HANOVER, MD-Baltimore-based Chesapeake Real Estate Group has decided that the suburban office market is ripe for a value add play and plans to acquire several properties in this asset class. It has just acquired a two-building, 26,000-square foot office complex from Corporate Office Properties Trust for $2.9 million and President Jim Lighthizer tells GlobeSt.com that the company has offers out on a number of other suburban office buildings in the Washington DC area. “We have found that there is value in suburban office right now because there is so little liquidity chasing it,” he says.
Lighthizer is not necessarily talking about the less scary suburban office assets — the transit-oriented buildings in walkable communities — which in fact are experiencing some demand.
Rather, he is looking for properties that have some rental income attached to it but also room for upside such as tenant rollover over or space being leased at below market rents. With some improvements, the building would then eek out more income, making the acquisition a win since it was purchased at a low valuation.
The COPT buildings, for example, consist of 1341 Ashton Rd., a 16,000 square foot single-story building that is 100% leased, and 1343 Ashton Rd., a 10,000 square foot single-story building that is currently vacant for a cumulative occupancy rate of 62%.
COPT acquired the properties along with six others as part of the Commons Corporate Center portfolio in 1999. It paid $25 million for the eight buildings.
Chesapeake Real Estate plans to invest $3.5 million in upgrades.
HANOVER, MD-Baltimore-based Chesapeake Real Estate Group has decided that the suburban office market is ripe for a value add play and plans to acquire several properties in this asset class. It has just acquired a two-building, 26,000-square foot office complex from Corporate Office Properties Trust for $2.9 million and President Jim Lighthizer tells GlobeSt.com that the company has offers out on a number of other suburban office buildings in the Washington DC area. “We have found that there is value in suburban office right now because there is so little liquidity chasing it,” he says.
Lighthizer is not necessarily talking about the less scary suburban office assets — the transit-oriented buildings in walkable communities — which in fact are experiencing some demand.
Rather, he is looking for properties that have some rental income attached to it but also room for upside such as tenant rollover over or space being leased at below market rents. With some improvements, the building would then eek out more income, making the acquisition a win since it was purchased at a low valuation.
The COPT buildings, for example, consist of 1341 Ashton Rd., a 16,000 square foot single-story building that is 100% leased, and 1343 Ashton Rd., a 10,000 square foot single-story building that is currently vacant for a cumulative occupancy rate of 62%.
COPT acquired the properties along with six others as part of the Commons Corporate Center portfolio in 1999. It paid $25 million for the eight buildings.
Chesapeake Real Estate plans to invest $3.5 million in upgrades.
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