For More Information Call 410.821.8585

Map: Office Submarkets

Quarter Highlights
  • Wells Core Office Income REIT Inc., a Georgia real estate investment trust, purchased the 200,600 sf Franklin Center Building during the last days of the quarter for approximately $65,000,000. SAIC is the lead tenant at the building.
  • Boeing opened its new Cyber Engagement Center (CEC) in Annapolis Junction. The 32,000 sf facility will provide a collaborative environment where security experts work together to address current and evolving cyber security challenges.
  • Financial institutions Wells Fargo, Hannon Armstrong, and RBC will be opening branch offices in 2012 for a total of 23,000 sf at Annapolis Towne Centre. Their addition brings the 46,000 sf, Class A office building to 85 percent occupancy.
  • A pair of high profile leases was signed at 185 Admiral Cochrane; the FBI signed a lease for 10,000 sf while the Navy signed on to take 70,000 sf. Both agencies are expected to occupy the space in mid-2012.
  • Maryland Higher Education Commission will vacate approximately 20,000 square feet at 839 Bestgate Road in Annapolis to relocate to 11,400 sf at 6 N. Liberty St. in Baltimore. The higher education regulatory agency's new space will house approximately 56 employees
    The State of Maryland has acquired the 117,000 sf, four-building medical campus at 2600 Liberty Heights Ave in Baltimore, MD for $6,800,000.

Market Outlook

By Anirban Basu, Sage Policy Group

Baltimore Area Office Market Ends 2011 with its Best Quarter

Like the broader economy, the fourth quarter turned out to be the best one for the local office market. During the fourth quarter of 2011, the direct office vacancy rate fell to 15.8 percent, down from 16.4 percent in the third quarter and roughly equivalent to the year-ago rate. Net office absorption in the Baltimore region totaled 331,340 square feet (sf), with nearly all submarkets experiencing positive net absorption.

Exceptions included City Center Class A office space (-26,719 sf) along with three northern metropolitan area submarkets: Baltimore County West (-96,047 sf), Harford County (-26,101 sf), and Reisterstown Road Corridor (-10,664 sf). However, City Center overall experienced positive net absorption of 109,835 sf. due primarily to Transamerica’s relocation to 100 Light Street. For the year, regional net absorption totaled 164,180 sf, which means that the fourth quarter represented well in excess of 100 percent of annual net absorption.

Among suburban markets, the most significant net absorption took place in Columbia (104,773 sf). There was also noteworthy absorption along the I-83 Corridor (87,403 sf), Baltimore County East (72,989 sf), Baltimore City East (44,657 sf) and Towson (39,047 sf). From a regional perspective, the southern portion of the metropolitan area, which includes markets such as Annapolis, BWI and the Route 2 Corridor, experienced slightly more than 100,000 sf of net absorption during the fourth quarter. However, for the year, absorption was up by less than 27,000 sf, with the implication that the market has hardly progressed over the past four quarters. The direct vacancy rate for the southern region stood at 15.3 percent during the fourth quarter.

Absorption in the northern portion of the metropolitan area has been even slower at 66,627 sf during the fourth quarter and -14,154 sf over the course of 2011. The northern metro market is associated with a direct vacancy rate of 13.8 percent. Soft absorption may help explain the fact that asking rents actually declined for the quarter and the for the year and now stand at $22.30 per square foot (psf). for the entire Baltimore area market.

Notable Transactions
Lease

Location Submarket Tenant Amount Leased SF
7031-7035 Ridge Road BWI Corridor Ciena 154,100 sf
8013 Corporate Drive Baltimore County East MedStar 29,528 sf
200 W. Towsontown Boulevard Towson Office of Public Defenders 14,569 sf (r)

Sale

Location Submarket Price PSF Building Size SF
6841 Benjamin Franklin Drive Columbia $65,000,000 $324.07 200,573 sf
2600 Liberty Heights Baltimore City $6,800,000 $58.12 117,000 sf
130 Admiral Cochrane Drive Annapolis $2,709,000 $315.00 8,600 sf

(r) Renewal


 

* All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 12/2011.