Columbia Gateway due for expansion

3 more office complexes planned for business park

June 22, 2005|BY A SUN STAFF WRITER

Responding to a robust rebound in demand, Corporate Office Properties Trust, one of the largest developers and managers of commercial office space in the Mid-Atlantic, is launching an ambitious expansion in Columbia Gateway with the construction of three office complexes in the 635-acre business park.

Technically, the company has announced four projects, but one of them already is well under construction and came as no surprise.

Randall M. Griffin, president and chief executive officer of the company, also said that the firm will relocate its headquarters to Columbia Gateway from its offices on Centre Park Drive.

The projects will all be Class A buildings, which bring premium rates, and they include:

Gateway Exchange III, which will be the final leg of a three-building campus near the entrance of the sprawling business park, just off Route 175. The building will be six stories with 150,000 square feet of rentable space.

Southridge I and II, both of which will be four stories with 110,000 square feet. Those will be built on land adjacent to Samuel Morris Drive, deeper in the office park. Although the company said it has no firm schedule for groundbreaking, Griffin said it may occur next spring. He said it is possible both buildings will be constructed simultaneously.

Construction of the fourth structure, Gateway Exchange II, began this year. It will be five stories with 125,000 square feet and be the mirror image of Gateway Exchange I, the first of the three-building campus.

Griffin said the company's headquarters will relocate either to Gateway II or III.

Plans to build so many office complexes are in sharp contrast to the market conditions of the past few years, which produced excess capacity and few new projects.

After the technology collapse - particularly in the so-called dotcom sector - at the turn of this decade, the overall vacancy rate in the area soared to about 25 percent, and few, if any, developers invested in new office buildings without lease commitments in hand.

Currently, the overall vacancy rate has dipped into single digits, and the market is tighter for Class A space.

"Things have turned around," Griffin said. "The timing is right."

Richard W. Story, chief executive officer of the county's Economic Development Authority, said the expansion announced by the company is prudent.

"Knowing the company and its clients base and the drivers of this construction, it's not surprising at all," Story said. "If you don't have bricks and mortar, you really don't have anything to sell, other than a concept. If they can get a leg up, they win."

Significant forces behind the demand for office space, Story said, are the departments of Defense and Homeland Security.

"Our proximity to Fort Meade positions us for this construction," Story said. "But it also provides inventory available to other contractors."

When the construction is completed, Corporate Office Properties will have 19 office buildings in Columbia Gateway and more than half of all the rental space in the park. The firm owns 147 properties, totaling more than 12 million square feet in rentable space.

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