BALTIMORE – Trout Daniel & Associates, a full-service commercial real estate firm, is pleased to announce the exclusive listing of
5501 Pennington Avenue, a 41-acre (+/-) site. The property is comprised of four individual parcels and is improved by multiple free-
standing buildings constructed at varying times and measuring 140,325 (+/-) square feet in total.

Located in an Opportunity Zone, and eligible for multiple in-place Economic Incentives, the property is zoned M-I and I-2 and offers a
unique opportunity for prospective tenants to lease prime marine proximate industrial land and buildings in the land-constrained
Baltimore-Washington Corridor, with direct access to the Port of Baltimore waterways, CSX Railway, I-95, and I-695.
Cornblatt states, “This robust property has the unique ability to serve heavy industrial uses requiring direct deep-water access via
Curtis Creek for barges and on-site rail via CSX for rail uses coupled with adjacent bulk warehousing for material storage and
distribution.”

For more information, contact Steven Cornblatt at 443-921-9331, Jared Engel at 443-921-9342, Coleman Tirone at 443-921-9328, or
Peter Coe at 443-921-9322.

About TD&A:

TD&A, LLC is a full-service commercial real estate brokerage serving businesses throughout the mid-Atlantic and beyond. The firm
takes a highly-customizable approach to providing a full range of commercial real estate services, including brokerage, development,
consulting and management to the retail, office, industrial, multi-family, and investment market segments.
For more information, call: (410) 435-4004 or visit: www.troutdaniel.com.d

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We interviewed Trout Daniel & Associates (TD&A) Principal and commercial real estate veteran, Steven Cornblatt to give you all the information you need to move forward.

What are the benefits to buying?

Buying is more permanent than leasing and also allows the buyer, especially an owner – occupant, to control its own destiny. In addition, there are many tax benefits to owning versus leasing property. Consult with your tax advisor to learn how you can take advantage of available tax benefits. Finally, buying is especially attractive when interest rates are low, providing affordability for most business owners who are on a budget. 

What are the benefits to leasing?

Contrary to buying, the temporary nature of leasing provides a business tenant with more flexibility and optionality, including the ability to expand or downsize its operations on a locational basis.

In addition, as a tenant you can negotiate for concessions from a landlord that are not available to buyers of commercial property. Leasing costs are also deductible, so there are tax advantages there as well. 

Does the type of business matter when it comes to buying vs leasing?

Absolutely! A generic flex space can accommodate a whole host of different uses, from a 95% typical office use with 5% storage or a 95% typical warehouse or ‘plug and play’ assembly operation with 5% office use.

Generic spaces leased for office, flex and warehouse use can more easily relocate without prohibitive cost and time considerations. Leasing with that flexibility can be advantageous, whereas a manufacturer of heavy equipment, for example, will make a substantial investment into its facilities and equipment, thus making relocation both cost and time prohibitive.

Also, many business models are project-driven and intended to be more temporary. Remember, in the scheme of things, a 5- or 10-year project, while considered long term, is still relatively temporary. 

What considerations should business owners keep in mind when deciding whether to buy or lease?

First and foremost, business owners need to consider the purpose of the real estate required.

Secondly, availability of the right type of property, your budget and available funds for securing the right property for your business should drive your decision-making.   

Before jumping into the often complicated site selection process, retaining an expert tenant (buyer) representative, often referred to as a “tenant rep”, is highly recommended. Initially, your tenant rep should spend time with business leadership to understand the following:

1)     Your business

2)     Your intended purpose, goals and objectives for the required property

3)     Your site selection criteria for the right property

4)     Prioritization of your criteria

Your Site Selection criteria may include, but not be limited to your timing for occupancy, budget range, property size, storage needs, parking, exposure, loading, clear interior heights, size and capacity of utilities, proximity to major roads/highways and more.   

Once your Rep has a solid understanding of the above, they should provide a professionally prepared comprehensive market survey for your review, followed by a discussion to whittle down the list to the logical candidate properties.

