Birth of a warehouse Nottingham encore: The master developer of White Marsh is set to add a 445,000-square-foot distribution center, and some are wondering who will fill all the space.

April 17, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Nottingham Properties Inc. intends to join the speculative industrial development frenzy later this month with a new $15.6 million warehouse, a building the firm believes will add another dimension to the development of the White Marsh business community.

"White Marsh is at a point in its overall development where we feel it's appropriate to offer this type of product," said John H. Macsherry Jr., a vice president of Nottingham, White Marsh's master developer and land owner.

White Marsh, which contains 3.2 million square feet of commercial space, has only one other major distribution center: A $40 million warehouse completed last year for Time Warner Inc.

But with construction about to begin on the speculative White Marsh Commerce Center -- the sixth such project to be announced in the metropolitan area this year -- some local real estate analysts are questioning whether the added space will be too much of a good thing, and who will fill the space.

Those six projects will add more than 1.5 million square feet of new industrial space around the end of the year, a daunting figure equal to five downtown skyscrapers.

"I think the White Marsh project will be a home run, primarily because Nottingham has a good location, right off Interstate 95," said Daniel W. Colhoun, a vice president of Preston Partners Inc., an area real estate firm.

"But timing will be critical," he said. "The first 500,000 square feet to get to market will be much more successful than the rest."

Mr. Colhoun added that historically low industrial vacancy rates, subsequent rising rental rates and current tenant demand for about 6.5 million square feet should contribute to the Commerce Center's success.

Nottingham officials agree that White Marsh provides its project an edge, despite competition from the likes of UPS Properties, Manekin Corp., Security Capital Industrial Trust, AMB Institutional Realty Advisors and the James F. Knott Realty Group.

"We have a location and access that's as good or better than our competitors," said J. Joseph Credit, a Nottingham senior vice president and its director of commercial development. "And that's important because one of the keys to the distribution business here is access to the port of Baltimore and the highway system linking the area with Washington and New York."

Nottingham plans to complete the first phase of the 445,000-square-foot distribution center in October. Space there will rent for $4.75 per square foot.

The Commerce Center project represents only one of three new buildings about to spring up in White Marsh, a 2,000-acre planned community in the southeast section of Baltimore County.

In all, the three new projects and related infrastructure have a total value in excess of $28 million and will house nearly 700 employees.

The other two projects about to begin construction, a new four-story Hampton Inn hotel and an expanded North American headquarters for a division of Europe's Danfoss A/S, are slated to create 60 new jobs.

The Commerce Center project could generate as many as 450 jobs, based on its size, economic development formulas for job creation and potential office component.

Mr. Credit said the projects represent the first wave of new development in White Marsh, where Nottingham also hopes to construct a $45 million complex of theaters, restaurants and retail known as the Avenue at White Marsh.

The company, which also is working to expand a $34 million retail center called Nottingham Square, plans to debut the Avenue in the fall of 1997.

Inn to be a first

In the case of the hotel, Hampton Inn will become the first lodging property in White Marsh.

"A lot of companies in White Marsh now have to send out-of-town guests to hotels in Baltimore City or Towson," Mr. Credit said. "And for Nottingham, it continues the effort to add community services."

The 127-room hotel will contain meeting space for 100, an amenity that is becoming increasingly important for lodging projects, said Glen Marsh LLC President James Dresher, the project's franchisee.

"Hampton Inn is a strong brand name with a strong future and extremely high standards," said Mr. Dresher of Hampton Inn's parent, Promus Hotel Corp.

The hotel is expected to open Nov. 1.

Although the new single-story, 43,000-square-foot headquarters being developed for Danfoss is smaller than the other projects, Nottingham has reason to be most proud of it.

That's because the Automatic Control unit of the $2 billion Danish firm, which manufactures and distributes components for refrigeration and air conditioning systems, has grown in 10 years from 7,000 square feet to its present size, and all while a Nottingham tenant.

Under a lease with Nottingham valued at roughly $6.4 million, Danfoss will remain in White Marsh through 2006. The company also has the option to expand its new $3 million building to 51,000 square feet.

Danfoss required a larger facility because it recently consolidated operations -- and roughly 30 employees -- from Fort Myers, Fla.

"The new headquarters will get us all under one roof, and we'll have a facility laid out specifically for our requirements," said Robert W. Wilkins, president of Danfoss Automatic Controls.

Pub Date: 4/17/96

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