Frederick City continues to be recognized as a livable community, with wonderful amenities offering a great quality of life.
Recently, the mayor reconvened his ad hoc Blighted and Vacant Property committee to update them and the public on how well the city is completing the commendations made by the committee. Their timing and pace of progress becomes more relevant considering a recent Cassidy/Turley report addressing 2014, second quarter building information. For the office sector, it highlighted three very related office market indicators:
- Currently, the average space allocated an office user is 170 square feet; down over 23% from the 220 square feet required before the recession.
- Nearly 68% of the office inventory n the US is at least 20 years old.
- Since 2010, over 70% of the net absorption in the office sector nationally has been for high quality, more efficient office space.
According to CoStar’s commercial real estate database, the average office building in Frederick County is 50 years old, with the median age being 27 years old. Clearly, the city’s inventory of office buildings are older structures, which means the average and media ages will be considerably higher.
While those “old” building help give Frederick commercial real estate its charm and character, they also represent a significant amount of vacant and active office buildings designed for use by a previous generation. There is significant debate about the cost of renovating older structures vs. simply building something new that doesn’t have the challenges of fitting today’s technology into yesterday’s design.
As the “flight to quality” gains more momentum along with an improving employment arena, the city and county will need to become very creative in modernizing their renovation incentives to prevent newer buildings from creating a growing inventory of vacant and blighted structures.
To learn more about how your real estate investments are being affected by the “flight to quality” in Frederick, contact us.