The next phase of the process involves your rep contacting the listing agents and/or owners of candidate properties to best address any questions, concerns, or open issues regarding the candidate properties.

This phase helps to further reduce the candidate property set to a manageable handful so that the touring process is an efficient use of everyone’s time. The last thing you want to happen after all this work has been done is to arrive for a property tour only to learn a property doesn’t have, for example, the needed electrical capacity or correct number and size of loading dock and drive-ins.

Following tours, you’ll need to determine which, if any, of the candidate properties will work for your needs and within your budget, after which the parties will enter into negotiations for a lease or purchase.  

When Should You Buy or Lease Commercial Property?

Because buying is more permanent and financing requires a more in-depth study and evaluation process, a buyer should give themselves more time to go through the process.

Conversely, and largely dependent on the complexity of the requirement, leasing typically requires less time. From start to finish, I like to have at least 9-12 months for a buyer and not less than 4-6 months to go through the process on behalf of a tenant client.

If you have any questions about the often complex of buying vs leasing, contact Steven Cornblatt at TD&A. He and/or a member of his team will be glad to have a more in-depth discussion. You can reach him by phone at (443) 921-9331 or via email at scornblatt@troutdaniel.com

The post My Company Needs to Move – Should I Buy or Lease? appeared first on TD&A.

How does zoning affect where certain businesses can open?

Zoning is established and modified by your local government and basically determines what types of businesses can open where. When you first start looking for business locations with your commercial real estate broker, you’re going to want to check zoning codes in your ideal location to ensure that your business use is permitted.

Most zoning is designed by permitted use type, which might be retail, industrial, residential, etc. If your business is not within the permitted use for the zone, the code may provide for your use as a ‘special exception’ use. While it is possible to obtain these, you’ll likely need to go through a hearing with public input and meet certain additional criteria as stipulated by the local government.

When you look up the zoning, there are a few different situations that you may find:

•       You look up the property and the zoning code. When you check the zoning code, you’ll see the permitted uses listed in alphabetical order and your use is permitted.
•       Your use is not permitted under the zoning category for that property, but it is permitted in other zoning categories
•       Your use isn’t listed under the zoning code for that property or under any other zoning category available because it simply isn’t enumerated; perhaps it is a brand-new use. You may very well be able to use that property for your business, but you’ll need to go through a process to do so.
•       Your use isn’t allowed in that zone OR it’s technically allowed but some part of your business goes against the code. For example, you want to open a veterinarian office, which is allowed, but not if you’re boarding dogs overnight. If you perform surgery on dogs, even if you can open the office, you’re likely to run into an issue and may want to consider opening somewhere else.

Can a zoning change affect a business that’s already established?

Believe it or not, the answer here is “yes,” though it really depends on the situation. For example, let’s say that there a business is in a zone that permits it to operate. The land that the business is on is a three-acre parcel with a 10,000 square foot building on it, which gives the owner lots of room to expand.

As long as the zoning allows the use, the business owner can go in and apply for the permits to double the size of the building or build a new one, as long as they satisfy all the development requirements (such as parking, setbacks from adjoining properties, height of the building, etc.).

Now, let’s say the zoning gets changed to a use that no longer permits the type of business that’s on this land parcel. The business then becomes a nonconforming use. While the business can’t get kicked off the property, they can no longer make it significantly larger, either.

If the community is looking to get rid of a use in a specific neighborhood (for example adult entertainment uses), this type of zoning change can result in a long play to get rid of the current business use.

Another instance where zoning changes could come into play is if the property is rezoned and you want to sell your business that is no longer a permitted use. While you can sell that business under that use, if you were to close the business, the next owner may not be able to reopen it.

For example, let’s say you own a gas station and the zoning changes to no longer permit a gas station. You can continue to operate that gas station since you’re grandfathered in. However, if you close it and a specified amount of time goes by before somebody else purchases it and wants to reopen a gas station with the same building, same pumps, etc., the new zoning law may apply, causing the new owner to lose use status.

