2016 Predictions From Real Estate Experts
Let’s raise a glass to new food markets, suburban office deals and apartment units in the new year. We spoke to four real estate experts who told us what to expect in 2016 for Greater Baltimore's office, retail and multifamily sectors.
Food markets are all the rage, says MacKenzie Retail LLC real estate adviser Michael Gioioso (pictured with wife Brittanie). Mount Vernon Marketplace opened in October, with more than a dozen vendors, from dumplings to oysters. Others are on the way at Whitehall Mill (a 19th-century former cotton mill that will include an 18k SF food hall) and in Seawall Development’s R. House, opening next fall in Remington.
Whether these markets will replicate the success of the recently overhauled Belvedere Square (pictured) remains to be seen, Mike says.
The number of apartment units in Baltimore City will start to outstrip demand, driving down rental absorption rates, says Poverni Sheikh Group principal Eugene Poverni (pictured here with his wife, Someya). Occupancy rates dipped from 97% in 2011 to 90% this year, according to CoStar. Some of this can be attributed to new apartments yet to finish leasing. More than 3,000 units are in the planning stages and 1,460 are under construction in downtown Baltimore alone.
Developers can still find opportunities for multifamily development in “micro-markets” next to employers that are expanding, Eugene says. For instance, the southern part of Federal Hill is a desirable place to live because of Under Armour’s new headquarters in Port Covington.
Mike adds that we’re seeing more multifamily housing going next to successful retail developments. For instance, the developers of the Rotunda (pictured) are putting Class-A apartments in the $100M complex, which will include MOM’s Organic Market. “Developers see a great way to activate neighborhoods.”
On the office side, vacancy rates dipped to 13.8%, from nearly 17% in 2014, says CBRE managing director Tim Zulick. “We’ve seen positive absorption during the last four years in downtown,” Tim says. He’s pictured with his son Brad at Dickinson College.
Major office deals are occurring, not concentrated in any one area. Exelon is building a 20-story tower at Harbor Point, east of downtown, while M&T Bank is expected to anchor the new tower at 1 Light St. Some suburban office markets are outpacing downtown, including Towson, Columbia, White Marsh and Bel Air, says CohnReznick audit partner Adam Kleeman. Towson's development deals include Towson Row, Towson Square and Towson Commons while White Marsh includes Baltimore Crossroads.