| Royal Transport Leases 44,698 SF in Baltimore CoStar / 11.15.10 |
| Market cycle SmartCEO / 10.15-21.10 |
| Towson tower set for $27M facelift to accommodate Mile One Baltimore Business Journal / 5.7.10 |
| Smart100 SmartCEO / 3.10 |
| Moving ahead Baltimore Business Journal / 8.14.09 |
| Corridor Reznick to merge with Hearn real estate firm Baltimore Business Journal / 7.17.09 |
Royal Transport Leases 44,698 SF in Baltimore
Hearn Burkley Signs Transportation Firm to Dundalk Marine Terminal
Baltimore Business Journal
November 15, 2010
Melannie Skinner
Royal Transport, a transportation company, signed a 44,698-square-foot industrial lease in Baltimore, MD.
Located in the Dundalk Marine Terminal Park, the single-story, 77,800-square-foot industrial building was built in 1983 and renovated in 2008. Aluma Systems occupies the remainder of the building.
David Dannenfelser along Mac McCulloch and Rob Freedman of Hearn Burkley represent the landlord, 2100 Holdings LLC. Jonathan Miller of MacKenzie Commercial Real Estate Services LLC represented the tenant.
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Market Cycle
Expert sees pockets of local real estate progress
Baltimore Business Journal
October 15-21, 2010
Jimmy Debutts, Staff
Robert Freedman
Hearn Burkley Commercial Real Estate
Title: Principal
Age: 43
Education: BA in communication and BA in political science from the University of Delaware, MBA from the University of Baltimore
Commercial real estate, like most sectors of the economy, is cyclical. Robert Freedman entered the field as the nation was emerging from a recession in the early 1990s. A principal at Hearn Burkley Commercial Real Estate in Baltimore, Freedman rode the boom waves of the mid- and late 1990s and again in the middle part of this decade.
Freedman said the recovery is moving slow but the commercial real estate market trends are trending positive.
BBJ: Is the worst behind us?
Freedman: Locally, in pockets. In 2010, it was much better than 2009. There are excellent pockets of recovery. There are leases being done in Howard County and Aberdeen. Those areas have seen activity. Aberdeen seems to be ramping up faster on [Base Realignment and Closure] because its had a head start.
BBJ: What are the projections for the local commercial real estate market for the rest of 2010 and into 2011?
Freedman: I think healthy companies are still looking for opportunities. We see steady deal flow through the rest of the year. Every time I think we’ve past it and it’s over, something else happens. It seems it’s taking longer than anyone expected. We think 2011 is going to be like 2010 – 2010 was a lot better than 2009. If 2011 is like 2010, it will be steady progress.
BBJ: What challenges remain in leasing vacant space?
Freedman: The biggest challenges would still be financing. Healthy companies are still looking for deals. It seems to be taking a while to get through the banking process. Rightly so, there seems to be more caution in lending.
BBJ: What got you into commercial real estate?
Freedman: I was in banking out of college and I met a commercial real estate developer and we jumped right in. We started a brokerage. The market was in another recession then.
BBJ: What did you learn from previous recessions?
Freedman: There’s always another cycle. If you just keep your head up and work on the fundamentals, slowly the market recovers.
BBJ: What are some signals that will tell us the industry is heating up?
Freedman: There’s always another cycle. If you just keep your head up and work on the fundamentals, slowly the market recovers.
BBJ: What are some signals that will tell us the industry is heating up?
Freedman: The main benchmarks are employment and inventories. As they restock their inventories, the warehouse industry rebounds first. People are doing everything they can to not increase their payrolls right now. Once they start adding to their payrolls, that’s typically the signal they will need more space.
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Towson tower set for $27M facelift to accommodate Mile One
Baltimore Business Journal
May 7, 2010
Scott Graham
Call it Extreme Makeover, Towson Edition.
A 12-story office building in the Baltimore County seat that has stood largely vacant for nearly a decade could soon be redeveloped into the new corporate headquarters of Mile One Automotive and become the centerpiece of the town’s ongoing transformation into a residential and commercial hot spot.
Baltimore developer Caves Valley Partners is nearing a deal to buy and renovate the 200,000-square-foot structure once known as the Investment Building into a glimmering office complex near the corner of York and Dulaney Valley roads with retail stores, restaurants and a garage under foot.
When the $27 million redevelopment of the property is complete, perhaps by the second half of 2011, the new Towson City Center is likely to house more than 500 Mile One employees, several other office tenants, an upscale restaurant, small retailers and about 300 parking spaces, said Arsh S. Mirmiran, Caves Valley Partners’ director of development.