When do zoning changes occur and where?

The timeframe for zoning changes is different everywhere. Baltimore County has a fairly regular process, though. Every four years, they go through a comprehensive rezoning process. Anybody can request a rezoning of any property as long as they’re willing to pay the fee.

Different jurisdictions have different criteria for zoning changes. In Baltimore County, in the first year after the comprehensive rezoning, the only way to get a zoning change is to prove that somebody made a mistake, which is highly unlikely. In the three years after that, you would have to prove an error or changing conditions. During the comprehensive rezoning, you just have to convince the folks making the decisions that the proposed zoning category makes sense.

Do you have questions about zoning or want to know more about a specific property? TD&A (Trout Daniel & Associates) can help. Give Art Putzel a call at 443-921-9326 or reach out via email at aputzel@troutdaniel.com

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We’ll start by covering a few of the most basic zoning questions this week and follow up with some more in-depth information in our installment next week.

What is Zoning? 

Zoning is a set of laws and regulations, generally particular to a specific jurisdiction: a county, a city, or a township, which govern what uses you can put where and how those uses will be situated on the property. Zoning codes deal with both uses and development standards.

In the most simple terms, zoning regulates in one way or another what you can do where when it comes to renting or building a space for your business.

At this point, almost all jurisdictions have zoning. The important thing to know is that zoning is completely different in every jurisdiction. 

For example, your basic business zone in Baltimore County is called BL (Business Local). That’s just about the lightest common business zone that there is. Some other zones are more restrictive, but they’re a lot less common. 

There’s a lot of BL scattered around the county. BL presents a myriad of options for business owners. If you want to do a stationery store, or even a grocery store, you can do it in BL. 

However, if you were going to Baltimore City the names of the zones are going to be completely different, as are the permitted uses in those zones.  Baltimore City’s lightest busioness zone might be called C1 zoning, which is completely different from what Harford County or Howard County calls it. It’s critical to look at each county’s zoning code to see what’s permitted where.

What is the Purpose of Zoning

The purpose of zoning is to control the built environment and the activity within it. A relatively new example is when Baltimore City redid its entire zoning code a few years ago and created a specific adult entertainment district. The control is not so much over what the buildings look like as it is what goes on in them.

Another example: In Baltimore County, you can do a general merchandise store and a food store in a Business, Local zone. General merchandise would be like the old 5 and 10, but it would also be a Walmart since it sells general merchandise. 

If you could find a 20-acre site that was zoned Business, Local, you could put a Walmart on it. 

In Baltimore County, zoning is what’s called hierarchical. If business major (BM)  is the next step up from BL, the first line in the BM  zoning permitted uses says all the uses that are permitted in BL are permitted in BM plus the following uses. 

After BM, you then go up to Business, Roadside, which is generally the heaviest retail zoning. This zoning code says all the uses that are permitted in BM are permitted in BR, plus the following uses. If you’re selling, say, used cars as a primary use, you need to have that heavy retail zoning – BR zoning in Baltimore county. You can’t do used cars as a primary use in a Business, Local zone. So, in a Business, Local zoning category (a relatively ‘light’ business zoning), you can do a Super WalMart, but you can’t do a used Lamborghini dealership.   Which would you rather live next to?

The primary point of understanding zoning is that you can’t just say, “Okay, I want to do my business and I love that old house there so I’m going to locate my business in that old house.” You have to check and see whether it’s permitted, especially because zoning not only pertains to businesses, it pertains to residential, institutional, and, in fact all uses.

Ensuring That Your Business is in the Proper Zoning Code

Wondering if you can open your business in a specific building or area? You need to be working with a qualified Commercial Real Estate Broker. The experts at (TD&A) Trout Daniel & Associates can help. Give us a call today at (410) 435-4004 or reach out to Art Putzel directly at aputzel@troutdaniel.com.

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Which type of lease you agree to, either as a landlord or tenant, depends on your risk tolerance as well as what is more or less typical by property type. Below, we’ll explore the various types of leases you’re likely to run across depending on your business type.

