Armada Hoffler Properties to Buy Exelon Building in Baltimore
The company has agreed to acquire a 79% interest and an additional 11% economic interest in the mixed-use asset, for a total value of $246 million.
BALTIMORE, MD – Armada Hoffler Properties Inc. has agreed to purchase a 79% interest and an additional 11% economic interest in the mixed-use Exelon building in Baltimore, MD for an aggregate acquisition value of $246 million.
Located in Baltimore’s downtown waterfront neighborhood Harbor Point, the 23-story property comprises 444,000 square feet of class A office space, 103 multifamily units, 38,500 square feet of retail space and 750 parking spaces.
The office component of the property is fully-leased by the clean energy provider, Exelon, which utilizes the office space as its regional headquarters. The company is pursuant to lease with a remaining term of 15 years, with 3% annual escalation. Exelon additionally leases 500 of the property’s parking spaces.
The multifamily component of the property is currently 96% occupied, and the property’s retail space is anchored by West Elm.
Built in 2016 by Armada Hoffler Construction and Beatty Development Group, the property is LEED Gold certified and the property’s interior is LEED Platinum certified; representing the fourth-largest LEED ID+C Platinum certified project in the nation.
The acquisition is subject to customary closing conditions, including satisfactory due diligence. Armada Hoffler Properties expects to close the transaction by the end of the Q1 2022. The estimated return on investment for the first year is 7.4%.
Beatty Development Group will retain a 10% ownership position in the property.
“Master-planned mixed-use developments in premier locations, such as Harbor Point, are central to our strategy,” says Armada Hoffler Properties’ president and CEO Louis Haddad. “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.”
Haddad adds, “In addition to being immediately accretive, this acquisition provides opportunities for future NOI growth through economies of scale and operational synergies with both existing and future assets. As we previously discussed, we intend to redeploy capital from the sale of our three student housing assets into higher yielding mixed-use assets. This accretive transaction accomplishes that goal in a major way.”
The Exelon building is situated near additional assets of Armada Hoffler Properties, including 1405 Point Apartments, Thames Street Wharf and Wills Wharf office buildings.