Office Space 18% Vacant, County Finds

September 05, 1991|By Lorraine Mirabella | Lorraine Mirabella,Staff writer

New construction and a poor economy last year has left 16.3 percent of the county's office and warehouse space empty, as commercial builders and brokers throughout the Baltimore region struggle to find tenants.

County economic development officials released their estimateof the vacancy rate yesterday in the county's first survey of the office-warehouse space market.

Of 3.4 million square feet of available office space surveyed, 18.1 percent remains empty; of 3.8 million square feet of industrial space, 14.6 percent is vacant.

Though the survey covers Anne ArundelCounty alone, Legg Mason Realty Group's 1991 review shows the countyin line with the region, including Baltimore city and county and Howard, Carroll and Harford counties. The region's office vacancy rates ranged from 18 percent to 20 percent, while industrial vacancy rates averaged about 16.9 percent, David K. Wells, Legg Mason research associate, said.

The results came from a sample -- about 7.2 million of a total 24 million square feet -- of office, flex, warehouse-distribution and research-development space. More than half lies near the Baltimore Washington International Airport, while about a quarter liesin Annapolis and Parole.

The county sent questionnaires to some 200 developers, owners and real estate brokers in July. Though only 40percent responded, Patrick Gonzales, a business development representative for the county, said the sampling fairly represents the county's supply of office and industrial space.

The county never has surveyed the market before, but Gonzales estimated that an onslaught of new offices and warehouses last year drove up the vacancy rate by a couple of percentage points.

In 1990, developers built 685,185 square feet of office space but leased only 20.6 percent, or 141,092 square feet, the survey showed.

"This new space, coupled with the softness in the market, has obviously contributed to a rise in office vacancy over the past year," the report said.

The BWI area has a higher office vacancy rate, at 23.9 percent, than the Annapolis-Parole area, at 15.5 percent, results showed. Also notable was a 62 percent vacancy rate in high-rise offices, compared with a 16.9 percent rate inlow-rise offices and a 9.9 percent rate in mid-rise buildings.

Rates in both the BWI area and the high-rise market were driven up by the One National Business Park project near BWI, which remains nearly empty.

At the time of the survey, developers throughout the countywere building 318,144 square feet of office space -- most of that a Westinghouse project to relocate the company's offices.

Most of the warehouses are clustered near BWI, where the industrial vacancy rate is 16.5 percent, the survey showed. Of the 713,606 industrial square feet built last year, the owners were able to lease more than half.

Anne Arundel is experiencing similar problems to nearby Baltimorecity and county and Howard County. Those areas have lost office tenants, prompting developers to file for Chapter 11 bankruptcy, more banks to foreclose on borrowers and real estate developers and service firms to refocus their businesses.

In Anne Arundel, empty offices result less from an exodus than from an oversupply of new buildings leased at a slower rate than two or three years ago, he said.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.