Brac, the Baltimore-Washington Real Estate Market and How to Prepare for an Office Move
By David Fritz, CCIM, SIOR, Michele Kornbluth and Brad Berzins, NAI KLNB
You and your company are being affected by BRAC (the Base Realignment and Closure process), and word has it that the organization will soon be relocated to Maryland. Having only passed through that area on the way to catch an Orioles game or for some shopping, you need a quick primer on the Baltimore-Washington Corridor Market and the current real estate trends. So, here goes:
What are the keys to the market?
Not even a slowdown in the residential industry during 2006-2007 could stop the commercial real estate market in the Baltimore-Washington corridor. Construction starts are on the rise throughout the area, particularly in Anne Arundel County, and more than 16,000 new jobs are expected to enter Maryland as a result of BRAC.
In addition to building new product, an increasing number of developers are redeveloping and repositioning older buildings to support demand and interest in office, flex and industrial space. Companies representing every category view this region as among the most attractive to relocate or expand their business. A college-educated workforce, one of the most prolific airports in the country (BWI) and outstanding consumer demographics are the major reasons why.
What you should know about Anne Arundel County:
The central core of the real estate market was dubbed the Gold Coast, and it contains more than eleven million square feet of industrial and flex space. Nearly every major local real estate developer has a number of active projects in Anne Arundel County, with the region surrounding BWI Airport the most attractive. Marley Neck, Hanover and Glen Burnie remain the hot spots for warehouse and industrial space.
More than two million square feet is being developed adjacent to the army base. Groundbreaking is expected to occur in 2008 with delivery of the first buildings scheduled for late 2009. There are many opportunities now and in the future that are available from national and local developers.
Interesting real estate facts about Howard County:
Few new office projects are in progress, which is causing rents to slightly rise and the purchase of office condominiums is becoming more in vogue.
New construction activity is focused in the Columbia Gateway business community and Maple Lawn, and a number of mixed-use projects are underway along the US Route 1 corridor near Elkridge. A new Wegmans Food Market is coming and additional hotels are also on the way.
Facts about Prince Georges County:
(Important note: always say Prince Georges County and never PG County when referring to this jurisdiction. Doing otherwise is a sure way to show youre an outsider).
The Inner Beltway region features both the largest amount and most rentable building area in the county, while the Outer Beltway is comprised of predominantly flex/office space. The northern section positioned near the Capital Beltway and Interstate 95 has the most flex/office product.
Tips for preparing for an office move:
Start the process early, allowing approximately 12 months in advance of your move. Before you begin, select a professional real estate broker that can provide you with an entire range of building options and that can spend time providing you with a windshield tour of the possibilities. Make sure your broker explains the full-service rent vs. triple net differences and be aware of rent escalations. Research carefully the expense of utilities, which can add a great deal of overlooked expenses.
Next, engage the services of a space planner to accurately identify the amount of space your will need, which save headaches, time and money.
Budget thirty to forty-five days for lease negotiation and sixty to ninety days for construction build-out. Figure approximately three to four months to build out 15,000 square feet of space.
David Fritz of NAI KLNB can be reached at 443-574-1410 or firstname.lastname@example.org, Michele Kornbluth can be reached at 443-574-1403 or email@example.com and Brad Berzins can be reached at 443-574-1401 or firstname.lastname@example.org