Danielle Beyrodt, Hill Management Services; Eric Walter, Greenberg Gibbons; Danielle Bridge, Hill Management Services; Patrick Smith; MacKenzie Commercial Real Estate Services; Lizzy Sweeney, Cushman & Wakefield, and Denise Kramer-Buchman, Hunt Valley Business Forum
Hunt Valley Towne Centre is proceeding with the 3.0 version of its concept plan, the Medical Office Building (MOB) sector is among the strongest performers in the Baltimore County real estate market, and both vacancy percentages and rental rates have ticked up in the warehouse/industry asset class. Those are among the highlights and takeaways presented at the Hunt Valley Business Forum’s 11th annual Commercial Real Estate Symposium, attended by more than 150 business owners, brokers and landlords at the Executive Plaza complex. Presenters included Lizzy Sweeney, Senior Director, Cushman & Wakefield; Patrick Smith, Vice President, MacKenzie Commercial Real Estate Services; and Eric Walter, President, Greenberg Gibbons. Located at 11350 McCormick Road, Executive Plaza is a four-building, 550,000 square foot, mixed-use business community owned and managed by Hill Management Services, Inc.
New residential products highlight Hunt Valley Towne Centre 3.0
The delivery of new retail projects, both locally and nationally, has nearly completely dried up, explained Walter of Greenberg Gibbons which is among the major reasons why the national occupancy rate now exceeds 95 percent. “It is all about supply and demand and, with retailers and restaurants performing exceptionally well, it is an exciting time to be a shopping center owner and landlord,” he explained. “We have fully recovered from the pandemic and then some.”
Locally, Hunt Valley Towne Centre (formerly Hunt Valley Mall) has come a long way since being prominently featured on the infamous Dead Malls website more than two decades ago. In fact, the reformulated mixed-use development ranks as the fourth most-visited lifestyle center in Maryland with consumers making more than 7.1 million visits (up from 6.8 million last year) to the project. The average consumer dwell time, a key metric used to gauge the popularity and success of retail centers, is 55 minutes.
When the asset was repositioned into Hunt Valley Towne Centre and attracted the first Wegmans Food Markets in the greater Baltimore metropolitan region – as well as nearly 60 complementary retailers – that was version 1.0. The next phase, incorporating multifamily product around the center and converting a portion of the retail space into commercial office use, represented 2.0. Greenberg Gibbons is now deep into version 3.0 highlighted by the recently-opened Brightview Senior Living and its independent, assisted living and memory care product. “Brightview reports the fastest or second fastest lease-up among any of its projects in Hunt Valley,” Walter added.
Hunt Valley Towne Centre continues to evolve and Greenberg Gibbons is set to unveil a reimagined common area in late spring 2025, which will host special events such as concerts and movie nights to further enhance its family-oriented environment.
In post-pandemic world, tenants taking a “flight to quality” approach
“Companies are still struggling to lure employees back into the office on a full-time basis after spending millions of dollars to make remote work possible during the pandemic,” Cushman & Wakefield’s Sweeney said. “The winners in this competition are those landlords and owners that are refreshing older and dated buildings with new interiors and exteriors. Tenants notice the investment and, while downsizing, are willing to pay a bit more rent to relocate into modern or recently-updated assets.” Sweeney points out the Executive Plaza as a prime example of a complex that reinvested more than $15 million in updates, including the addition of employee-centric amenities.
“Those companies which have shed space and right-sized in response to the habits of its workforce, a flight-to-quality approach is common,” Sweeney added.
David Karceski, Venable LLP; Christopher Keelty, HWK Law Group; Jennifer Busse, Rosenberg Martin Greenberg
“The suburban office market remains in a recovery mode with a vacancy level exceeding 18 percent,” she said. “One bright spot is the Medical Office Building sector where the vacancy rate for this asset class in Towson is 8 percent. Hospitals are choosing to open facilities closer to where their patients live, and these decisions are rewarding owners of suburban office buildings and retail centers.”
In the bad news department, Sweeney said construction build-out costs are “the highest she has experienced in her career” which is impacting real estate decisions.
She added that “clients don’t come first, rather, employees do. So, if you take care of your employees, they in turn will take care of your clients.”
Pace of warehouse/industrial leasing slowing but remains strong
Industrial/warehouse buildings have been the darlings of commercial real estate industry for years but, while its star billing is starting to fade a bit, the asset class remains strong, according to Smith of MacKenzie Commercial Real Estate Services. A combination of factors including Amazon giving back large amounts of space, more uncertainty during a presidential election year, and the inability to sustain the unprecedented pace over the past three to four years are the main contributing factors.
Still, Smith told the audience, the asset class remains strong including in the northern Baltimore County region. In the warehouse sector, rental rates are rising and exceed $10 per square foot, triple net, the vacancy rate is less than 4 percent in the I-83 corridor, and the volume of cold storage transaction has increased nationally due to demand for grocery delivery concept and the restaurant industry making a comeback following the pandemic. Over the past year, the average flex/industrial deal size in the I-83 corridor was approximately 8,400 square feet of space.
Christopher Burnham, KLNB; Danielle Beyrodt, Hill Management Services; Shawn Goldfaden, Land Services USA; Henson Ford, MacKenzie Commercial Real Estate Services
Notable vacancies are the 115,000 square foot space at 10820 Gilroy Road and the adjacent 80,000 square foot space at 10830 Gilroy Road. The largest lease transactions in recent months were the nearly 28,000 square foot space leased by the Dill Dinkers pickleball venue at 10912 York Road and R.F. Fager’s nearly 20,000 square foot lease at 21-23 W. Aylesbury Road.
Prominent sales include 60 Loveton Circle selling for $4.3 million; 221 Cockeysville Road trading for $3.75 million, and 2001-2203 selling for $2.1 million.
Ground is planned to be broken at Hunt Valley Exchange, a 17-acre parcel fronting York Road being developed by St. John Properties which intends to deliver approximately 110,000 square feet of flex/R&D and retail space in 2026.
Predictions for 2024 include rent increases due to the presence of less inventory, continued sale price increases caused by no inventory and lower interest rates and the continuation of few new developments.
“There is no shortage of activity, which not every market around the country can say, so we need to remain thankful for that aspect,” Smith added. “All in all, the greater Timonium/Hunt Valley market remains vibrant and, with healthy demographics and a strong labor market, we expect this strength to continue in the foreseeable future.”
Hunt Valley Business Forum is the fastest growing business association in Baltimore County that supports, advocates, and leads growth for businesses from Lutherville to Sparks, Maryland. HVBF has been supporting the business community with informative panel discussions and networking events monthly and advocacy with public policy and membership committees. For more information, visit www.hvbf.org.
