Industrial real estate investors in Frederick waited for election results and held out for better properties.
The third quarter of 2012 shaped up exactly as anticipated, with most of the players in the real estate market waiting out the election results. Given how the election played out, most economists don’t expect much in the way of GDP growth in 2013—painfully disappointing, but true.
There were, however, some green shoots in the economy during the past quarter worth mentioning:
- For the first time since the recession began, residential housing actually contributed to GDP during the 3rd quarter of 2012.
- Industrial production is not what it was before the recession, but at a 3% growth rate it is growing at a stronger rate than the economy overall.
Both of these are good indicators for growth in the industrial real estate segment, although commercial real estate overall won’t recover fully until the U.S. reaches pre-recession employment, which at this rate most likely won’t happen until late 2014 at the earliest.
While there was some cherry picking of prime Frederick industrial properties at bargain prices during the second quarter of 2012, the action in the industrial real estate segment in Frederick County was somewhat sparse during the third quarter.
In terms of sales, one million dollar industrial property sold in Frederick County during the third quarter:
8052 Ball Road: This auto repair and salvage facility near Ijamsville was sold by RSS Enterprise LTD to R.D. Stup for $1,000,000 ($58.82/SF) in August of 2012. Mr. Stup has been the operator of the business for a long time, and the transaction likely represented a buy out of other members of the family.
The Wedgewood industrial business parks were a popular location during the quarter, as two fairly large industrial lease deals closed there:
4600 Wedgewood Boulevard: Kohl Building Products signed a lease for 56,000 square feet ($6.00/SF NNN) in the Wedgewood II industrial complex with a move-in date of January 2013. Kohl is exchanging their 18,000 sq. ft. space on Urbana Pike for the larger space at Wedgewood.
4510 Buckeystown Pike: GSA took 60,000 sq. ft ($6.50/SF NNN) in the Wedgewood South I industrial complex during the quarter with a move-in date of March 2013. This coincides with the September vacancy of about the same square footage in that building by RMS Direct, a mail fulfillment business.
How does the rest of 2012 and beyond look for industrial real estate? That depends in large part on retail sales and residential construction. Look for an update on the retail segment of Frederick’s commercial real estate market, as well as a report on recent Frederick-area land sales, in upcoming MacRo Report Blog posts.
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 forTheTentacle.com