[Link].
com
THIRD QUARTER | 2014
MacKenzie Market Report
Retail Market
THIRD QUARTER | 2014
[Link]
* All information furnished regarding property for sale, rent, exchange or nancing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions,
or changes in conditions, prior sale, lease or withdrawal without notice. All information should be veried to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 9/2014.
Quick Stats
4.77%
The overall vacancy rate for the Baltimore
MSA remains well under 10 percent with
multiple submarkets recording rates under
5 percent. Areas with strong demographics
and pyschographics (Annapolis, Ft. Meade,
Columbia, and York Road Corridor) are
consistently strong as retailers ock to new
construction and lifestyle center oriented
projects.
Though the region recorded a negative
absorption for the quarter, activity with the
area is expected to "right itself" in the coming
months as the traditional holiday shopping
season takes hold. The area currently has
less than 300,000 sf under construction.
Average rental rates for the region continue
to recover from to pre-recession levels near
$20.00 per square foot (psf). The Southern
Metro Markets (Annapolis, Fort Meade, and
Columbia) continue to command the highest
of the average asking rental rates averaging
slightly above $20.00 psf thanks to multiple
projects commanding rates closer to an
average $35.00 psf.
Vacancy Rate
20.00%
Vacancy Rate
20.00%
Vacancy Rate
-32,401
Absorption
$18.80
Avg. Rental Rate
The backbone of the Baltimore Metropolitan Statistical Area
(MSA) is often considered to be the community and neighborhood
shopping centers which continue to dominate market activity with
a wide variety of small shop leasing. As vacancy rates tighten to
less than 10 percent, the uncertainty of consumer demand driven
by at income and job growth continues to place Landlords in a
position of exibility regarding rent reductions, rent abatement,
and TI concessions. Given the moderate inventory absorption
over the last quarter, tenant retention remains a top priority.
Average rental rates in our MSA for these centers have sustained
the national average of $17.00 to $24.00 per square foot (psf)
while the higher quality A centers in the MSA (ie: Baltimore City,
Annapolis, Howard County, York Road Corridor, etc..) the upward
pressure on rents are reaching the $35.00 to $50.00 psf range.
Tenant improvement allowances remain relevant, but discounts
and other concessions are scarce.
The success of The Shops at Canton Crossing Phase I, now 99
percent occupied, has developer Chesapeake Real Estate Group
pre-leasing phase II of the project and are rumored to have Dicks
Sporting Goods, Pier 1 Imports, and Nordstrom Rack leading the
tenant roster.
Local developer, Greenberg Gibbons, once again thrusts itself
to the forefront with its recent acquisition of Towsons 142,000
square foot (sf) Shops at Kenilworth from Towne Properties, of
Cincinnati, Ohio. Given Greenbergs rst class reputation, the
energy surrounding Towson will continue as they strive to create
the Best in Baltimore. The developer also announced the signing
of several notable national retailers for its Foundry Row project
in Owings Mills. Greenberg Gibbons regulars LA Fitness, Sports
Authority, DSW, Panera Bread, Ulta, and Zoes Kitchen, will join
emerging area concepts Smashburger and Nalley Fresh when
the project delivers sometime in late 2015/early 2016 leading
speculation to surround the Reisterstown Road market as
competing properties compete for top-tier retailers; less than a
mile away, David S. Brown Enterprises Metro Centre at Owings
Mills has delivered the rst phase 117,000 square feet of its
projected 300,000 square feet (sf) of retail space and recently
announced that Canadian-chain Eggspectation will be joining the
Fractured Prune, Time Square Kitchen, and Subway.
Baltimores $400 million Horseshoe Casino has been open just
over a month adding to the competition of destination gambling.
Optimism is high thought it is still too early to know the positive
effect casino trafc will have on the surrounding areas business
activity. With the traditional holiday shopping season fast
approaching, the pressure to open new locations by the end of
October remains high. As retailers compete for your consumer
dollar, look for innovative techniques in mobile payment options,
product promotions and the power of social media. All in the
name of satisfying your thirst to stay connected.
- W. Christopher Walsh
Vice President
BALTIMORE Retail oVERVIEW
THIRD QUARTER | 2014
[Link]
* All information furnished regarding property for sale, rent, exchange or nancing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions,
or changes in conditions, prior sale, lease or withdrawal without notice. All information should be veried to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 9/2014.
