Vacancy rates for Baltimore?s commercial office space remain high, according to a recentreport, with approximately 90 percent of space delivered in the first half of the year still vacant.
The report, released last week by the Baltimore office of commercial real estate consultants Colliers Pinkard, cited the Baltimore metro area?s vacancy rate at 15.5 percent, up from 15.2 percent in January.
“It?s not unusual, new space being built speculatively and coming online,” said Jeff Samet, the report?s author. “I think more importantly overall is the [economic] slowdown we have seen in the first half, which is why we see the uptick in vacancy rates.”
The slight increase in vacancy came despite major leasing announcements from several firms in the first half of the year. Law firm Hogan & Hartson said it would relocate to 34,000 square feet in the new Legg Mason Tower in Harbor East, Integral Systems will occupy COPT?s 131,000-square-foot building at Columbia Gateway, and Opus? first 60,000-square-foot building at Aberdeen Proving Ground has been leased to CACI.
According to the report, 2.9 million square feet of new office space will be delivered by 2009 ? 75 percent of which is still available. While the biggest of those projects, the Legg Mason Tower, is two-thirds leased, 91 percent of the 1 million square feet at Baltimore/Washington International Thurgood Marshall Airport is unleased, as well as 85 percent of the 789,000 square feet coming to Howard County.
The Base Realignment and Closure process is driving expansion in the latter two areas, Samet wrote in the report, and will be crucial to filling the space.
“With a weak national economy, strapped federal budget deficit and a new administration taking over the White House, a lot is riding on BRAC coming online in a timely way,” Samet wrote.
Tony Casalena, managing director of commercial real estate group Sperry Van Ness, said he believed the market would remain steady through the end of the year, and hehasn?t seen a significant increase in vacancy rates.
Just as the residential real estate market is a buyer?s market, commercial real estate negotiations favor the potential tenant, Casalena said.
“Tenants are being a lot more conservative in their commitments as well,” he said. “They?ll stay put if they don?t think they can get something at market rate.”