The Types of Lease You’re Most Likely to Encounter

Absolute Net Lease

An absolute net lease is a lease where the tenant is responsible for everything. They pay rent to the landlord and handle all other expenses involved with operating the property. An example of an absolute net lease is a ground lease, where the tenant is technically leasing out the entire property, including any building, the parking lot and landscaping, whether it has a building already on it or not.

An example of this would be many fast food restaurants. The tenant rents the ground, constructs the building, and is fully responsible for anything that happens on the property. 

The tenant pays the real estate taxes. If the building is destroyed by a hurricane, it’s the tenant’s problem. They insure the property, pay for any repairs on the building, take care of snow removal and damage to the parking lot. Essentially, they are responsible for the entire property and any expenses that come with operating a business and property

We see absolute net leases frequently in the investment property market since they put the risk almost entirely on the tenant instead of on the landlord.

Gross Lease

In a gross lease, the tenant pays just the rent. All the costs of operating, maintaining, repairing, and insuring the property are the responsibility of the landlord.

The most common example of a gross lease is what the most common office leases used to look like. With a gross lease, business owners would often encounter a scenario where when you speak to the landlord, they tell you the rent will be x amount a square foot for the first year, and x+1 for the second year. These numbers would lock in regardless of any changes to the landlord’s expenses.

If a light burned out in your office, you called the landlord to handle the issue. If you had bugs in the office, you’d call the landlord and they’d pay an exterminator to come in and handle the issue. Regardless of how big or small the issue was, the landlord would handle it, shifting the risk to them and off of the tenant. 

In addition, tenants may have requested upgrades to the space with the lease renewal. This might be new carpeting or a reconfiguration of the space. The landlord would likely figure the costs of such upgrades into the lease rate, but the tenant wouldn’t pay for the carpet outright. All those costs were on the landlord.

With that being said, gross leases are much rarer these days since absolute net leases and gross leases are the two extremes. In between, you have a number of more moderate lease types. 

Modified Gross

While the names of leases may change, you can’t always count on the name being the EXACT definition of the lease. You still have to carefully read and review the entire lease, but the typical office lease these days says that in the first year, the landlord is responsible for everything just as they would be in a gross lease.

The landlord records the operating costs are for the whole building for that first year. Unlike a gross lease, in the second year, if the operating costs go up, the tenant is then responsible for the pro-rata share of the increase

Gross leases used to be the most common type of office leases, but in more recent years, modified gross leases have taken over. Costs began to get out of hand for landlords as utility costs rose and inflation increased. As a landlord, you don’t want to lock somebody in for a 10-year lease when you don’t know if you’re going to see a significant increase in your costs.

Triple Net Lease

A shopping center lease is likely to be a triple-net lease. where the tenant is responsible for the cost of most common area maintenance costs, insurance, and taxes. Typically the landlord retains responsibility for the roof and the structure, however, as with any lease, this isn’t always the case.

Diving a little deeper into common area maintenance, this includes the areas that are used in common by all the tenants, including snow removal, sweeping the parking lot, trash removal, etc. 

In a typical triple net retail lease, the tenant is responsible for pretty much everything that happens within their space, so if the lights in the store burn out, the tenant replaces them. If the toilet’s clogged, in theory, the tenant calls the plumber.

The tenant is also often responsible for paying their pro-rata share of insurance and taxes.

Modified Gross, Reading Into Leases & Assigning Risks

When it comes down to it, lease types are all about assigning and shifting risk by determining who is responsible for what. This is why it is critical to always read the lease carefully and see what you’re responsible for. 

As an example, let’s say you owned a shopping center. You could say the rent is $15 and you, the tenant are responsible for your pro-rata share of all these costs. The estimate of those costs in this case is $6 a foot. 

The tenant is going to estimate that the first year’s rent is going to be $21, but all of the risk is on them. If it turns out to be $24, it’s $24. That’s what it is; you, as a landlord, aren’t going to take on any extraneous costs.

