Commentary: Baltimore real estate markets lack consistency in 3Q

Daily Record, The (Baltimore), Nov 29, 2004 by Shelly Schwartz

The largest flex market purchase was made by Mullan Enterprises of Lutherville, which purchased three buildings totaling 125,000 square feet at 1350-1370 Blair Drive in Odenton for $11.2 million.

Retail maintains growth

Local retail developers are busy giving worn-down storefronts a facelift, as tenant demand for modern amenities spurs redevelopment.

And with strict zoning laws in place to prevent urban sprawl, experts say that trend is likely to continue.

This is certainly a very positive trend for older properties, said Thomas Maddux, president of the KLNB Retail brokerage firm with offices in Towson, Columbia and Tysons Corner, Va. It's been going on for a long time now. We really don't have the zoning to build new properties, so that's forcing redevelopment.

For the Baltimore metro region, third-quarter vacancy rates at neighborhood shopping centers stood at 5.1 percent, up from 4.9 percent in the second quarter of this year, but down from 5.3 percent in the year-ago quarter.

According to Maddux, the Baltimore-Washington retail market remains one of the country's hottest, positioning builders to weather economic storms better than those who focus on the office, industrial and flex markets. The market also is more stable because it is treated less like a commodity, with little to no speculative construction.

This is a very affluent, well-educated area, and retail activity is based on disposable income, Maddux said. Retailers are very interested in being in this market, and that hasn't necessarily been true in other parts of the country.

Retail real estate is a diverse market that includes everything from regional malls to power centers anchored by big-box retailers including Target and Home Depot, which continue to pepper the Baltimore area landscape. Entertainment-lifestyle centers, grocery stores and freestanding fast-food chains also are included in the mix.

During the quarter, local grocer Giant Food opened a new store in the Waverly section of Baltimore. Wegmans Food Markets is close behind. The grocery chain plans to open its first regional store in Hunt Valley Town Center next summer - one of the area's most highly prized retail zones.

Columbia, Towson, Annapolis and Bel Air also are witnessing a retail surge.

At least one mixed-use redevelopment initiative expected to attract new retailers includes Harbor East, an ongoing entertainment- lifestyle center on Baltimore's waterfront, which already is home to a Whole Foods Market grocery store, the Harbor Bank of Maryland, the Baltimore Exchange Co. boutique shop and Bin 604 wine shop. Gaines McHale Antiques and Home, an antique and home-furnishings store, is expected to open there next year.