In October 2020, at the height of the pandemic’s first year, John B. Levy & Co. rolled the dice and said lockdowns won’t last forever and office spaces won’t become obsolete forever. I bet deaf.
Only half of that gamble had time to be fully proven, but the Innsbruck-based company found a way to make a profit on its investment and did it sooner than expected.
Levy & Co. sold Old Dobbin Business Park, a 252,000-square-foot, six-building office complex in Columbia, Maryland this summer.
It traded for $37 million after Levy & Co. and Maryland-based investment partner Fernau LeBlanc. paid out $30.6 million within two years.
The company’s president and namesake, John Levy, said last week that the earlier-than-expected sale was caused by the unpredictable pandemic office market.
The Old Dobbin building was 75% leased when purchased. According to Levy, the plan was to gradually increase occupancy and sell the buildings individually over five to seven years.
But as lockdowns ease and the world slowly reopens, the group’s Plan A isn’t going according to plan, Levy said.
“The rent was current, but there was nobody in the parking lot, which is generally not a good sign for real estate,” Levy says. “Reese was anemic. Returning to office was affected by both Omicron and Delta (a variant of COVID). We just didn’t see many people coming.”
Then plan B.
Although well ahead of schedule, they tested the market for buyers and eventually found one suitor for their plan to transform all six buildings into a medical office complex. The transaction was completed in June.
Levy said his company always builds a contingency plan, which has become even more important in times of pandemics.
“We had a business plan and weren’t afraid to change it if the facts on the ground didn’t match what we thought we were going to get,” he said.
Outside of Maryland, Levy & Co.’s in-house investment department has been busy.
Close to Henrico’s home, the company is running Plan A at Windsor Business Park, a six-building office complex near Parham Road.
In 2016, he and Fernau LeBlanc purchased the complex for $32 million, planning to sell the buildings one by one. Following his $8.8 million sale of 8570 Magellan Parkway last month, the group has now sold four of his six buildings in the park for a total of $35 million. Two buildings and he said 20 acres of land are up for sale, Levy said.
The company also bet on a residential property in the city’s East End.Bought 130 units this summer Oakwood apartment villa, $10.7 million And we plan to convert these townhouse-style units into condos for sale at approximately $150,000 per unit.
Levy said the company’s own internal deals, like the Old Dobbin deal, come down to the purchase price.
“Loans are temporary. Foundations are permanent,” Levy said. “What you pay for something is permanent, so I wanted to buy something with a good (cost) justification.”