Investor has his sights on real estate in business district

December 18, 2005|By DANIEL J. SERNOVITZ


Venture capitalist and real estate investor John R. Laughlin has set his sights firmly on Hagerstown's business district, and he is hoping others like him will take notice.

"I think it's important for somebody to stand up and say, 'We're taking a new stock in the city,'" said Laughlin, CEO of Ridgecrest Investments Inc. of Frederick, Md. "For us, it's important to be close to the downtown. We believe in downtowns. We believe in Hagerstown's downtown."

On Dec. 9, Ridgecrest bought a four-story office building at 44 N. Potomac St., next to Hagerstown City Hall, for $1,025,000. The acquisition was the firm's fifth major commercial real estate purchase within the city in little more than a year.

The firm's first foray into the market was in July 2004, when it bought the former Goodwill warehouse on North Prospect Street for $200,000.


Since then, Ridgecrest has bought Laber's Office Furniture at 125 E. Baltimore St. in October 2004 for $200,000, Action Products Inc. at 22 N. Mulberry St. in March for $1,035,000, and the former National Guard Armory on North Potomac Street in June for $20,000. As part of the Laber's acquisition, Ridgecrest also bought Laber's office furniture business for another $200,000.

The firm primarily has focused in the past on Frederick, and it owns or has equity interest in several buildings and businesses there, including the Frederick SportsPlex and the Accutech Career Institute.

Laughlin said he became increasingly interested in Hagerstown with the area's recent housing boom and soaring land prices.

As he did in Frederick, the former lawyer-turned-developer is hoping to help startup, service-related businesses and encourage hopeful entrepreneurs to set their sights on Hagerstown.

"The number of jobs that we'll create in downtown Hagerstown over the next 10 years is very, very large," Laughlin said. "If we can improve the commercial area, which certainly is our focus, the residential will follow as well."

Laughlin founded Ridgecrest, which balances its resources between real estate investment and business development, in 1996. As a venture capitalist, Ridgecrest has helped finance the establishment of several companies in the Frederick area, including Security Trust Co. Inc., a provider of self-directed retirement plan services, and Cashbox LLC.

"Without us, they wouldn't have had space. They wouldn't have had capital," Laughlin said. "What you're seeing, we think it's going to be the same level of business expansion in (Hagerstown)."

'A real beautiful picture'

Frankie Corsi, chief financial officer of Ridgecrest and a Hagerstown native, said site selection has been an important part of what his firm has been able to accomplish. He said the company looks to find large, undervalued commercial spaces that can be converted into office space sizable enough to accommodate a large number of tenants and recover the firm's investments in a relatively short time.

The Laber's building, at 20,000 square feet, is the smallest of Ridgecrest's properties. Its largest, the Action Products building, is 78,000 square feet.

Corsi said the Goodwill building has proved to be a more significant challenge than first expected. Because it was set up as a warehouse, he said Ridgecrest needed to entirely renovate the interior of the building in order to convert it into office space and bring it up to building codes.

In addition to the interior issues, Corsi said Ridgecrest wanted to alleviate security issues by upgrading the lighting on the building and installing a new security fence around the property.

Once the work is completed, Corsi said he believes the Goodwill project should help spur additional investment by neighboring property owners, a process he said already has begun in the downtown area with both commercial and residential properties. He said he hopes to sign the first of the building's tenants next month.

"You look at parts of the town and they're very nice." Corsi said. "The other parts are going to take care of their selves. There's significant investment going on in the city of Hagerstown, and I don't think people realize that it's happening. People are investing in Hagerstown. If the people just sort of slow down and take a look at what's here, they'll see a real beautiful picture."

A residential possibility

Corsi said changes similar to the Goodwill building are under way at the armory, though Ridgecrest is in the process of determining how to make the best use of the armory's sizable gymnasium space.

Unlike the other buildings, Laughlin said he is considering converting the Action Products building for use as residential, loft-style condominiums once Action Products moves into a new building on Sweeney Drive.

"We've never done anything residential, so that would be something different for us," Laughlin said. "We can keep the price of those units relatively low, and that would start to attack the affordability issue."

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