But before the well-heeled development team can begin work on the project this summer, Caves Valley must close its deal to buy 1 Investment Place in Towson from AMG Realty Partners of New York, said Mirmiran, who declined to disclose the purchase price. The transaction should close this month, he said.
“This is one of the best locations in Towson — it’s not right by the [Baltimore County] courthouse; it’s not right by the beltway,” Mirmiran said. “This is sort of like the hole in the doughnut in Towson that needs to be filled.”
Mile One, the Baltimore-based auto dealership with 63 locations in the mid-Atlantic, plans to consolidate some existing office space in Greater Baltimore and beyond into three floors of the refurbished building, said Jim Smith, Baltimore County’s executive. Caves Valley Partners, which formed three years ago and counts real estate moguls Anthony W. Deering and Arthur H. Adler among its partners, intends to relocate its offices to the building, too.
Caves Valley also is talking with other retailers and restaurants — some local, some not; some chains, some not — about helping fill the remaining eight floors of Towson City Center, which will include about 155,000 square feet of leasable space, Mirmiran said.
Representatives of Mile One could not be reached for comment. The company’s CEO, Steven B. Fader, is chairman of Caves Valley Partners.
Officials with AMG Realty also could not be reached. But Timothy R. Hearn, CEO of Baltimore brokerage Hearn Burkley, which represented AMG in the deal, said the property owner marketed the 43-year-old building to several other developers, including some who considered the property for a hotel or residential use.
But selling the building wasn’t easy, largely because the Investment Building was the subject of lawsuits claiming it was a so-called “sick building” that exposed tenants to an infectious airborne disease known as Legionnaires. Those lawsuits either were dropped or found in favor of AMG, but not before most of the building’s tenants left in 2001 and 2002.
“The building definitely had a reputation for some environmental issues, but legally it was determined not to be a sick building,” said David Iannucci, director of Baltimore County Economic Development. “That may have been an issue in leasing; perception is reality for some.”
But with Caves Valley’s backing, the property will now join several other commercial and residential projects designed to change the look and feel of Towson. In addition to the 113,000-square-foot addition to Towson Towne Center that opened last year, developers also are building two new condominium and apartment complexes and work could begin later this year on Towson Circle III, the Cordish Co.-backed mixed-use project near the mall.
Each of these projects fits Baltimore County leaders’ strategy for getting more residents, retailers and restaurants — instead of more county government offices — into Towson. “One of the missing elements, though, was a strong business base,” Iannucci said. “We need more employers.”
It is not know whether Mile One plans to hire more workers after relocating, but Iannucci said the move will result in a “net jobs gain for Baltimore County.” The company employs about 3,000 throughout the country.
Mirmiran said Chesapeake Contracting Group will likely be the general contractor on the Towson City Center project. The building will be gutted down to the concrete and steel and rebuilt either LEED-certified Silver or Gold, Mirmiran said. The project could take a year to 18 months to complete, he said.
The help finance the deal, Baltimore County chipped in $1.5 million in job creation and construction grants and $4 million in loans. The state’s Department of Business and Economic Development contributed $2 million. The county’s money is contingent on Mile One maintaining a certain number of jobs in Towson for a certain number of years, but Iannucci did not know those terms.
Caves Valley also will use between $15 million and $17 million in recovery zone facility bond revenue. The $15 billion federal stimulus-backed program gives businesses tax-exempt bond financing for the renovation or construction of depreciable property in economically distressed areas.
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Smart100
SmartCEO
March 2010
Former Baltimore Ravens’ coach Brian Billick kicked off the 2010 Smart100 event held in Baltimore. A Smart100 CEO spans many industries from IT and government contracting, to staffing and public relations. With programs in Baltimore, Washington and Philadelphia, together, the Smart100 represent an elite group of CEOs - the thought leaders of today’s businesses.
Hearn Burkley recently joined the SmartCEO program, which recognizes 100 CEOs based on their leadership, strategic vision and character in running a business.
For more information on Smart100 click here.
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Moving ahead
Real estate exec positions firm for growth
Baltimore Business Journal
August 14, 2009
by Wesley DeBerry Staff
Timothy R. Hearn is a fourth-generation Baltimore real estate broker. His father and uncle still work in the industry.
But the CEO of Hearn Burkley long ago stepped out of his family’s shadow to make his own mark on the local real estate industry. He is trying hard these days to seize opportunities in a downturn that has forced many real estate firms to change the way they do business.
His latest endeavor is his firm’s merger with Corridor Reznick LLC, one of Baltimore’s largest real estate brokerage firms. Corridor President Robert Freedman and about 10 other employees joined Hearn’s brokerage and property management firm. The company manages more than 11 million square feet of commercial space.
