THE NEXT FRONTIER

Where will developers go when options run out in the B-W Corridor? Prince George's County, says ProLogis Baltimore-Washington VP (and soon-to-be Northeast and Mid-Atlantic capital deployment executive) Mark Levy. He's speaking June 7 at our first Baltimore Industrial Real Estate Summit, so don't forget to sign up today.
Mark (in front of Georgetown U, where he's an adjunct professor) tells us owners have a tough time breaking into the B-W Corridor because there isn't much available land and few buildings trade. Soon developers will be forced to look elsewhere, and submarkets north of the Ft. McHenry Tunnel are viewed by many as outside the main distribution corridor connecting Baltimore and DC and thus less desirable. That leaves Prince George's. Mark says the best locations there will have direct access to the Capital Beltway; one market to watch is Capitol Heights, which he tells us has a good base of high-quality product (other key markets at the Pennsylvania Avenue Corridor and Landover/Lanham). Tenants priced out of inside-the-beltway markets in Virginia will also boost demand, and Mark thinks overall fundamentals make Prince George's a better long-term market for investment.
As for Baltimore City, Mark tells us product there tends to be more functionally obsolete than the B-W Corridor. ?It's a hyper-infill market,? he says, and price per SF drives for leasing decisions rather than quality or access to transportation infrastructure. Most users serve industry within the city and are under 20k SF. Those tenants typically have limited access to credit and operate on a pure cash flow basis, so Mark thinks recovery there won't take hold until economic conditions improve significantly.

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