Home / Real Estate / Private Sales Real Estate | Commercial Real Estate: Baltimore-Washington Industrial Market Rebounds
The Baltimore-Washington industrial market shows signs of recovery and landlords can expect rent increases over the next two years, according to several recent reports.
Net direct absorption, which doesn?t include sublet space, turned positive by 403,639 square feet during the first quarter for the Baltimore market, which stretches from Cecil County south to Howard and Anne Arundel counties, according to a new Cushman Wakefield report.
That follows 2010, when direct absorption was negative 257,286 square feet.
?A strong consumer base and significant presence of the public, education and medical sectors in the greater Baltimore-Washington metropolitan area continued to serve the Baltimore-Washington Corridor well as it alone accounted for a total of 771,428 [square feet] in new leases,? the report said.
User/owners of industrial sites are starting to cash in, with sales of 696,584 square feet in the first quarter, compared with 270,464 in all of 2010. Overall first-quarter sales, including by investor landlords, reached 1.7 million square feet.
The vacancy rate ticked down 0.2 percentage points to 11 percent. That?s down from 12.3 percent in the first quarter of 2010. There was 1.1 million square feet of leasing activity reported for the quarter, following 6.6 million for all of 2010.
Some of the boost in the Baltimore end of the corridor will come at the expense of Washington?s closer suburbs, such as Dade Paper?s move this month from Capitol Heights to 127,000 square feet at 7605 Dorsey Run Road in Jessup. LaSalle Investment Management bought the 612,900-square-foot Class A industrial building for $50.3 million.
Despite the growing recovery in the industrial market, developers have not responded by adding new space. New construction shows nothing but zeroes in every submarket, Cushman reported.
?The Baltimore industrial market is poised to continue its recovery in 2011 as leasing activity remained steady in the quarter and supply continues to be limited as no projects sit in the construction pipeline,? the study said.
Cassidy Turley?s report did not expect an overall jump in rates because ?tenant concessions are still prominent in the market and probably will be for some time.?
The Delta Associates Trendlines 2011 report noted that there will be a mismatch between demand and supply for the wider region, including Montgomery, Prince George?s and Frederick counties in Maryland and the Virginia suburbs. The report suggested that industrial investments would be a good bet for construction next year, noting that there is 3.7 million square feet of demand, compared with only 1.7 million square feet of industrial space planned or under construction for delivery by the end of 2011.
Cassidy Turley
awarded leasing
for Bethesda building
Cassidy Turley announced that Clark Enterprises has selected the brokerage firm as exclusive leasing agent for the Clark Building, a 296,123-square-foot class A office building in Bethesda.
The property, at 7500 Old Georgetown Road, is directly above the Bethesda Metrorail station on the Red Line. Cassidy Turley?s John Myers, Matt Sullivan and Jenna Polivka will represent Clark Office Building LLC, the building owner.
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?The Clark Building offers premium office space combined with on-site institutional ownership that provides a first-class tenant experience,? Meyers said.
Commercial real estate news items may be mailed to: Steve Monroe, The Business Gazette, 9030 Comprint Court, Gaithersburg, MD 20877; emailed to smonroe@gazette
.net; or faxed to 301-670-7183.
Camden Property Trust nears completion
on Landover project
Camden Property Trust plans to complete a 187-unit garden apartment complex in Landover in time for initial occupancy by the end of the year, according to a quarterly earnings report.
The $32 million project was started last year as the second phase of Camden Summerfield, which is across from the Morgan Boulevard Metrorail station on the Blue Line in Landover. The first phase with 291 units was completed in 2007 and is in the highest tier of the county?s rental market, according to a recent report released by the state Department of Housing and Community Development. Rents range from about $1,367 for a one-bedroom apartment to $2,597 for a three-bedroom unit spanning 1,369 square feet.
GM electric motor plant leads revival
in White Marsh
Auto manufacturing seemed to be a dying business for the Baltimore area when General Motors closed its Broening Highway assembly plant in 2005, but it is poised for a major comeback with the groundbreaking of a new factory in White Marsh, where at least 200 workers will build electric motors to power non-gasoline cars and trucks.
The Detroit auto giant said the $269.5 million factory will be part of ?a core business for GM in the development and manufacture of plug-in electric and hybrid vehicles.? The facility will be part of a ?green-powered? campus where GM already builds hybrid and heavy duty transmissions at a 471,000-square-foot factory that opened in 2000.
