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In the latest evidence of how far commercial real estate values have fallen, PS Business Parks announced it paid $60 million for three buildings in the Shady Grove Executive Center, a portfolio that sold for $79.6 million in 2005.

The deal marks the third change of hands for the 350,000-square-foot complex in less than a decade. Seller BlackRock Realty of Morristown, N.J., had acquired the properties from TIAA-CREF, which paid $67 million in 2003.

But PS Business Parks, a national real estate investment trust in Glendale, Calif., takes over after BlackRock made substantial improvements and renovations in the complex. The three buildings — 9210, 9201 and 9231 Corporate Blvd. — are 80 percent leased to 17 tenants. Long-term tenants include Lockheed Martin, which leases all of 9231 Corporate Blvd. until December 2013 and has been in occupancy for 12 years since the building was completed. InvestorPlace Media leases 50,000 square feet at 9201 Corporate Blvd.

The acquisition value was below replacement cost of the buildings, according to CB Richard Ellis, which marketed the complex.

St. John Properties starts building at Aberdeen

St. John Properties of Baltimore said it started construction on three speculative office buildings with a total of more than 135,000 square feet at the Government and Technology Enterprise project, a 413-acre business community at Aberdeen Proving Ground.

The complex is designed to serve the needs of military and private contractors at the Harford County base, where the Army is relocating its C4ISR — command, control, computer, communication, intelligence, surveillance and reconnaissance — operations.

"The activity level and leasing success that we have experienced at The GATE over a relatively short period of time has exceeded our expectations, and we perceive market conditions as favorable to proceed with our plan for further development," Jerry Wit, the company's senior vice president for marketing, said in a statement.

"Our primary objective is to stay ahead of the office demand curve and we believe that interest will ramp up substantially in conjunction with the completion of the C4ISR facility," Wit said. "We are finding that tenants need rapid access to new office or research and development space to satisfy contract requirements, so we need to remain aggressive and proactive in our planning."

The 2.5 million-square-foot campus already has attracted numerous tenants for St. John, which is nearing completion of its phase 1 development of almost 350,000 square feet among six buildings. Phase 2 construction is expected to start in May.

Full-building leases signed at the complex include CACI International for 60,000 square feet and Raytheon and L-3 Communications for 75,000 square feet each.

Construction has begun on 6245 Guardian Gateway, a single-story building that will offer 31,280 square feet of Class A office space; 6165 Guardian Gateway, a single-story, research and development flex/office space with 51,120 square feet; and 6175 Guardian Gateway, which will have 54,120 square feet of R&D flex/office space on one level. All three structures — like all projects being built by St. John Properties at The GATE — are designed for silver certification under Leadership in Energy and Environmental Design standards for exterior and interior sustainability features.

St. John has the capacity to build up to 2 million square feet of the GATE project. The company also has the option to situate more buildings outside or inside the secure perimeter of Aberdeen.

Annapolis medical building sells for $3.75 million

A physicians group, Terra Properties, bought a former sports medicine building in Annapolis for $3.75 million, according to MacKenzie Commercial Real Estate Services, which represented the seller.

The new owners, Sanjiv Lakhanpahl and Joanne Cantero, will use the 14,844-square-foot building as a single-tenant medical office space. The three-story medical office building was formerly occupied by the Orthopedic & Sports Medicine Center, which recently relocated to the new Health Science Pavilion at the Anne Arundel Medical Center.

"The building was under contract within 30 days of being placed on the market and settled at a price very close to the asking price, just three months later," said Scott Wimbrow, a senior vice president and principal with MacKenzie, in a statement. "This speaks not only to the strength of the Annapolis market but dispels the notion that nothing is selling. The right property in a dynamite location will always be a good investment."

The sale represents the largest deal in Anne Arundel County this quarter, and the largest price per square foot deal, at $252.63, in the state, according to MacKenzie. Patricia Farrell, a vice president with the firm, is also on the deal for the seller, 108 Forbes Street.

Dennis Murphy of Murphy Commercial Real Estate Services represented the buyer.

Montrose park in Rockville acquired for $22.5 million

McShea & Co. of Gaithersburg said it represented the landlord, The Realty Associates Fund VI, in the sale of Montrose Office Park in Rockville for $22.5 million to 3200 LLC. The property consists of three buildings, 3202, 3204 and 3206 Tower Oaks Blvd., totaling 135,664 square feet.

McShea also announced that The Realty Associates Fund VIII has leased more than 90,000 square feet at Research Plaza in Rockville, with SunTrust Bank renewing its lease for 20,839 square feet for seven years and Thomson Reuters leasing 69,686 square feet for five years. With the SunTrust and Thomson Reuters leases, the building has an occupancy rate of just over 90 percent, according to McShea information.

Venable client gets $36M verdict in disputed project

Venable, a law firm with offices in Washington, D.C., and Baltimore, announced that a six-person jury in Montgomery County Circuit Court unanimously awarded its client The Penrose Group of Vienna, Va., more than $36 million for breach of contract claims arising out of the development of a two-tower, high-rise luxury apartment complex in Bethesda.

Penrose had the right to develop, build, operate and own the luxury apartment complex as a result of two ground leases it entered into with the defendants, entities owned by the Camalier and Davis families, according to Venable information.

The jury found that the defendants breached the ground leases, and in so doing interfered with the more than $115 million of construction financing and equity that had been committed for Penrose to complete construction.

The verdict allows Penrose to recover almost $23 million incurred in project costs, as well as more than $13 million in lost profits.

Memorabilia supplier expands in Jessup

JDS Industries, a supplier of plaques, trophies and sports memorabilia, is expanding in Jessup, according to Cassidy Turley, which represented the company in its new lease.

JDS has relocated to 8257 Patuxent Range Road, where it signed for 40,500 square feet, almost doubling the size of its former space.

"JDS is an example of a financially stable business taking advantage of a weak industrial market to grow profits. The business model nationally calls for larger facilities at discounted rents," said Michael Bosica of Cassidy Turley.

REEF represented the landlord.

Commercial real estate news items may be mailed to: Steve Monroe, The Business Gazette, 9030 Comprint Court, Gaithersburg, MD 20877; e-mailed to smonroe@gazette.net; or faxed to 301-670-7183.