It is a simple formula: No metropolitan region can achieve extended economic growth without a healthy job market that is sustainable over the long-term. The greater Baltimore region has been able to accomplish just that — especially over the past two years, starting when a new governor was installed in Maryland.
The State of Maryland’s rallying cry “We’re open for business” is putting its money where its mouth is with the generation of more than 135,000 new jobs since the start of 2015, and the state unemployment rate dipping to 3.8 percent, which makes it substantially lower than the national average of 4.4 percent.
Bill Harrison, Lee & Associates | Maryland
As an official with the Maryland Department of Commerce so accurately stated at our company’s year-end market update, Baltimore is known for having three famous birds: the Ravens, Orioles and — with all the construction underway — cranes.
Momentum has been achieved with the continued distancing of the state’s previous “business unfriendly” reputation, the influx of institutional money targeting the region, its immediate proximity to the Nation’s Capital, a highly educated labor base and a diverse business economy led by the medical, high-technology and educational institution sectors. And, the most telling barometer of all is where Baltimore ranks in the “who gets Amazon sweepstakes.” The city has been mentioned as high as No. 20, with major attributes including the availability of tech talent, access to major airports and a lower cost of living.
Toughing Things Out
The majority of cranes in the downtown market are reserved for multifamily product, although softness can now be felt in this category given the delivery of new inventory over the past several years. The Class A office vacancy rate hovers in the 11.8 percent range, with no earth-shattering new leases completed or company exits occurring in the past year. Things appear status-quo, except for the 350,000-square-foot 1 E. Pratt St. and the 475,000-square-foot 1 S. St. — the latest to be placed on the sales block.
Port Covington, the $5.5 billion mega-project planned on a 235-acre waterfront parcel in South Baltimore, has dominated the headlines for several years. But now, things are eerily quiet for the planned headquarters of Under Armour, as well as the future site for housing, shops and restaurants that was expected to support more than 50,000 new jobs. Goldman Sachs invested more than $200 million in the project last fall and construction is expected to commence very shortly.
Brighter In Baltimore County
The allure of free parking, lower rental rates and shorter commutes, supplemented by the right amenities to make any employee happy, is making “suburbs the new city,” specifically in three separate office markets in Baltimore County. In a competitive labor market, companies need to do everything possible to attract and retain good employees. Owings Mills features several new mixed-use projects, including Metro Centre at Owings Mills, a transit-oriented development connected to the Metro line that is attracting attention with its compact, pedestrian-friendly environment.
Greenleigh at Crossroads, the next development phase of Baltimore Crossroads, a 1,000-acre mixed-use business community situated in the White Marsh area of Baltimore County, is also making waves, especially with its recent 75,000-square-foot lease to a major national company. Developer St. John Properties is proceeding with a new four-story, 100,000-square-foot office building, two single-story buildings spanning 72,000 square feet and two retail buildings offering 30,000 square feet.
Towson Row, the long-awaited and much-delayed $1.2 million mixed-use project in Towson, received a new lead developer in Greenberg Gibbons and now appears to be on schedule for a mid-year start. Whole Foods Market still appears to be the lead retail tenant, which will be supported by a 150,000-square-foot office building developed by Caves Valley Partners.
Brightest In Howard County
As evidenced by an approximate 6.1 percent vacancy rate, the Howard County marketplace remains the healthiest given its proximity between two major metropolitan regions; Fort Meade, which creates on-going opportunities for defense contractors and IT companies; and the presence of a diverse business and labor market. Among the brightest stars in the county is Maple Lawn, a project master developed by Greenebaum Enterprises, in addition to St. John Properties. A 104,000-square-foot building was delivered at the planned community last year.
The Howard Hughes Corp. remains focused on the $1 billion redevelopment of downtown Columbia, which celebrated its 50th anniversary last year. The redevelopment includes multifamily, office space and entertainment. Costello Construction and Kingdon Gould delivered the 158,000-square-foot Little Patuxent Square last year, as well.
— By Bill Harrison, Senior Vice President, Lee & Associates | Maryland. This article originally appeared in the February 2018 issue of Southeast Real Estate Business.