12C — July 26 - August 15, 2013 — Brokerage Directory — Mid Atlantic Real Estate Journal
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B rokerage D irectory
Sequestration/federal funding cuts continue to play a role in how companies view RE needs Colliers Int’l. market report: Baltimore, MD office leasing slow, but steady
T
he Baltimore Metro Area class A office market improved mar-
ginally in the 2nd quarter, a trend seen in most of the sub- markets. National politics (i.e. Sequestration/federal funding cuts) continue to play a role in how companies view their commercial real estate needs and has clearly had a “chilling” effect for government- focused contractors operating near Ft. Meade in Anne Arundel County andAberdeen Proving Grounds in Harford County. The economy is learning that
there is a “new normal” as it relates to the speed of recov- ery from the latest recession. Vacancies are taking longer to fill because tenants are be- ing more judicious with their decision to move. Tenants are not moving as much, causing some landlords to factor in the costs of moving to entice new tenants. Furthermore, for those ten- ants that do relocate, there is an emphasis on short term leases or lease term flexibility, something not seen since the mid 1990s. However all things considered, the Baltimore regional economy’s upward momentum continues. Counties such as Harford and Baltimore continue to see higher vacancy rates due to stalled BRAC plans and the effect of sequestration. That being said, Maryland’s state-wide unemployment rate nonetheless dropped to 6.5% as the overall workforce increased. While the city of Baltimore has done a good job of attracting young profes- sionals who prefer to live in an urban environment, the city’s unemployment rate of 10% is higher than the state’s. In the suburban market, Tenants are taking a greater interest in LEED certified buildings for environmental and busi- ness reasons, in part due to anticipated savings in utili- ties that offsets a higher rent structure. Net absorption in the class A Baltimore Region office market rebounded in the 2nd quarter after going negative in the 1st quarter, absorbing almost 500,000 sf of space. Absorption in Class B & C office space also rebounded as was expected, as many of those properties are recycled for residential and non-office use. n
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