire volume. In other words, $131 million were absorbed in 5, and the remaining $22 million was disbursed over the other 38. Other than Q4 ’19, that makes it the most unbalanced quarter … probably ever in Frederick County land and commercial real estate sales history.
Three asset classes played a dominate role in the top five deals of last quarter:
There were two.
- The deal that topped Q1 sales was the sale of the 448,000 square foot complex of buildings spanning 41 acres in and around Spectrum Drive near the Francis Scott Key Mall. 270 Technology Park (Maryland) acquired the property, in February of 2015, for $20 million. On March 19, 2020, the project re-traded to 270 Technology MFS-ABS Frederick for a cool $43 million.
- Local real estate broker Roland Castle and partner members from his company Real Estate Teams who comprised of an entity known as Creekside Plaza LLC sold the 50,600 square foot office-building portion of a project, which they developed more than a decade ago. The property sold on January 31, 2020 at a price of $11,750,000 ($232/SF).
There were two deals here … too! But, in this case, the same purchaser picked up the tab on two reasonably new hotels located on Buckeystown Pike. I say the same purchaser, because the name behind the scenes is the one and only Peter Plamondon, Jr., who happens to be the co-president of Plamondon Companies, a locally owned company that has risen to be Frederick County’s premiere hotel magnet … and we can’t forget the same team that acquired the Roy Roger Restaurant business from Marriott decades ago to revive it into a bustling regional franchise.
Plamondon established two new ownership entities. Executive Way Hospitality I LLC acquired the 86,950 square foot Homewood Suites at 4950 Westview Drive for $17,570,000 ($202/SF), in January. On the same day, Executive Way Hospitality II LLC purchased the newer adjoining property at 4850 Buckeystown Pike for $18,560,000. Known as Home2 Suites, the property contains 67,460 square feet ($275/SF).
The final deal of Q1’s top five was clearly a much better kept secret by the Frederick County Office of Economic Development than that of Kite Pharma’s acquisition in Q4 of 2018 of 20 acres in Urbana for a 280,000 square foot state of the art cutting edge cancer research facility! (wink, wink, Helen and Jan).
In another January closing, Kroger in partnership with Ocado Group, the world’s largest online grocery retailer, acquired the former Toys-R-US distribution center located at 7106 Geoffrey Way, off Md. 85. According to the tax records, the property 689,000 square foot warehouse is situated on 57 acres. At a price of $39,675,000, the new facility will be a state-of-the-art high-tech fulfillment center (robotics and all that stuff!) and will create about 500 jobs in Frederick County.
I must say, truly a great snag for our county!
Always tune into the MacRo Report Blog for a deeper look into the all things that impact the local commercial real estate market … and if you are in need of land and commercial real estate services, please give us a call!
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.