The number of educated Millennials in the Baltimore-Washington corridor could exceed that of the Windy City by 2018, driving demand for large industrial spaces from e-commerce firms like Amazon, according to Manekin Advisors managing director John Graham. Here's a look at six key trends driving the market.
1) Expanding Companies
John was among the expert panelists who spoke at Bisnow's Annapolis and the B-W Corridor event yesterday at the Loews Annapolis Hotel. Expect a big deal to come out of Rockville in the next couple of weeks, Michael Gill, Maryland’s secretary of business and economic development, told 200 attendees. This unnamed Montgomery County company will expand and create 400 high-paying jobs, Michael says. The announcement will “put another notch on the belt of the State of Maryland as a good place to grow a business,” Michael says, adding the state also has a "fighting chance" to lure the FBI headquarters to Prince George’s County.
2) Under Armour Expanding
Don't bet against Kevin Plank, advises Michael, pictured here. In the next eight to 10 years, we’ll see Port Covington in South Baltimore house the eighth wonder of the world, aka the future home of Under Armour and other real estate ventures from the sport brand's founder and CEO, including a whiskey distillery, residential space and an incubator, Michael says.
3) Healthcare Consolidation
Solo internists aren't signing office deals anymore. Instead, they’re joining the larger groups like Medstar and Anne Arundel Medical Center, says St. John Properties acquisitions VP Sean Doordan (pictured). The company owns 17M SF of property in eight states, about a third in Anne Arundel County. A lot of hospitals are opening satellite offices, noted moderator and NAI SVP Jeff Ludwig.
4) Amenities—and Crab Cakes—are King
Renters like amenities such as health clubs, restaurants and shops, says Bozzuto president Mike Schlegel (right). The company owns five properties in Anne Arundel County and manages nine, totaling 3,000 units. Mike adds that he’s seeing more tenants in their 60s, making the B-W corridor a place where people want to spend their golden years. Sitting in the middle is Tate Armstrong, president of Konterra Realty, which has developed 1.5M SF of commercial real estate, stretching from Crystal City, VA, to Baltimore. On the left is moderator Jeff Ludwig.
Speaking of amenities, you can’t beat the views and crab cakes in Annapolis, says Mayor Mike Pantelides. It’s the state’s sailing capital, home to 19 art galleries and four performing arts centers, and a foodie town. Just don’t ask the mayor for his favorite crab cake spot. He can’t pick favorites.
5) Industrial Prices Skyrocketing
The industrial space in the Baltimore-Washington corridor totals just 60M SF, compared with Chicago’s 1B SF, says Manekin managing director John Graham. “There are very few sites available and the demand is big,” John says. The price for industrial real estate has reached 2007 levels and is approaching prices in LA or New York. Former industrial land is being turned into casinos, hotels and multifamily properties. “We’re becoming like Northern New Jersey. It’s a very land-constrained market.”
6) Demand for Townhomes
Townhome sales are outpacing single-family homes by two to one, says Elm Street Development VP Karen McJunkin (right). The company is developing 26 residential projects, most of which are in the B-W corridor. “On the residential side of things we’re very bullish on the corridor,” she says.
