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Commercial Development
ARUNDEL MILLS CORPORATE PARK
Description
Arundel Mills is a 20 acre mixed use, commercial office park. The project consists of two, 150,000 square foot class A office buildings, a 128 room Marriott Spring Hill Suites and a Goddard School Daycare. The project is located immediately across from the 1.4 Million square foot Arundel Mills Mall and within 5 miles of Baltimore-Washington International Airport and 3 major interstate highways.
Investment Highlights
In 2000 the Mills Corporation developed Arundel Mills Mall. As part of the master development plan several out-parcels were created to capitalize on the substantial amenities provided by the mall.
An unrelated developer gained control of the subject property and attempted to pre-lease office space in an effort to qualify for financing. The JPBE Team, having monitored this site and sub-market since the Mills Corp first announced its plans for the mall in the late nineties, performed due diligence with the expectation that a joint venture opportunity would surface. Shortly before the developer’s contract terminated the Team proposed a partnership structure that would provide sufficient financial support for commencement of the project as a speculative development. A joint venture partnership was formed to acquire and develop the land.
In 2003, JPBE believed that Fort George G. Meade would be a benefactor of the Base Relocation and Closure ("BRAC") process and combined with NSA, this unproven office park site would be extremely well positioned to capitalize on Department of Defense growth.
Transaction Structure
JPBE and its joint venture partners closed on the land in December of 2003 for $7Million. The project was funded through $900,000 of equity and $6.1Million of debt. With the financial strength of Mr. Bolduc and his construction partner, construction financing was obtained and the partnership commenced development of the first speculative office building.
Involvement and Value Added
The 20 acre site was originally designed for office development only. Due to its strategic location, the partnership identified opportunities to increase density with specific uses in mind. Working closely with engineers and county planning and zoning, the partnership’s efforts resulted in a project consisting of 240,000 square feet of office, 60,000 square feet of retail and hotel and daycare pads.
Additionally, with verbal mandates of the Federal Government’s General Services Administration and other branches of the federal government calling for occupancy of environmentally friendly (“Green”) buildings, the partnership elected to design the buildings with Green features. The benefits of this design included improved and healthier air circulation, increased natural daylight, utilization of biodegradable materials, raised floor systems and a natural irrigation system. This was the first major project in the submarket to utilize a "Green" design.
Exit
To date, completed development includes a 128 room Marriott Spring Hill Suites, a Goddard School Daycare and a 150,000 square foot mixed use office/retail building. Later this year, construction for the second 150,000 square foot mixed use building will commence. Upon stabilization of the second building, the partnership will assess economic factors and decide whether to hold the project for long term cash flow purposes or to package the entire project for sale through a competitive bid process.
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