Howard CountyOffice Market Overview 3rd Quarter 2011 Vacan cy & Absorption After retreating during the second quarter, the office and flex markets ofHoward County gained positive momentum in the third quarter achiev- ing modest improvements in vacanc y and abs orption. Office v acancy dropped twenty basis points over the quarter to 13.7%, which is over one percent point lower than at the end of 2010. Correspondingly, year-to- date office n et absorption is positive by 192,969 square feet. While the overall drop in vacancy was moderate, it touched every submarket in the County except Columbia South where vacancy was unchanged. With BRAC construction completed at Fort Meade in June and employees moving into their new buildings at a rate of 200 per month, demand from government contractors should be steady in the coming months. In the flex market, vacancy fell by half a percentage point to 6.8%, which is approximately one percentage point lower than at the end of 2010 and annual net absorption totaled almost 75,000 square feet. In Short Office and flex va- cancy fell to 13.7% from 13.9% and 6.8% from 7.3% respec- tively Annual office absorp- tion rose to 192,696 square feet while flex market net absorp- tion fell to 74,292 square feet Unemployment in Howard County de- creased to 5.6% from 5.8% in the twelve months ending in July Office Market Annual Change Vacancy Absorption SF Under Construction Pre-leasing Rate Static Rental Rate 0% 2% 4% 6% 8% 10% 12% 14% 16% (200,000) - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 2003 2004 2005 20062007 2008 2009 2010 YTD 2011 Howard County Office Market Net Absorption, Deliveries & Vacancy Absorpti on Del i veries Vacancy S q u a r e F e e t Va c a c y Ra te
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Disclaimer: The information contained in this report was obtained from sources deemed to be reliable, but no warranty or representation, is made to the
accuracy thereof. This information is provided subject to correction of errors and omissions.
There were no groundbreakings during the third quarter leaving two buildings, both speculative, under
construction. 8160 Maple Lawn Boulevard in the Columbia South submarket is a 110,000 square foot
project and 6514 Meadowridge Road in Columbia North will total 68,799 square feet when it is com-
pleted early in 2012. No flex buildings were delivered or were under construction as of the third quar-ter. Two buildings delivered earlier this year; 9055 Sterling Drive and 8164 Washington Boulevard.
The 153,500 square foot building at 9055 Sterling Drive is 100% available while 8164 Washington
Boulevard, which is a mixed-use project has 23,000 square feet of retail available.
Disclaimer: The information contained in this report was obtained from sources deemed to be reliable, but no warranty or representation, is made to the
accuracy thereof. This information is provided subject to correction of errors and omissions.
Developm ent Activity
No significant flex or office building sales were completed during the third quarter. Year-to-date sales
volume totals $44.25 million with an average price per square foot $131. Three properties have traded
hands this year the largest being 8930 Stanford Boulevard (154,394 square feet), which Howard County
picked up for $26 million or $168 per square foot. The other two sales completed this year included
10320 Little Patuxent Parkway, which First Potomac Realty Investors scooped up for $11 million, and7700 Montpelier Road, which Syndicated Equities Corp. purchased fully occupied by Johns Hopkins
Applied Physics Laboratory on a seven year lease for $7.25 million or $166 per square foot. While sales
activity has been moderate so far this year there are several properties on the market including the
AMB portfolio, a 20 office/flex building portfolio totaling 588,000 square feet and a portfolio of eight in-
dustrial buildings offered by TA Associates.
Investm ent Sales
Leasing Activity
Unlike other Suburban Maryland mar-
kets, where activity was slow during thesummer, leasing activity in Howard
County rose. Leading the charge was
the Bureau of Environmental Health
which renewed 54,249 square feet at
7178-7180 Columbia Gateway Drive.
The largest non-renewal transaction
was a 35,000 square foot lease at
10620 Guilford Road signed by Clear-
Edge IT Solutions.
In the flex market, leasing remainedsteady and stable if unexceptional. The