Germantown office site sold by Manekin-Copley Deal may be prelude to liquidation of more of joint venture assets


In what may be a prelude to the disposition of more than $400 million worth of commercial real estate, a joint venture between the Manekin Corp. and Copley Real Estate Advisors has sold a Germantown office building.

Although the $8.5 million sale of the two-story project isn't expected to touch off an immediate wholesale liquidation of the Manekin/Copley portfolio, it foreshadows the coming wave involving the Boston-based pension fund adviser.

As various Copley investment funds mature -- such as Treasury bills or bonds -- the company probably will sell various assets in those funds to generate returns for investors. In all, Copley has more than $7 billion in assets under management.

But for Manekin, the maturation of the Copley funds is expected to reduce future development projects, a dramatic change for one of the 1980s' most prolific partnerships. Since 1981, the Baltimore developer and brokerage firm has jointly developed 4 million square feet of commercial space with Copley, nearly equivalent to all the office space in Columbia.

"At the present time, our relationship with Copley will be more in terms of a seller rather than a developer of new projects," said Richard M. Alter, Manekin's chief executive officer. "Is this the start of a wave? Yes, but it will be a gentle wave."

He added that the seven Copley funds that have developed or acquired projects with Manekin will be evaluated for potential sales over the next three to five years and that each building will be reviewed individually. Manekin, a privately held firm which generated record revenues of $9.4 million last year, hopes to participate in new Copley funds being created, Mr. Alter said.

In the case of Cloverleaf, the 82,000-square-foot building completed earlier this year was purchased by Rosecliff Realty Inc., a Washington-based investment firm that specializes in buying government-occupied projects.

The building, part of Manekin/Copley's 150-acre Cloverleaf Center, is fully occupied through February 2005 by the U.S. Department of Energy.

"This is consistent with the strategy we had at the entrance of the project," said John Moynihan, a Copley vice president who manages the 19-property fund that includes Cloverleaf.

The Manekin/Copley fund began developing Cloverleaf, approved for 1.4 million square feet of commercial space and 500 residences, in 1987 after buying the land from Fairchild Industries.

The building sold to Rosecliff was constructed at a cost of $7.5 million.

Mr. Alter said other Manekin/Copley projects in the Interstate 270 corridor are expected to be marketed for sale beginning early next year.

"From Manekin's perspective, we view this as a part of the life cycle of development that we do together with Copley," Mr. Alter said.

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