October 2009

Strictly Commercial

Baltimore Commercial Real Estate News and Opinions

October 14, 2009

It’s not what you know.

It’s not who you know.

It’s who knows you.

(You heard it hear first.)

Gold And Company is an independent, boutique commercial real estate brokerage firm focusing on the Baltimore market.

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  Creative thinking, a substantial referral network, highly targeted marketing and enabling technology.

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 We are determined to provide our clients with excellence.

Long-Term Relationships

You probably know that commercial real estate has elongated time horizons.  It is not unusual for deals to take many months or even years.  Our relationship with Bond Transfer Company evolved over 16 years.

On a cold call, we initially contacted Robert and Buddy Constantine, the patriarchs of Bond Transfer, in 1993.  They were a major long-haul truck carrier using the I-95 corridor and were headquartered on a small lot with a small building in the middle of residential Locust Point.  They were trucking 53-foot, 80,000-pound rigs past hundreds of houses and children on tricycles.  This was not good.  The facility was too small and the mix of real estate uses – trucking and residential – was not compatible.

Bond Transfer wanted to move but only to the “right ” location.  After all, they had been based on Towson Street for over 40 years.  The search for a new home for Bond Transfer began.  If only we had known then what we know now.  Over the course of the next five years, we looked at an endless array of possibilities.  Because let’s face it, there are not a lot of properties for sale with the “right” physical characteristics at the “right” price.

In the middle of the process, Robert Constantine unexpectedly passed away.  It was a total shock and, of course, delayed the process.

Finally, we found the perfect property.  A local construction company was shutting down and they were disposing of their headquarters property on Belle Grove Road.  We settled in 1998 for $1.2 million.  A couple of months later, we sold the Towson Street property to a residential developer who built the first new set of townhouses in Locust Point in decades.

Fast-forward ten years to 2009.  The global economy is mired in the Great Recession and the trucking industry is hit particularly hard.  Bond Transfer, which narrowly escaped insolvency a few years prior, is forced into bankruptcy.  The family is under pressure to sell the property in order to pay down debt.  The next-door neighbor offers $2 million.

The family called in Gold And Company for an opinion.  We said we could do better.  Within a month, despite the bad economy, we received several offers.  We selected the buyer partially on price and partially on certainty, that is, which buyer was most likely to get the deal done.

The property has been remodeled with new furniture, new roofing and new flooring as well. For the floor remodeling epoxy was used on concrete, creating an awesome floor, they contracted Adhesives Lab for the job.

The property settled in June for $2.4 million, a 20 percent increase over the initial offer and a doubling of value over ten years.  By using our firm, the amount of increase in sales price was nearly four times the real estate commission. While the company became a liability, the real estate became the primary asset.

There are two morals to this story:

  • If you have a good commercial real estate broker, stick with them.
  • Overtime, commercial real estate is a great investment.

Closed Transactions

  • Bond Properties sold 5501 Belle Grove Road, Anne Arundel County, with an 18,000 square foot office and vehicle maintenance facility on 11.4 acres, to The Whiting-Turner Contracting Company for $2,400,000.
  • Haven Night Club leased 28,300 square feet of warehouse space at 201 North Haven Street in East Baltimore that they are converting into a nightclub.
  • Autopart International, a Boston-based distributor of auto parts, has now leased a total of 12 locations in Maryland. The four newest locations are Annapolis, Abingdon, Baltimore, and Frederick.
  • Bowman Educational Services, an educational testing and tutoring company, renewed its lease on Kenilworth Drive in Towson and relocated to Shaker Drive in Columbia.
  • Denrich & Bell, a local law firm, leased 1,100 square feet of office space at 301 Main Street in Reisterstown. The building is 70% leased with 2,200 square feet available on the first floor and 1,000 square feet available on the second floor.
  • The Red Carpet leased 3,000 square feet at Menlo Industrial Park. The 200,000 square foot business park is 98% occupied. Our only vacancy is 3,600 square feet with one loading dock.
  • Dempsey Uniform, a Pennsylvania-based company, leased 8,100 square feet from St. John Properties in the Caton Research Park for a transfer center.
  • First Continental Mortgage, a Florida-based company, leased 2,400 square feet of office space at 3600 Crondall Land, Owings Mills.
  • United Distributing Company leased 4,600 square feet of office space at 616 Main Street, Reisterstown.