And there is no end in sight, says John Black, president of MacKenzie Capital.
The Lutherville real estate company’s financial deal-making unit has been in full-tilt mode since 2019 with financing and debt-equity projects in the city and state and other areas like North and South Carolina and Florida. Their experience offers a local glimpse at a strong national trend for investment strategies.
“There’s so much capital and it’s looking for a home,” Black said during an interview with the BBJ this week. “It’s really been one of the upsides of the pandemic ever since this happened. Industrial, of course, is going through the roof and is the new darling child, and even though everyone is worried about retail, it is strong. A lot of disconnect created by the pandemic showed that there was a ton of money amassed and the market distress didn’t materialize.”
Black’s description of the 2021 market is evidenced in the large number of big Baltimore real estate deals that settled just before the year closed out including:
- The $267 million acquisition of The Rotunda and two other retail properties by MCB Real Estate.
- The $246 million sale of the Exelon tower at Harbor Point to Armada Hoffler.
- The sale of the luxury Bainbridge Federal Hill apartment complex to Brookfield Properties for $73.6 million.
- The nearly $70 million sale of the converted office space at 10 Light to luxury apartments downtown to FPA Multifamily LLC.
Those sales were fueled in part by private capital and are part of a national trend that showed publicly traded real estate investment trusts hit their second-highest year on record last year, according to a recent report by Nareit, a national trade group.
Black said markets like industrial, residential, self-storage and student and workforce housing have been hot commodities for private equity investors since 2019. Even marinas — long an outlier in the real estate investment landscape — are now attracting private equity interest. Retail real estate has attracted investors who plan to remake the shopping properties into medical or logistics centers.
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