The Baltimore Business Journal caught up with Tim Hearn to talk commercial real estate, his career and life.
BBJ: What has been the hardest part of combining personnel in the merger?
Hearn: It’s actually been very complementary. It’s almost like you took football players from two different teams and put them together on the same team. Once everyone is on the same team they start thinking the same way and working together.
BBJ: If you could own any piece of commercial real estate in the world, where would it be?
Hearn: Sixteen hundred Pennsylvania Ave. [The White House] It’s got tremendous demographics, it’s got great foot traffic. It gets a new tenant every four to eight years and it has an unlimited capital budget. Those are pretty good things for starters.
BBJ: What challenges does commercial real estate face with the economic downturn?
Hearn: Any property owner that made acquisitions from 2004 to 2008 or financed debt based on evaluations from that time is having to recognize a decline in their property value anywhere from 10 percent to 40 percent. The challenge is that the historic banking relationship has changed because the bank is on the sidelines because of its own capital needs.
BBJ: Are you seeing signs of recovery in the commercial real estate industry?
Hearn: I think that there is recovery in areas that have benefited from federal government stimulus money.
BBJ: What has been the lowest point of your career?
Hearn: The recession of the early 1990s. It was crippling and it caused a lot of heartbreak and financial agony for people who we did business with. Having barely survived the low point of the early 1990s, we feel like we have positioned ourselves well going into the next cycle.
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Corridor Reznick to merge with Hearn real estate firm
Deal combines two of region’s largest brokerages
Baltimore Business Journal
July 17, 2009
by Daniel J. Sernovitz Staff
Corridor Reznick LLC, one of Baltimore’s largest real estate brokerage firms, will merge later this summer with another firm founded by former KLNB Management LLC President Timothy R. Hearn.
Corridor President Robert Freedman and about 10 other employees will join Hearn’s brokerage and property management firm, Hearn Burkley, and will work out of that firm’s Joh Avenue offices in Southwest Baltimore. No money changed hands in the deal. Details, including what the firm will be named after the merger is completed, have not been worked out.
“The intention is really to put the two firms together and hope one and one make three,” said Freedman, who will be a principal in the new firm.
CEO Neil Katz will not be part of the new firm but will be an affiliated broker. Katz said he will play a role with the new firm, including servicing his Corridor clients, but wanted to focus less on brokerage and more on investment sales.
“We were not forced [by the recession], in any way, to make this decision,” Katz said. “But because of the economy it made us sit back and try to reflect on what we had and what we wanted going forward.”
The Reznick Group will sever it relationship with Corridor and remain a separate entity in its offices at 500 E. Pratt St.
Meanwhile, Corridor already has listed its 5,000-square-foot waterfront office space at 500 E. Pratt St. for sublease.
Freedman and Hearn said they began discussing the alliance about two months ago. The move helps beef up Hearn Burkley’s brokerage business, which was started as an outgrowth of the property management company Hearn formed after splitting from KLNB LLC in December 2007. Hearn Burkley has about 11.5 million square feet under management.
Corridor is ranked 11th among the Baltimore Business Journal’s List of largest commercial brokerages, with a portfolio of about 5.3 million square feet. The firm was founded as Corridor Commercial Real Estate Group Inc. in 1989 by Katz.
Joining Freedman at Hearn Burkley, the region’s fourth-largest property management firm, are: Corridor brokers Mordy Itzkowitz, Lindsay McClory and Brian Siegel. Chairman Michael Glick and principal C. James Silfee III will work as affiliated brokers for the firm and continue to represent their clients through the new entity. Other brokers have not yet decided whether to join the new firm.
The merger is the latest reshuffling of downtown Baltimore’s power brokers, and it’s the most significant since Cushman & Wakefield of New York severed its ties with MacKenzie Commercial Real Estate Services LLC of Lutherville in January 2007.
The brokerage and development community has been abuzz about changes at Corridor for the past several months, shocking many real estate experts because of Corridor’s history and depth of experience.
“When I first heard of it, I was a little surprised because they have a group of experienced, seasoned professionals, and they’ve been around for a fairly long time,” said Gerard J. Wit, a senior vice president of marketing for St. John Properties. He said the combination of Corridor’s brokerage team and Hearn Burkley’s property management businesses could be a good fit for both.
Among its notable deals, Corridor represented Raytheon Solipsys in its headquarters lease of 44,000 square feet in Fulton in October 2006.
Other deals included:
• Representing Peter Angelos’ real estate portfolio, including One Charles Center in downtown Baltimore;
• Representing Howard County in its lease of 106,000 square feet of temporary office space in Columbia;
• Representing Ulma Formworks in its lease of 107,000 square feet in Jessup.
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