A Houston commercial real estate company has sold its portfolio of eight downtown Baltimore office buildings, including Brown's Arcade on North Charles Street and the Equitable Building on North Calvert, for $29.5 million to developers and investors in Montgomery County.
Boxer Property closed yesterday on the deal to sell the eight Class B buildings - typically older properties that lack modern amenities - which have a total 530,000 square feet of office space, said Andrew Segal, Boxer's president.
The buyers were a joint venture of Bresler & Reiner Inc. of Rockville, a publicly traded company that develops, manages and sells commercial properties in Washington, Orlando, Fla., and Philadelphia; and Richard W. Naing of RWN Development Group in Potomac. Naing is also a senior vice president with CB Richard Ellis Inc.
The deal is the second in a week involving major downtown properties. On Oct. 25, Mercantile Bankshares Corp. announced it had agreed to sell its 21-story Charles Center headquarters to Harbor Group International of Virginia for $51.2 million. In September Harbor Group purchased a 16-story Class B building at 10 E. Baltimore St. for $16.4 million.
Segal said Boxer decided to sell most of its holdings here because of strong interest from investors in the Washington area in the properties, which were all close to 90 percent occupied.
"We have a general company mission of trying to balance what we're buying with sales," Segal said. "There wasn't any particular reason to sell in Baltimore, but there was certainly a lot of interest from the investment community."
Boxer had purchased seven of the buildings in 1998 and added the Equitable building at 10 N. Calvert St. in 2000 and boosted occupancy by offering rent discounts and leases that can terminate with 24 hours' notice. The company is known for buying old, even historic buildings, and investing just enough to draw tenants.
Neither Naing nor Sidney M. Bresler, Bresler's chief executive, would comment on the deal. But in an announcement of the acquisition last night, the Bresler company said it assumed an $8.5 million mortgage on one of the buildings and took a $15 million mortgage on the other seven.
The balance was paid out of the capital of the joint venture with Naing. Bresler & Reiner and Naing each contributed $3.5 million in equity to the joint venture, with Bresler also contributing another $1.5 million.
Boxer remains committed to investing in other Baltimore properties, Segal said. The company still owns some parking garages and rental homes, he said.
Besides 10 N. Calvert St., the other properties sold yesterday were the Maryland Trust building at 16 S. Calvert St., the Title building at 110 St. Paul St., the Katz building at 111 N. Charles St., the Keyser building at 207 E. Redwood St., 300 Cathedral St., 301 N. Charles St. and Brown's Arcade at 326-328 N. Charles St.