Turner ready to open $170M Silo Point in Baltimore without any pre-

Daily Record, The (Baltimore), May 12, 2008 by Robbie Whelan

On Tuesday, when hundreds of black tie-wearing philanthropists gather in Baltimore to celebrate the 10th anniversary of the local chapter of George Soros' Open Society Institute, the site of their revelry could be the star of the show.

OSI organizers chose Silo Point -- a 24-story former grain elevator on the southern side of Baltimore's harbor, converted by Turner Development Group at a cost of $170 million -- as the site of their celebration, according to marketing materials for the event, because of parallels between the OSI as an "audacious" organization, and the "unprecedented views" from Silo Point's condos.

The condos don't go on the market until July, and officials at Turner Development Group are keeping mum about prices until June, but Tuesday will effectively be Silo Point's debut.

The event's attendees will be given tours of one of the lower- level units on the west side of the building, but The Daily Record toured Silo Point's penthouse units Friday, which, at 5,500 square feet, are larger than the average Baltimore row house, with waterfront views on three sides and floor-to-ceiling glass windows.

"When you're looking around you, you're seeing America," company President Pat Turner said of the view. "You're seeing commerce, you're seeing trains, you're seeing ships come in. Unlike the Inner Harbor, where you'll maybe see a water taxi, [here] you're really seeing an active port."

Turner said units in Silo Point will start in the low $300,000 range, but declined to elaborate on the rest of the pricing. Even with a soft condo market, Turner does not pre-sell units in any of its developments, he said, because of the potential for changes in the price of market-rate luxury square footage.

Bob Merbler, of Yerman Witman Gaines & Conklin Realty, which has sold condos in Turner's developments, said the Baltimore condo market reached its peak absorption rate in 2005, and that building a condo project without pre-sales is generally dangerous for lenders, because developers will borrow any money available to get their projects built.

"In this market, pre-sales, or pre-leasing, are pretty much required, but in the case of Silo Point, they have 'deep pockets Carlyle,'" Merbler said, referring to the Carlyle Group, a Washington-based private equity firm that is Turner's main equity partner for both Silo Point and his $1.5 billion waterfront renewal effort in Westport.

"In Pat's case, he has a friends-and-family list of people who have expressed interest [in buying into Silo Point]," Merbler said. "They'll burn through that list up front before they start taking new people."

Merbler's business partner, Cindy Conklin, said Turner has a track record for building with "cutting-edge" design and pricing his units in such a way that they sell quickly.

Said Turner: "The thing I tell everybody is that you make money when you buy, rather than when you sell. You have to be able to withstand any gyrations in the economy. What we're going through here is a part of the cycle. ...We bought this project right. We got it built for the right price."

Nearby luxury condos have been brought to market with price tags well into seven figures.

The recently completed, 192-unit Ritz-Carlton Residences, which owners will move into this month, has units listed from $1.2 million to $5.4 million.

Prices at developer Richard Swirnow's HarborView Towers start at just over $300,000 for an 800-square-foot, one-bedroom condo, and peak at $4.6 million for a 4,000-square-foot penthouse.

Another Swirnow development, the yet-to-be built Pinnacle tower, will charge $623,000 for a unit on the building's lowest level, and offers a custom-built penthouse for $7.2 million.

Turner bought Silo Point from agricultural giant Archer Daniels Midland for $6.5 million in 2003.

When it was built in 1923, the complex, which consists of a 290- foot-tall tower and 112-foot-tall silo building, was one of the biggest grain elevators in the world.

Silo Point has been converted into 228 condo units with five different floor plans, totaling 430,000 square feet, with a 600- space parking garage and ground-level retail space.

Turner is convinced that there is enough of what he calls "quiet money" in Maryland to provide ample buyers for his condo units. Silo Point, he says, is no bigger a risk than any other rehab he has done.

"Whether I have $100 to my name, or $100 million to my name, if I lose all of it, [I've] got nothing," he said.