Job Growth, Low Unemployment Keep Office Development Churning in Baltimore

Continued job growth, coupled with a 4.3 percent unemployment rate (down from nearly 9 percent in 2010) in the greater Baltimore metropolitan region are the primary reasons giving real estate development companies the confidence to construct speculative commercial office buildings in select submarkets throughout central Maryland.

After delivering more than 1 million square feet of space in Baltimore City, another 1.6 million is presently rising in the downtown skyline. Industries including financial services, medical and healthcare, education, cybersecurity and manufacturing continue to exhibit excellent health, and a location approximately 40 miles from the center of Washington, D.C., remains one of Baltimore’s most valuable assets. Below is a quick scan around the entire metro area:

Merritt Properties announced plans earlier this year to construct a 20-story, 200,000-square-foot speculative office building along Boston Street. Previously announced, but yet to begin just several streets away, is Corporate Office Properties Trust’s $1 billion project containing more than 1 million square feet of commercial office and retail space.

Bill Harrison, Lee & Associates | Maryland

Since the opening of The Shops at Canton Crossing, a shopping center developed by 28 Walker Associates several years ago, this submarket has experienced a retail renaissance, although the inclusion of new commercial office product is a yet unproven formula.

Penn Station
The Charles Street Corridor is set to receive a shot in the arm with the redevelopment of Penn Station, which will incorporate more than 1.6 million square feet of commercial office, retail and residential space within the Amtrak and Maryland Rail Commuter (MARC) Station that first opened in 1911 and is considered the eighth-busiest in the country. Local members of the development team include Beatty Development Group, Armada Hoffler Properties, Cross Street Partners and Gensler.

McHenry Row
This 20-acre mixed-use project by 28 Walker Associates was the recent recipient of three leases at McHen-ry Row III, bringing the five-story, 75,000-square-foot speculative development to more than 80 percent leased. Positioned adjacent to a Courtyard Marriott hotel that is also under construction, this latest office building will begin welcoming tenants this fall.

First opened in 2011, McHenry Row contains the city’s first Harris Teeter grocery store, 110,000 square feet of retail space, 500 residential units and unique uses such as the Diamondback Brewing Co. and Taproom.

Port Covington
Sagamore Development’s $5.5 billion development, and the expected future home of the new Under Armour corporate campus, has been strangely quiet after dominating local headlines for the past two years. More than 200,000 square feet of space, spread among two or three buildings, is expected to be delivered in 2020, but there are few signs of activity on the site currently.

Considered among the largest urban renewal projects in the country, the project is expected to contain more than 18 million square feet of mixed-use product. The most noticeable addition has been last fall’s opening of the Sagamore Spirit distillery and adjacent Rye Street Tavern.

One Light Street
M&T Bank has signed a 155,000-square-foot lease (for 500 employees) within this 28-story mixed-use building that will contain 415,000 square feet of office space, as well as luxury apartments and retail, with delivery scheduled for this fall. The developer is Madison Marquette.

210 Alleghany Avenue
Stanley Black & Decker leased two floor floors, representing more than 13,000 square feet of space at this five-story building, in two separate transactions. Chesapeake Real Estate Group, together with financial partner Cicero Capital Partners, acquired the fully vacant building in fall 2016 and invested more than $1 million in a comprehensive exterior and interior improvement strategy.

Things paid off quickly at the five-story, 30,000-square-foot building, which is positioned adjacent to the Baltimore County Courthouse and within the CBD.

Merriweather District
Jim Rouse started Columbia and The Howard Hughes Corp. is finishing it. Contained with Columbia Town Center is the nearly 400-acre Merriweather District, a mixed-use development plan that will be constructed in two phases, with the first portion expected to deliver next year.

The District will add more than 1.5 million square feet of commercial office space to downtown Howard County, including a 12-story, 350,000-square-foot structure that has been fully leased by Tenable, a cyber-security company. Nearby, the venerable Merriweather Post Pavilion is nearing the final phases of renovation and several upscale restaurants recently opened.

— By Bill Harrison, Senior Vice President, Lee & Associates | Maryland. This article originally appeared in the July 2018 issue of Southeast Real Estate Business.

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