On the other side, the landlord could say, okay, I’m going to charge you $21 and I’m going to take care of everything. Then the risk is on the landlord. If there’s an extra $3 worth of cost, it’s the landlord’s risk. It bears repeating that choosing lease types all comes down to the shifting of risk.

What to Look for in a Lease to Understand Your Risk

On the tenant end, when you look through the lease, you’re basically looking at your risk as well as the landlord’s risk. Most times, the landlord is going to try and lay as much risk off on the tenant as possible. 

The tenant, on the other hand, is going to try to make the landlord take as much responsibility as possible for the property. Even if a lease says upfront that it’s designed to be a triple net lease, for example, you still have to read the lease and see what costs you’re responsible for.

Whether you’re a landlord or a tenant, our team at TD&A can help you review and negotiate leases so that each party feels they have an acceptable amount of risk in a lease. Give us a call today at (410) 435-4004 or contact Art Putzel for more information.

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TD&A Represents StorageMart in Two-Property Baltimore Acquisition

November 22, 2021

Baltimore, MD – Steven Cornblatt & Coleman Tirone of TD&A announce StorageMart’s simultaneous purchase of Golden Ring Mini Storage & Ritchie Mini Storage. The facilities are located at 8821 Philadelphia Rd, Rosedale, MD 21237 & 20 Ertel Rd. Glen Burnie, MD 21060 respectively.

Cornblatt & Tirone represented StorageMart in this transaction; the Seller, subsidiaries of Mt. Royal Management, represented itself.

The two properties combine for 131,345 Net Rentable Square Feet, totaling 1,407 storage units and 105 parking spaces between the two facilities. These acquisitions come on the heels of StorageMart’s entry into the Baltimore market with their August purchase of 3000 Eastern Boulevard in Middle River.

States Tirone: “This acquisition shows StorageMart’s desire to enlarge their footprint in major MSA’s of the Mid-Atlantic, which certainly includes Baltimore. StorageMart never wants to enter a market with only one facility. They have acquired three properties in the Greater Baltimore Area in the second half of this year, and now have a total of five stores throughout Maryland. They are a fantastic operator whose resume speaks for itself, and they will continue to thrive in the current self-storage climate. I’m excited for what the future holds for StorageMart in Maryland.”

TD&A represents StorageMart in numerous markets throughout the United States, including the Mid-Atlantic Region. TD&A will continue its search for operating “off-market” self-storage opportunities throughout MD, VA, DC, DE, PA and WVA with an emphasis on Virginia and Washington, D.C.

For more information or to discuss other self-storage opportunities, contact Steven Cornblatt at 443-921-9331 or scornblatt@troutdaniel.com or Coleman Tirone at 443-921-9328 or ctirone@troutdaniel.com

About StorageMart

StorageMart is the largest privately held self-storage company in the world, headquartered out of Columbia, MO. They have over 245 stores throughout the United States, Canada, and the United Kingdom. StorageMart is a family run company that has been in the storage industry since the 1970s and brothers Mike & Cris Burnam serve as CIO and CEO respectively. StorageMart will continue to be aggressive in their acquisitions of operating self-storage facilities.

About TD&A

TD&A is a full-service commercial real estate brokerage serving businesses throughout the mid-Atlantic and beyond. The firm takes a highly customizable approach to providing a full range of commercial real estate services, including brokerage, development, consulting and management to the retail, office, industrial, multi-family and investment market segments. For more information, call: 410-435-4004 or visit: www.troutdaniel.com.

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Not only are these spaces great for accommodating businesses of all kinds, but they also bring a historical aesthetic to the space. Many consumers are drawn to the “upcycling” feel of these buildings, which can give your business a boost and help you establish a culture. 

Industrial spaces are in continuous demand. Below are some ideas to utilize a building by turning them into offices, retail spaces, and more. 

