Office space at a premium in Columbia

75,000-square-foot building to take place of former Rusty Scupper

Howard Business

May 08, 2000|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

About a year from now, workers will occupy lakefront offices in a six-story, steel-frame building of precast concrete and green glass where the Rusty Scupper restaurant once stood.

"We bought it with the idea of making it an office building," said David Costello, president of Columbia-based Costello Construction Inc. and one of four developers on the project.

The old Rusty Scupper building will be razed next month. The new building is expected to be complete by spring 2001. Its leasing agent anticipates that at least a quarter of the new, 75,000-square-foot building will be spoken for before construction is complete -- an occurrence he says that is not unusual for Columbia.

With new offices going up nearly every year in Columbia, officials say businesses are gobbling up the space as fast as it can be built.

"They're being leased out before they're putting a roof on," said Hayes Merkert, senior vice president of Manekin Corp. and the leasing agent for the old Rusty Scupper building.

In 1997, the net amount of office space absorbed in Columbia was 175,543 square feet. In 1998, it jumped to 271,367 square feet, and last year that number exceeded 500,000 square feet, said Merkert, adding that this year's numbers are expected to be even higher.

"The trend has been just a phenomenal growth," said Merkert, who specializes in office leasing in Howard and Anne Arundel counties.

In 1995, office space in Columbia had a vacancy rate of 9 percent, according to figures provided by Manekin Corp. That number has dropped to 5.6 percent, with more offices to fill now than five years ago.

In fact, space is so tight these days that when Magellan Health Services Inc. was looking for a larger space, the company moved from the mall area to Gateway, said Christine Verdon, a spokeswoman for Magellan Health.

Verdon added that Magellan Health also moved in part to consolidate with its operations in Gateway and to be able to link offices with the fiber-optic cable available at Gateway.

Alton Scavo, senior vice president of the Rouse Co., said the Gateway and downtown office markets differ in that the former gives companies room to grow horizontally while the latter allows them to grow vertically.

Offices in Gateway, for example, have room for manufacturing, design work and product testing, whereas downtown offices are better suited for a company that can be broken down into different departments on each floor, he said.

Still, the office market in Columbia looks quite different than it did 10 years ago.

Joseph W. Rutter Jr., director of the Howard County Department of Planning and Zoning, said that during the early 1990s, Gateway Drive was the place to be. Now, more and more office buildings are going up in the town center.

"The town center area is building back up," Rutter said. "Occupancy rates are high. It's class A space."

One reason for that, Rutter and other officials said, is an upgrade to The Mall in Columbia.

A new wing was added to the mall in September, and over the next year and a half, more than a dozen retail shops, a movie theater, a 30,000-square-foot LL Bean store and three restaurants will be added. Mall officials are also planning a renovation of the food court.

"They're the kind of amenities that people are finding their employees are demanding," Rutter said of the mall upgrades.

But they're also the kind of amenities that can push up the price of office space around the mall.

The cost of leasing an office has gone from between $16.50 and $18 a square foot in 1995 to between $23.50 and $24.50 this year, according to figures provided by Manekin.

Office space in the structure will replace the Rusty Scupper building will rent for $26.50 a square foot.

The cost of the new building, including adding an elevator and another level with 140 spaces to the adjacent parking deck, is $10 million.

What was once a local restaurant will be razed and transformed into a white and tan office building with green glass, a marble-floored lobby and a view of the lake.

"Clearly, the lakefront is significant in our interest in this site," said Caleb Gould, a developer on the project. "There are very few opportunities to build on a lakefront in a town center environment."

More office space could be added to the town center in the next year or two.

The Rouse Co. is considering putting up a building near the mall, next to the Ryland Homes building, according to Scavo.

Rouse buildings in downtown Columbia have always had occupancy rates in the mid to upper 90-percent range, with new buildings coming online nearly every two years, said Scavo. He added that two-thirds of the last building the Rouse Co. erected near the mall, Park Square, was leased out before much of the steel was up.

Pub Date: 5/08/00

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