0
5,000,000
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Occupied Vacant
Conditions throughout the region continue to tighten with the exception
of the Reisterstown Road Corridor which continues to hover around
11 percent. Though this rate is considered by industry professionals
as "healthy", compared to its counterparts the York Road Corridor (2.68
percent) and Columbia (2.18 percent) the area remains somewhat vacant.
Multiple new projects in various stages of the pipeline are set to deliver
along the Corridor increasing competition. Baltimore City remains the
largest of the submarket with more than 1,500,000 million square feet
available. However, the market remains tight with a 6.65 percent vacancy
rate as larger locations absorbed leaving small in-line spaces available.
Absorption/Vacancy Rates
0.0%
1.0%
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6.0%
7.0%
8.0%
$10.00
$12.00
$14.00
$16.00
$18.00
$20.00
$22.00
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Rental Rate/Vacancy Rates
Vacancy Rates %
Avg. Rental Rates
The region dropped below the 5 percent mark for the rst time in recent
memory following several years of steady activity just below six percent
indicating tightening market conditions. The Columbia submarket
continues to garner the largest average rental rate, commanding
approximately $24.48 psf. The Annapolis and Fort Meade submarkets are
also routinely among the top average rental rates for the region at $23.00
psf and $22.86 psf respectively. Baltimore County East continues to
struggle at $14.76 psf even as neighboring submarket White Marsh/Perry
Hall averages $17.11 psf.
Highlights
Saint Agnes Hospital has leased 38,000 square feet (sf) of space at 40
West Plaza, the site of the former Room Store. The new multi-specialty
healthcare center will provide greater coordination of care and give
patients increased access to physicians specializing in primary care,
obstetrics and gynecology, a variety of specialists and services for
imaging and laboratory.
Merritt Park Shopping Center has signed Texas Roadhouse to the
newly remodeled center located at the corner of Holabird Avenue
and Merritt Boulevard. The steak chain was recently recognized by
Nations Restaurant News second annual Consumer Picks as the top
steakhouse.
Thomas Run Station sold for $5,500,000. The three retail buildings
portfolio on Churchville Road in Bel Air, Maryland is 100-percent leased
with tenants including Dunkin Donuts, State Farm Insurance, Goodwill
and La Garderie Childcare
Metro Centre at Owings Mills has signed Montreal, Canada-based sit-
down restaurant chain Eggspectation, 5,582 square feet of space. The
new Transit-Oriented Development (TOD) encircling the Owings Mills
Metro Station is the rst Baltimore County location for the restaurant.
Syracuse New York-based Dinosaur Bar-B-Que, a biker- and blues-
oriented barbecue chain, is opening its rst Baltimore location in Fells
Point. Currently under review with the Liquor Board, the space is
expected to be approximately 8,295 square feet at 1401 Fleet Street.
Stone Cove opened its second location, Marylands rst, in Bel Air Town
Center. Located at 502-592 Baltimore Pike, the restaurant features a
unique concept that places the guests in the kitchen allowing patrons
to interact directly with the Chef.
The Westview Promenade in Frederick Maryland signed leases with
[Link] for 3,000 sf and Plow & Hearth for 5,000 sf to open late this fall.
Wolf's Furniture is preparing to open an outlet store in the Ballenger
Creek Plaza in Frederick Maryland. The furniture store will be
occupying 40,000 sf of space formerly leased by grocer Super Fresh.
Chick-Fil-A has announced a second Baltimore City location. The
fast food chain will join CVS at 400 E. Pratt Street when the new
promenade space delivers later this fall.
BALTIMORE Retail oVERVIEW
THIRD QUARTER | 2014
[Link]
* All information furnished regarding property for sale, rent, exchange or nancing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions,
or changes in conditions, prior sale, lease or withdrawal without notice. All information should be veried to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 9/2014.
Notable Transactions
Lease
Location Submarket Tenant Amount Leased SF
6501 Baltimore National Pike Baltimore South St. Agnes Hospital 38,000 sf
10 Carroll Plaza Carroll County Home Goods 23,000 sf
5 Bel Air S Parkway Harford County AC Moore 24,000 sf
400 E. Pratt Street City Center CVS 9,660 sf
Location Submarket Price PSF Building Size SF
203 International Circle York Road Corridor $1,100,000 $922.13 psf 3,650 sf
6855 Loch Raven Boulevard York Road Corridor $2,250,000 $922.13 psf 2,440 sf
7657 Arundel Mills Boulevard Fort Meade $1,950,000 $620.23 psf 3,144 sf
Sale
Number of Buildings 2,363
Market Size 105,352,066 sf
BALTIMORE Retail oVERVIEW
