Second-Quarter Net Office Absorption Doubles in Columbia, Md.
The commercial office market in the greater Columbia, Md., region is stabilizing, with the pandemic leading to greater demand for suburban office.
The vacancy rate for office space remained relatively flat, increasing slightly from 12.5 percent to 12.6 percent in the second quarter of 2021, even though positive net absorption nearly doubled to more than 200,000 square feet of space, according to a new report by Lee & Associates of Maryland.
In Q2, 275,000 square feet of space was leased, bringing the total for 2021 to 500,000 square feet. The average asking rent increased to $25.56 per square foot, up from $25.50 per square foot in Q1.
“After a year of extreme uncertainty, the Columbia Market is now stabilizing,” Bill Harrison, a Lee & Associates of Maryland senior vice president, told Commercial Observer. “Significant activity is emerging from companies’ presence in the downtown area to provide flexible work options for its employees. In fact, we are making it a point of emphasis to target these groups by offering lower rents, shorter commutes and free parking.”
The report reveals that suburban office buildings are the beneficiary of this movement — with Howard County, especially, given its strategic placement between Baltimore and Washington, D.C.
“We believe Columbia’s central location is a primary driver of market activity,” Harrison said. “Howard County benefits from a highly educated workforce needed to support the many tech, medical and defense-oriented employers.”
During the second quarter, more than 200,000 square feet of space was absorbed, and another 115,000 square feet is currently under construction at 8130 Maple Lawn Boulevard in Fulton, Md.
Three significant Maryland sales were finalized in Q2: the $1.65 million sale of 13922 Baltimore Avenue in Laurel; Columbia Aesthetic Plastic Surgery acquiring 8860 Columbia 100 Parkway in Columbia; and Caring Hands acquiring 14333 Laurel-Bowie Road, also in Laurel.
Unless things change materially in relation to COVID variants, Harrison noted that the market should continue to recover and grow.
“The state of Maryland has a high percentage of vaccinated population. Combine that with business management’s desire to have employees return to some level of an office environment, [that] should support that growth,” he said. “I believe companies yearn for employee collaboration and a higher level of productivity, and many employees wish to escape their homes and apartments.”