The vacancy rate for commercial office space in the greater Howard County metropolitan region rose 1 percent in fourth quarter 2020 and stood at approximately 12 percent at year-end, according to a report recently released by Lee & Associates | Maryland.
Although more than 430,000 square feet of space was leased in the fourth quarter, the submarket experienced a negative net absorption of more than 220,000 square feet of space. Nearly 400,000 square feet of space is currently under construction in Howard County. The average asking rent for commercial office product dropped slightly to $25.31.
“Based on the entirety of negative economic news throughout 2020, the general feeling in the Howard County market is that ‘things could have been considerably worse,’ and, in fact, most developers, brokers and end-users are optimistic for a 2021 rebound,” stated Bill Harrison, senior vice president, Lee & Associates | Maryland. “With a sizeable number of modern buildings, an incredible amenity base and a strategic location between two major cities, this suburban office market should recover more quickly than others around the country.”
Net absorption decreased by more than 160,000 square feet of space from third quarter to fourth quarter last year. The largest commercial office buildings under construction are a 263,000 square foot building at 11100 Johns Hopkins Road, and a 109,000 square foot building at 8130 Maple Lawn Boulevard. The largest office space was a renewal signed by Maxim Healthcare Services for 146,792 square feet of space at 7223, 7229 and 7225 Lee Deforest Drive.
Three significant investment sales were completed in fourth quarter 2020. St. John Properties acquired 14400 Sweitzer Lane; Berman Enterprises purchased 14502 and 14504 Greenview Drive; and Kenwood Management Company acquired 9175 Guilford Road.
“There has been a definitive shift to the suburbs as companies continue to seek less dense office environments, while also seeking locations where employees are not reliant on public transportation,” Harrison added. “In many cases, firms with urban locations are creating satellite offices close to where their employees live outside the beltway.”