WHAT IS THE vacancy rate of top-quality office space in Annapolis?
If you had been on last month's commercial real estate tour held by the Anne Arundel Economic Development Corp. and the Anne Arundel Trade Council and answered that question correctly, you could have won a coffee mug.
In Maryland's capital, the amount of available Class A space in the newest office buildings with modern amenities is shockingly low. I am not going to reveal it just yet, however. You will to have to read on.
A week and a half ago, the county's primary economic development organizations took more than 75 people on a six-hour tour of industrial, business and office parks. Guided by a police escort, commercial real estate agents, developers and investors settled back in two luxury buses to get a glimpse of the local commercial real estate market.
The overwhelming impression: Anne Arundel's economy is in good shape.
Vacancy rates for warehouse and industrial buildings hovers at about 11 percent. If a couple of large buildings that once housed defense contractors in the Bay Meadows Industrial Park and Airport Square Business Park were leased, the number would be halved.
But not all the economic indicators are so comforting.
Two days before the tour, C.M. Kemp Manufacturing Co., a company that makes industrial dryers, said it would be moving its manufacturing operations and about 100 jobs to Ocala, Fla., after operating for 35 years in Glen Burnie. Kemp joins a continuing exodus of the higher-paying manufacturing jobs from the county.
For the past 15 years, Anne Arundel's manufacturing jobs have been disappearing. In the past eight years, several thousand skilled manufacturing and technical workers at defense
contractors such as Westinghouse Electronics (now Northrop Grumman) and Martin Marietta (now Lockheed Martin) have been laid off.
Anne Arundel's manufacturing base is about 72 percent of what it was just six years ago, according to the Regional Economic Studies Institute at Towson State University.
Despite the loss of these jobs, Anne Arundel isn't suffering an unemployment crisis. The county's jobless rate continues to be about 4.3 percent, considerably below the state and national averages.
The problem, if there is one, is that most of the new jobs created are in service industries, which generally pay less than those in manufacturing.
The impact of smaller paychecks reverberates through the county's economy. With less aggregate income, retail sales begin to drop. When stores aren't as busy, retailers lay off help or close stores. Tax revenues also decline. Local government then has to hold back expenditures.
The most recent economic data shows that local income tax collections are running about 17 percent behind those of last year. Sales taxes are about 4 percent lower than those of the previous year.
While the current data may be slightly discouraging, the picture looks much better from the seat of a luxury bus.
As the tour wound its way through a half-dozen or more industrial parks two weeks ago, it appeared that Anne Arundel's business community is doing quite well.
Whether at the I-97 Business Park off Benfield Road, the Brandon Woods Industrial Park in Marley Neck or the Baltimore Commons Business Park off Dorsey Road, all seemed to be bustling. At least one commercial Realtor complained that so little turnover meant fewer commissions for him and his colleagues.
Virtually all the owners of the dozen or so industrial parks the group visited said they were thinking of expanding existing buildings or adding new structures.
In those few business parks with empty buildings, none of them had been languishing on the market for years. Given their proximity to the Port of Baltimore and Baltimore-Washington International Airport, the consensus on my bus was that it is just a matter of time before a warehouse or distribution company snaps up this vacant space.
While the building frenzy at and around BWI is certainly something to behold, however, it pales next to the planned activity around Annapolis.
Constellation Properties, BGE's development arm, is planning to build an office complex on a large parcel on Jennifer Road across from the Annapolis Mall. Initial plans call for construction of a nine-story office tower with others to follow. Other developers are looking at vacant sites for more offices.
Driving this spurt of development in Annapolis is the minuscule 1.7 percent office vacancy rate.
Right now, that statistic is one of the comforting economic indicators in Anne Arundel. As long it remains low, the current building boom is not likely to stop any time soon.
Brian Sullam is The Sun's editorial writer in Anne Arundel County.
Pub Date: 5/05/96