?We believe the future of sustainable transportation is electrically driven vehicles and this facility will help us maintain a leadership position within this category,? Mike Robinson, GM?s vice president for energy, environment and safety policy, said in a news release. ?It?s fitting that green ?motors of the future? are being built at a facility well recognized for ongoing efforts to reduce its environmental impact.?
The campus will be powered in part by a 1.23-megawatt rooftop solar array, which is expected to generate 9 percent of the plant?s annual electricity consumption and save about $330,000 during the life of the project. That will allow GM to offset up to 1,103 metric tons of carbon dioxide from entering the atmosphere each year, which is the equivalent to the emissions from 216 passenger vehicles.
Constellation Energy of Baltimore will build, own and maintain the solar power system, and GM will purchase all of the electricity generated by the solar panels under a 20-year power purchase agreement. Constellation Energy?s first solar array for GM was a 951-kilowatt system at its Fontana, Calif., service and parts operations warehouse.
The factory, which will have the capacity to double its work force, also is powered by an array of federal, state and county subsidies. GM received $105 million from the Obama administration?s economic stimulus package, $3 million from Maryland?s economic development fund and $6 million from Baltimore County.
?GM has continuously demonstrated its confidence in Baltimore County?s business community and the workers in White Marsh by adding new product lines that are transforming energy use and transportation efficiency,? said County Executive Kevin Kamenetz (D). ?This new plant means new green manufacturing jobs and represents significant investment in a sustainable future.?
Cordish sells Ocean City mall in $200M deal
Cordish Associates of Baltimore is selling an Ocean City outlet mall as part of a two-property deal worth $200 million, according to a quarterly report the buyer filed with the Securities and Exchange Commission.
Tanger Factory Outlet Centers of Greensboro, N.C., is buying Ocean City Factory Outlets, which the Cordish website describes as a $35 million, 200,000-square-foot mall with more than 40 stores. The deal, for $125 million in cash and the assumption of $75 million in debt, also includes a mall in Atlantic City, N.J.
Hagerstown Distribution Center sells for $8.5 million
IIT Acquisitions of Denver is buying a Hagerstown warehouse for $8.5 million, according to an SEC filing.
The 171,000-square-foot Hagerstown Distribution Center II, at 16604 Industrial Lane, is fully leased to Rust-Oleum, manufacturer of rust-preventive coatings and paints.
Montgomery council OKs $2M of $4M Costco subsidy
By approving a $2 million subsidy to the owner of a Wheaton shopping mall to lure a Costco store, the Montgomery County Council on Monday solidified giving more than 25 percent of a grant and loan program?s funds to a single company.
The council on Monday voted 6-3 to reject an attempt to derail a proposal to give $4 million over two years to Westfield Group, saying the county should not back out of an agreement.
During the course of 15 years, the county has distributed $24.13 million among 154 projects through the Economic Development Fund Grant and Loan Program, which provides financial assistance to private employers that create or retain jobs in the county.
Westfield Group, which owns Westfield Shoppingtown Wheaton, secured roughly one-quarter ? $6 million ? of all grant and loan program funds issued since the program began in 1995. It was one of three retailers that received funds; the other two received a combined $33,000. With the additional $4 million subsidy over the next two years, more than 30 percent ? or $10 million ? of the program?s funds and committed funds will have gone to a single company.
Reznick Group moves to new Bethesda location
Reznick Group, an accounting company with 400 employees, has relocated its Bethesda headquarters to new offices at 7501 Wisconsin Ave., Suite 400E, in Bethesda, according to information from the Ezra Co. of Bethesda.
Ezra President Glenn Meltzer said the Reznick Group is occupying more than 100,000 square feet on three floors in the building, which was the headquarters of Chevy Chase Bank before it was acquired by Capital One.
Reznick Group considered staying at its previous office at 7700 Old Georgetown Road, with a lease that expires April 30, 2012, but renewing would require major renovations to the company?s space and the building itself, Meltzer said.
McShea to be leasing agent for Silver Spring buildings
McShea Co. of Gaithersburg said it has been named exclusive leasing and management agent by Whitehall Business Archives of New York for TecHill One and TecHill Two in Silver Spring.
The two office buildings at 12211 and 12215 Plum Orchard Drive have a total of 143,000 square feet. Children?s Hospital and Mind Software are tenants in TecHill One, and TecHill Two is occupied by the 3MCorp., according to McShea information.
Staff Writer Allison Bryant contributed to this report.
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