Although nearly 350,000 square feet of commercial office space was leased in the second quarter of 2022, the overall vacancy rate in the Columbia area ticked up slightly to 13.2 percent, after finishing the first quarter at 12.7 percent, according to the latest market report released by Lee & Associates | Maryland.
Negative net absorption rose to nearly 24,000 square feet from 14,000 square feet, but the average rental rate rose slightly again to $26.48 from $26.45 per square foot, which continued a recent trend, according to the Columbia-based firm.
“The Columbia office market continues to slightly fluctuate, but there were no major changes during the past three months as employers strive to lure employees back to the traditional workplace,” said Bill Harrison, senior vice president, Lee & Associates | Maryland. “We are seeing a flight-to-quality with newer buildings and their attractive and diverse amenities drawing the attention of prospective tenants. There is persistent activity among down town-based companies interested in establishing a hub-and-spoke model in less-dense suburb locations, which is also driving activity. Rising interest rates and the prospects for inflation have pushed some companies into a wait-and-see mode, which is delaying real estate decisions.”
Significant lease transactions included the 85,000-square-foot lease by CareFirst BlueCross BlueShield, at 6100 Merriweather Drive; the 63,600-square-foot lease executed by Merkle at 7001 Columbia Gateway Drive; and the 21,000-aquare-foot lease signed by Venture X at 8865 Stanford Boulevard.The sales transaction volume eclipsed $76 million, led by the $37 million purchase of Old Dobbin Business Park, Columbia, by Goodier Properties. Other significant sales were Betnall Green Oak’s acquisition of 4801 Dors ey Hall Drive, Ellicott City for $21.3 million; and the $6 million purchase of 9811 Mallard Drive, Laurel.
No commercial office buildings were delivered in the second quarter and only two buildings, totaling 80,000 square feet of space, are currently under construction. This includes the 60,000-square-foot building at 7140 Contee Road, Laurel; and a 20,000-square-foot project at 6761 Dorsey Road, Hanover.