Harford County | Northeast | I-83 Corridor
1st Quarter 2013 snapshot
The U.S. Army’s Aberdeen Proving Ground (APG) is an economic generator for the region and the County’s largest employer. Major developers St. John Properties and Corporate Office Properties Trust continue to drive development in the submarket, focusing on bringing large Class A campuses that support technology driven amenities to market. This boom in construction is now hitting the market, causing the vacancy rates to rise as available vacant square footage enters unfilled.
While the Federal Government’s relocations in relation to BRAC were officially completed as of September 15, 2011, the area is expected to continue to draw activity from contractors relocating their base of operations to the APG area.
The market continues to fill the 250,000 sf of Class A office space added during the 3rd and 4th quarters of 2010 in addition to nearly 225,000 sf of space that delivered in the end of 2012 and during the first quarter of 2013. With an additional 46,000 sf of office space still expected to enter the market in 2013, vacancy rates are not expected to decline drastically in the coming months. Rental rates dropped $2.69 from $24.22 psf in the fourth quarter of 2012 to $21.53 psf in the first quarter of 2013.
Baltimore County East
Close proximity to Aberdeen Proving Ground, new office, flex, and industrial opportunities developed by Corporate Office Properties Trust (COPT), and $800 million in private, state, and county investment in infrastructure, parks, schools, and housing over the last several years has encouraged employment-intensive development in the submarket.
Anchored by White Marsh, a planned 2,000-acre mixed-use community adjacent to I-95, the submarket has grown substantially, to more than 3.8 million square feet (msf) in the last decade. Clusters of financial, insurance, health care, light manufacturing, technology, and distribution operations surround its vibrant town center, which has become a cultural hub. Premier shopping and multiple dining options located at The Avenue at White Marsh attract local business tenants and residents alike.
Activity within the submarket is consistently driven by small tenants taking and leaving space throughout the large office parks that drive market conditions, making activity difficult to track. Over the past year, Baltimore County East continues to show signs of recovery as vacancy rates slipped a total of .73 percent from the fourth quarter of 2012. Average asking rental rates increased by $0.11 psf to $19.96 psf over the year, indicating a continued level of consistency in this sleepy submarket.
Arguably one of the most diverse submarkets, the I-83 Corridor is a blend of office, flex and retail properties, dotted by open land and industrial landmarks. Corporate and regional headquarters include Fortune 500’s McCormick & Company, TESSCO Technologies, PHH Corporation and TransHealthCare.
Office parks neighboring Hunt Valley Towne Center experienced a boon in activity thanks to multiple deals by technology firms such as Ebay and Zenimax. Located at the North end of the submarkets, the area is a mix of mid-rise and single-story flex buildings that are served by Light Rail and easy access to I-83, making them ideal for companies looking for a suburban feel without relinquishing the amenities of an urban office. Schilling Green II, Merrit Properties latest addition to a market that has been void of new constructions since late 2009, delivered at 75 percent occupancy. The 131,360 sf Class A building welcomed science and technology firm EA Engineering as its signature tenant.
The submarket experienced negative absorption of -74,818 sf. Vacancy rates continue to remain the lowest in the Northern Metro Market at 12.29 percent. Rental rates hover in the low $20.00 range from $21.28 psf in the fourth quarter to slightly less, $20.95 psf in the first quarter.
Reprinted with permission from MacKenzie Commercial Real Estate. For a complete report on the Baltimore Metro, visit www.mackenziecommercial.com/marketreport.
Good News / Bad News
With 3 year-over-year losses in home sales, overall 2013 sales through April have increased 10.8% with Singles driving the increase, up 13% over the same period last year. However, several factors will affect year-end numbers, including sequestration, which affects relocation both in and out of county and trends toward apartment living, now a choice to home purchase. Active listings increased in April to 1,169 (+39 over March) with 450 new listings and 169 under contract (both even with March).
When comparing 2012 to 2011 total sales, the sweet spot for Singles was the $300K to $500K segment, with 510 sales, 38.5% of total sales in 2012 and 509 sales, 36.3% in 2011. Close behind are Singles in the $200K to $300K range, accounting for 33% of total sales both years, 438 in 2012, 465 in 2011. These two segments combine to represent 71.6% of total sales in 2012, up 2 points from 2011. The balance of Singles fall above or below these segments, with sales over $600K accounting for just 55 homes in 2012 and 47 in 2011.
The sweet spot for Townhouse sales fell between $150K to $300K, with 368 in 2012 and 364 in 2011. Condos in the same pricing segment account for 116 sales in 2012 and 125 in 2011.