The vacancy rate for commercial office space in the greater Columbia metropolitan region rose minimally from 12.5 percent to 12.6 percent in second quarter 2021, even though positive net absorption nearly doubled to more than 200,000 square feet of space, according to a market report recently released by Lee & Associates | Maryland.
Approximately 275,000 square feet of space was leased in the second three months of 2021, which elevates the yearly total to approximately 500,000 square feet. The average asking rent for commercial office continues to rise and is now $25.56 per square foot, which represents a slight increase from the previous end-of-quarter rate of $25.50 per square foot.
Approximately 263,000 square feet of new space was delivered in the second quarter and only one significant new building – 8130 Maple Lawn Boulevard, a nearly 116,000-square-foot project in Fulton – is currently under construction.
“The significant takeaway from the second quarter is the continuing positive trend led by an increase in net absorption, combined with the significant amount of sub-lease space that has been removed from existing inventory,” said Bill Harrison, senior vice president, Lee & Associates | Maryland. “Several factors provide us with extreme optimism in the near future. Large technology and health-related groups call the Columbia-area home and, across the board, the great majority of companies are targeted Labor Day as the date when most employees will be asked to return to the traditional workplace. Suburban areas across Maryland and the United States are the beneficiary of corporate decisions to exit major urban areas to either establish a new office or implement a hub and spoke model that provides increased employee options and flexibility.”
Three significant investment sales were completed in second quarter 2021: 13922 Baltimore Avenue sold for $1.65 million, Columbia Aesthetic Plastic Surgery acquired 8860 Columbia 100 Parkway for just less than $900,000 and Caring Hands purchased 14333 Laurel-Bowie Road for $195,000.
“The Baltimore-Washington, D.C. commercial real estate market continues to prove its remarkable resiliency as driven by defense and government-related tenants and support from a highly-skilled labor market,” said Will McCullough, senior vice president, Lee & Associates | Maryland. “After nearly 18 months of below average leasing activity, we believe pent-up demand and the quest for high-quality office space in the suburbs will be prime factors favoring an extremely strong leasing environment in the Columbia submarket during the second half of 2021.”