Armada Hoffler Properties, the general contractor for the Harbor Point development, is set to acquire the Exelon building there at the beginning of next year.
The estimated $246 million transaction would give Virginia Beach, Virginia-based Armada Hoffler a majority stake in the 23-story, mixed-use building. Beatty Development, the Harbor Point developer, will retain a 10% stake in the property, according to a Tuesday news release sent by Armada Hoffler. The 444,000-square-foot office building includes more than 100 apartment units, retail space and parking.
Exelon Corp. leases 100% of the offices and most of the 750 parking spaces. It is located next to Armada Hoffler’s other investments: the Wills Wharf office building, Thames Street Wharf and 1405 Point Apartments. The company constructed the Exelon building in 2016, which serves as regional headquarters for Chicago-based Exelon, the parent of Baltimore Gas & Electric.
Armada Hoffler, a one-stop development, construction and real estate investment firm, said in the release that it expects a 7.4% return on the purchase after the first year. Shares of the publicly traded company rose modestly after Tuesday morning’s announcement, by a little over 1%, to around $15 a share, up from about $14.80 the day before.
Louis Haddad, the company’s president and CEO, said the firm will redeploy capital from the sale of three student housing assets into “higher yielding” assets.
“Master planned mixed-use developments in premier locations, such as Harbor Point, are central to our strategy,” Haddad said in a statement. “The acquisition of the state-of-art Exelon building further solidifies our Harbor Point footprint and is consistent with our long-term plan of building scale in the Harbor Point submarket.”
The company’s portfolio spans several states and includes the Annapolis Junction and the Perry Hall Marketplace on Belair Road. It began its construction duties at Harbor East in the 1990s and has maintained a relationship with Beatty Development in the years since.
The company also is developing the T. Rowe Price Group’s global headquarters at Harbor Point, which will feature mixed-use residential, retail, and parking garage space.