Create a Unique Design for the Building

Once you secure your space, you’ll have to figure out the floorplan for the business. Old buildings tend to have their quirks, so you’ll want to be sure that everything is up to code and working properly. For example, making sure the building has multiple exits, an accessible handicap ramp, an elevator are all things to consider while planning

You may also want to do something different with the layout than you have in other spaces. Consider surprising your customers, clients, or guests by flipping the way you would normally design the space or taking on a slightly different aesthetic for your brand. 

Incorporate period-true pieces and see if you can source anything from the original building or warehouse to maintain the character.

Be Sure to Stand Out

Retired buildings and large spaces are often broken down into smaller spaces and then leased out to several businesses. If all of the businesses just have little signs, your business may be overlooked. Add a distinguishable sign or entryway so that your customers know where to find you. 

Fill the Space

Old factories and warehouses tend to have high ceilings, brick walls, and a lot of floor space. If you’re not sure what to do with all of the extra room, consider a creative room divider or placing furniture in a way that helps direct the flow of the room. Most factories’ eclectic and industrial feel allows for a business to design in any way they want.

Another factor to consider is the acoustics of the room. Because these spaces tend to have very high ceilings, you’ll have to be careful about how the sound travels.

By using furniture, products, and other design elements, space can be dramatically transformed into something that appears to be brand new. 

Design the Interior & Choose A Theme

 Once you know where everything will go in your new office space, then it is time to start designing the interior. If your company or business already has a strong brand identity, then deciding on a theme should be a walk in the park. Using colors, fonts, furniture, and other elements, the “feel” of your business can be transferred into your business space.

 If you’re looking for something new and different for your retail store, restaurant, or office, a warehouse space may be just the change of pace you need.

Trout Daniel & Associates can help you find the perfect space. As a full-service commercial real estate brokerage serving businesses throughout the mid-Atlantic and beyond, we have extensive experience working with clients looking for unique and fun spaces.

Our firm takes a highly customizable approach to provide a full range of commercial real estate services. Contact us online today for more information, or give us a call at (410) 435-4004.

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Industry leaders are not giving up and predict that brick and mortar shops are here to stay. They just might look a bit different. Here are a few tips for tackling the commercial real estate industry in a post-COVID world.

Stay Flexible

When quarantine first hit, Americans and people everywhere were suddenly forced to work from home. Unsure of returning to the office, businesses started to adapt to a new way of life. While most companies learned that they could successfully run their businesses from home, others found it nearly impossible. This goes to show that brick and mortar shops and office workplaces will never go away completely.

This being said, staying flexible is critical right now. It’s also important to keep an open mind because you never know what you might be able to turn a space into with a business plan and a vision.

Be Patient

It will take some time for the world to return to normal, but it’s also going to take a while for small businesses to assess how to proceed post-COVID. With more and more small and large companies returning to their commercial retail space, it will take a bit to figure out what works and what doesn’t. You’ll need time to figure out exactly how much space you’ll need moving forward.

Whatever changes you may be implementing, be sure to be patient with your customer base. Commercial retail spaces and stores are not going anywhere anytime soon.

Be Willing to Change the Building Space

While some businesses may be cutting down on the amount of square footage they need, others are expanding due to social distancing protocols. With the rule being to stay six feet apart, retail stores and other businesses are expanding their floor space to accommodate long lines and wider aisles. If your commercial real estate space has tighter quarters, consider opening up the floor space to add to the area and expand your possibilities.

Stay Positive

It may not happen as quickly as we’d all hope, but things are going to get better from here. We have passed the lowest point of the U.S. economy, and if history has taught us anything, it’s that the U.S. economy always bounces back. Colliers even predicted that the office market specifically would see an increase by 2021, and strengthen again by 2022.

We hope you found this information helpful. TD&A is a full-service commercial real estate brokerage serving businesses throughout the mid-Atlantic and beyond.

Our firm takes a highly customizable approach to provide a full range of commercial real estate services. Please contact us online today for more information, or give us a call at (410) 435-4004.

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