James Briggs, Staff
Cited Source: Baltimore Business Journal
The owner of the Hollander 95 Business Park would consider selling nearly half of the 51-acre complex if leasing continues to lag.
FRP Development Corp., which purchased the Baltimore business park for $4.35 million at a foreclosure sale in July 2010, as well as the surrounding land for $1.4 million in a separate transaction, has struggled to fill the site’s lone 82,800-square-foot building, FRP President David H. deVilliers Jr. said. Leasing the property’s vacant 42,800 square feet is crucial before FRP will construct new buildings, he said.
The business park, located at 62nd Street and U.S. Route 40, overlooks Interstate 95 from the city-county line, where it beckons economic activity. So far, though, the prime location has not sparked new development — nor kept afloat existing businesses — since FRP bought the complex.
One of the park’s three tenants, Sweet Sin Bakery, vacated a few weeks ago, citing economic hardship. More than half of the building is unoccupied.
“We just couldn’t make it happen, so we had to shut it down,” said Renee D’Souza, owner of the bakery, which provides gluten-free products to retail outlets in Baltimore and Washington, D.C. “Business didn’t pan out for us.”
Still, deVilliers said he thinks a quick turnaround is possible.
“Forty thousand feet is not a lot when it comes to warehouse office space,” he said. “It could be filled up tomorrow. Our average tenant size is about 30,000 [square feet] throughout our portfolio. We’d like to think the building will be filled up by spring and then we’ll start another one.”
Regardless of whether that happens, though, deVilliers said FRP Development also is working to sell up to 25 acres of the park. The company is negotiating with a hotel chain, he said, and would consider any offers that didn’t include plans to build one-story warehouses.
“The sensitive part of it is you don’t want to sell to somebody who’s going to be your competition,” deVilliers said. FRP builds warehouses in the 40,000- to 100,000-square-foot range, he said.
The land already has changed hands several times in recent years. Hollander Rock LLC, the original developer chosen by the Baltimore Development Corp., defaulted on an $11.7 million loan in 2010, resulting in an auction. Before that, the land was home to a troubled public housing complex.
FRP likely would ask about $300,000 per acre for finished lots, deVilliers said, but he added there are too many variables to provide an exact price.
The Baltimore Planning Commission in September approved a planned unit development, allowing for construction of light manufacturing, warehouse, office, retail and hotel buildings. The goal, deVilliers said, is to construct up to eight more buildings at the site.
Peter Dudley, a principal at NAI KLNB in Towson, which is marketing the business park, said it likely will take a mix of owners and tenants to fill the park.
“At the end of the day, the current owners would like to retain ownership of a bulk of the property,” Dudley said. “But they also realize that to sell a piece of property could get interest and activity going. If that’s what it takes, that’s what they’ll do.”
Interest has been fairly split among those looking to buy and lease space, he said.
Although the weak economy has stunted new development, deVilliers said that hasn’t surprised anyone.
“We are long-term holders of real estate,” he said. “We’re in it for the long term. That’s why we bought the property. We felt we had a good long-term view of the property. We knew the economy was bad and still is.”