CBRE: Continued Uncertainty Contributes to Flat Baltimore Office Market
At the end of 2012, the Baltimore office market remained flat in the face of limited corporate growth and continued uncertainty over the budget and other economic factors.
In the fourth quarter of 2012, the market experienced a 20 percent reduction in activity when compared to the same period a year ago, according to reports released by CBRE Group.
“Despite previous optimism that the turn of the year might bring relief from federal budget uncertainty, the fiscal cliff and possible sequestration remain significant factors as we head into the first quarter of 2013. Few new users are coming into the market. Until we see more users coming into the market, we expect the office market to continue to be flat for the foreseeable future,” said Chip Olsen, Senior Managing Director for CBRE’s Baltimore office.
A year ago, 111 active tenants in the market sought to lease 1.9 million square feet. Over the most recent quarter, only 89 tenants were looking for 1.2 million square feet, a 37% reduction in the amount of space to be leased. The professional services and medical industries are currently the area’s most active.
The CBRE reports continue to show only limited activity in Baltimore’s central business district and in the typically robust Baltimore City East submarket.
Downtown Baltimore continues to be characterized by a lack of confidence in investment grade office product; as a result, 13 Class B and Class C buildings are scheduled to be converted into multi-housing and mixed-use facilities over the next 12 months.
Despite concerns surrounding the federal budget and sequestration, several large office users executed leases in the CBD, Hunt Valley, and Columbia submarkets this quarter. These include:
- The Maryland State Attorney leased of 65,367 square feet at 120 E Baltimore Street in Baltimore;
- Diamond Comics, the largest comic book distributor in North America, leased 52,111 square feet at 10150 York Road in Hunt Valley; and
- NewDay Financial, a mortgage company signed 51,825 square feet at 8135 Maple Lawn in Columbia.
For the complete fourth-quarter 2012 reports detailing the state of office leasing and industrial markets throughout the Greater Baltimore Region, go to http://www.cbre.com/USA/Research.