2012 Global Market report - NAI Global

Greater Portland, Maine
Baltimore, Maryland
Contact
NAI The Dunham Group
+1 207 733 7100
Metropolitan Area
Economic Overview
2011
Population
2016 Estimated
Population
Employment
Population
Household
Average Income
Median
Household Income
548,055
547,313
304,520
$70,216
$55,768
Southern Maine’s hub is the city of Portland. Portland is the
largest city in the state with a current population of 66,194.
With a metro population of over 500,000, Greater Portland
is home to more than a third of Maine’s total population.
Portland is considered the states’ social and economic
capital. Most national financial service organizations such
as Bank of America, Key Bank, Fidelity Investments, Anthem,
TD Bank and Unum base their Maine operations in Portland.
The office market has remained relatively unchanged over
the past year. Existing tenants have taken advantage of
incentives from landlords to remain in their spaces. Medical
space absorption has been strong. The major development
in the market was the redevelopment of 254 Commercial
Street, a former waterfront storage building that was
converted into 95,000 SF of Class A office space. Pierce
Atwood has relocated into 75,000 SF, making this a
win-win for Portland’s waterfront redevelopment.
The retail market has remained moderate. Large box
closings have declined as landlords have renegotiated rents
to keep properties full. The downtown market has remained
stable with its quaint Old Port shops reporting limited
vacancy. New tenants have been primarily in the food sector,
catering to the ever-increasing cruise ship traffic. We
anticipate the market will remain stable, but would not count
out more “thinning out” of competing big box retailers if the
economy remains flat over the holidays.
The level of leasing activity in the industrial market has
increased, but there is still an over-supply of available space.
Smaller spaces have not been in demand and make up a
bulk of the over-supply. Landlords and sellers need to lower
their expectations and negotiate aggressively to fill empty
spaces and limit their cash flow losses. The over-supply of
existing inventory is distracting buyers and tenants from
considering new construction. The cost of new space cannot
compete with current market prices.
In summary, the Greater Portland real estate market is
weathering the economic storm. Maine’s current appeal for
tourism coupled with the new administration’s emphases
on pro-business, makes us feel that the state’s real estate
market will start to gain momentum heading into 2012.
Contact
NAI KLNB
+1 410 321 0100
Metropolitan Area
Economic Overview
2011
Population
2016 Estimated
Population
Employment
Population
Household
Average Income
Median
Household Income
2,728,911
2,803,598
1,456,334
$90,145
$68,745
The Baltimore metro area should experience improving
conditions short term, followed by expansion thereafter as
the impact of BRAC benefits the area during 2012 combined
with the solid, continuing performance of the area’s health
care industry led by Johns Hopkins. Although the Baltimore
metro area could feel the pinch of the Federal government
scaling back its budget, BRAC impact including workers and
contractors will continue to be felt at least for the next
several years.
The BRAC program in Harford and Anne Arundel counties
has now finally officially ended and the majority of transfers
have been made, which should help move some available
space around Fort Meade and Aberdeen Proving Ground off
the market, even as more is added. Net absorption overall
was in positive territory boosted by several pre-leased
deliveries and relatively steady leasing activity. Although the
vacancy rate is down over the past year, it remained elevated
enough to put pressure on asking rents. Asking rents inched
down slightly in 2011.
Tenants moving into large blocks of space in 2011 included;
GSA moving into 125,130 SF at 324 Sentinel Way; Booz
Allen Hamilton, Inc. moving into 96,000 SF at 308 Sentinel
Drive, both at National Business Park and law firm Ober,
Kaler, Grimes & Shriver moving into 92,778 SF at
Transamerica Tower. Others included the 234,000 SF lease
signed by Maryland Department of Health and Mental
Hygiene at 1770 Ashland Avenue in the Baltimore City East
market; the 115,900 SF deal signed by PNC Bank at One
East Pratt Street in the Baltimore City CBD market and the
97,392 SF lease signed by TESSCO Technologies Incorporated
at The Atrium Bldg in the north Baltimore County market.
In the industrial market, the largest lease signings occurring
in 2011 included the 302,687 SF lease signed by
LifeScience Logistics at Gateway Commerce Center in the
Columbia market; the 161,112 SF deal signed by A&S
Services Group LLC at 5003 Holabird Ave in the Baltimore
City market and the 146,104 SF lease signed by Fabrication
Designs Inc. at 7463 New Ridge Rd in the BWI market.
Rents have seen little movement over the past year.
Total Population
Median Age
42
Total Population
Median Age
37
Greater Portland At A Glance
(Rent/SF/YR) low High effective avg. Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
$
$
$
$
$
$
$
$
$
$
$
$
$
16.00
15.00
8.00
14.00
10.00
8.00
3.25
3.75
4.75
16.00
10.00
8.00
15.00
$
$
$
$
$
$
$
$
$
$
$
$
$
21.00
18.00
15.00
18.00
14.00
10.00
5.50
5.50
8.00
30.00
18.00
20.00
30.00
$
$
$
$
$
$
$
$
$
$
$
$
$
20.25
17.00
12.50
16.00
13.00
9.00
4.40
4.60
6.00
25.00
14.00
16.00
23.00
5.00%
10.50%
14.00%
5.00%
11.00%
7.00%
7.00%
5.00%
5.00%
5.00%
5.00%
7.00%
4.00%
deVeloPment land Low/Acre High/Acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
$
$
$
$
$
$
14.00
120,000.00
70,000.00
70,000.00
200,000.00
65,000.00
$
$
$
$
$
$
20.00
200,000.00
150,000.00
150,000.00
500,000.00
300,000.00
Baltimore At A Glance
(Rent/SF/YR) low High effective avg. Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
$ 22.50
$ 18.00
$ 12.00
N/A
$ 15.00
$ 10.00
$ 22.50
$ 36.00
$ 25.00
N/A
$ 32.00
$ 30.00
$
$
$
$
$
22.50
24.00
17.50
N/A
25.50
20.00
N/A
16.90%
9.70%
N/A
13.60%
11.70%
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
$
$
3.00
N/A
4.00
$ 12.00
N/A
$ 30.00
$
$
4.50
N/A
9.50
9.80%
N/A
10.30%
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
$ 15.00
$ 15.00
$ 10.00
N/A
$ 50.00
$ 50.00
$ 16.00
N/A
$
$
$
20.00
24.00
15.00
N/A
N/A
N/A
N/A
N/A
deVeloPment land Low/Acre High/Acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
$
$
$
500,000.00
125,000.00
25,000.00
$ 2,000,000.00
N/A
$ 3,000,000.00
Office/Industrial Land - Non-park $ 50,000.00 $ 700,000.00
Retail/Commercial Land
Residential
$ 250,000.00
N/A
$ 5,000,000.00
N/A
2012 Global Market Report n www.naiglobal.com 104