The Reis Observer foresees stabilization in Office, Shopping Centers and Industrial leasing with Multifamily real estate vacancies remaining low.
REIS.com, in its mid summer analysis of the Suburban Maryland real estate market, offered a reasonably promising outlook for the remainder of 2011.
The Maryland counties that are included in this study are all those that are part of the Washington DC Metropolitan Statistical Area, being: Calvert, Charles, Frederick, Montgomery and Prince George’s Counties.
While most of the strongest positive growth in the multifamily and commercial/industry market is found in Montgomery, other counties such as Frederick, although not as strong in the office and industrial real estate sectors, has shown surprising strength in new as well as quality in the retail shopping center and apartment sectors.
The following information is excerpted from the Reis report (linked below) giving collective insight on the five Maryland counties noted above:
Office Leasing
Expect positive ne absorption in excess of 300,000 square feet over the last seven months of the year to result in a year-end count of plus 577,000 square feet. With most of year’s new supply [just] coming on line … vacancy should close the year at 15.1%, unchanged from May. Rent growth for the year is projected at about 1.0%. Progress should continue in 2012.
Retail Shopping Centers
Net absorption will trail new community and neighborhood center supply this year, but only by about 100,000 square feet. Vacancy should close the year at 9.0% before beginning and extended descent in 2012. Growth rates of negative 0.9% and negative 1.3% are projected for asking and effective average rents for 2011. Next year’s rents should run essentially flat; growth should follow slowly thereafter.
The largest of the year’s … projects [has been] Faison Enterprises’ $29.5 million, 375,000-square-foot Clemson Corner community center at routes 15 and 355 in Frederick City, will complete in July. Marcus & Millichap notes that Clemson Corner “will not adversely affect vacancy this year, as the property is fully pre-leased.” Anchor tenant Marshall’s, meanwhile, opened for business in March.
Industrial Real Estate
Minimal construction along with modest positive demand should help advance the market’s recovery. Rent growth at about 2.0% is anticipated for 2011. Both new supply and net absorption totals should increase annually in the years ahead with absorption maintai9ning the lead.
Apartment Buildings
Expect 2011 to produce gains of 4.7% and 5.5% in the asking and effective average rents. Vacancy is projected to end the year at 4.3% and remain low thereafter.
Read the full REIS mid summer 2011 report along with a supplemental analysis by Cassidy Turley entitled Insights: How Will Federal Spending Impact the DC Region?
Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board. He also writes for TheTentacle.com.