Brokerage Outlook: Maryland

• Maryland Retail

• Maryland Industrial

• Maryland Office

Maryland Retail Submitted by Dicky Darrell with the Columbia, Maryland office of Manekin, LLC. Posted 10-29-07. What area is your expertise? • Maryland What trends do you see presently in retail development in your area? • More mixed-use development with retail as an important element What type of retail product is doing well in your area? • All retail is doing well particularly higher end merchants What retailers are new to your area? • Wegmans, Filene’s Basement, Arhaus Furniture and Urban Outfitters Who are the active retail developers in your area? • Greenberg Gibbons Commercial, Petrie Ross Ventures, Black Oak Associates, David S. Brown Enterprises Please name one or two significant retail developments in your area. What impact will these projects have on the market? • Parole Town Center in Annapolis is under construction and will include retail, multifamily, office and structured parking in a dense mixed-use development by Greenberg Gibbons Commercial. Whole Foods and Target will anchor the retail portion. Together with the expansion under construction at Westfield Shoppingtown Annapolis, which is adding 60 new stores, and the retail portion of Park Place in downtown Annapolis, these three projects will add nearly 1 million square feet of new upscale retail to the Annapolis market. • The first “green” shopping center in Maryland is under development by Black Oak Associates in Eldersburg. This Main Street design lifestyle center will be built as shadow retail to The Home Depot and Kohl’s. • Downtown Baltimore is also seeing a lot of mixed-use development with many upscale retailers setting up shop at the Harbor East development by H&S Properties Development Corp. and Struever Bros. Eccles & Rouse. These companies also will be developing the adjoining Harbor Point project. Combined, these projects will contain approximately 1 million square feet of retail and restaurant space, 2,500 residences, 7 hotels including the Four Seasons, and 3 million square feet of office space. • David S. Brown is also working on two important projects. Lockwood Place in the Baltimore Central Business District (CBD) near the Baltimore Aquarium is a 90,000-square-foot multi-level retail project anchored by Best Buy and Filene’s Basement. This firm is also completing Landsdowne Station at Interstate 695 and Route 1 south of Baltimore. This 420,000-square-foot center will be anchored by a Wal-Mart SuperCenter. Where is the majority of development taking place? Why is this area doing well? • Downtown Baltimore and Annapolis due to the high-income levels and stable employment. General Growth Properties is also finishing up their most recent power center in Columbia called Gateway Overlook. This project is anchored by Lowe’s Home Improvement Warehouse, Costco and Best Buy. Again, the Columbia market is attractive to retailers due to high-income levels and a large office market. What area do you expect to be the next big retail development market? Why? • Baltimore City will continue to see retail development since it has been under served for years. The BRAC initiative, which is expected to bring many people to Maryland, will have a major impact on all development in the central part of Maryland but Anne, Arundel, Howard, Harford and Cecil counties will see the greatest impact. Please describe the retail leasing activity in your area. • Very strong with major retailers looking to either enter or expand in this market Please give a measure of retail vacancy rates and a measure of available sublease space. • Vacancy rates (including sublease) for the Baltimore/Washington region continue to be very low and are currently less than 4 percent. What types of retailers should look into your market in the coming year? What type of retail is needed? • New and interesting concepts would do well in this market.

Maryland Industrial Caronna Submitted by James V. Caronna, SIOR, principal with Towson, Maryland-based NAI KLNB. Posted 12-14-05. What area is your expertise? · My area of expertise is in the Baltimore Metropolitan Area (Baltimore City/County, Anne Arundel, Howard and Harford Counties). What trends do you see presently in industrial development in your area? · Current industrial trends in the area include the redevelopment of older industrial buildings that have become functionally obsolete, but are strategically located near major highways and good employment bases. We have also seen some older industrial product morph into residential projects, if zoning can be obtained. In addition, the closure of several military bases in the region will become redevelopment opportunities as well. What type of industrial product is doing well in your area? · New construction, flex and bulk distribution are all product types doing well in the area. Who are the active industrial developers in your area? · Active industrial developers include St. John Properties, Lincoln, Liberty Properties, Merritt Properties, Preston Partners, FRP Development. Please name one or two significant industrial developments in your area. What impact will these projects have on the market? · Perhaps one of the more significant developments to come along in the metro area is along Coca-Cola Drive in Hanover, Maryland, which is a part of the Baltimore-Washington Corridor. These projects offer modern construction and state of the art amenities. Developers include Lincoln, Preston Partners and Merritt Properties. Where is the majority of development taking place? Why is this area doing well? · The preponderance of development currently taking place is in the Baltimore-Washington Corridor, near I-95. As the name implies, this submarket sits between two cities with a combined population of almost 8 million people and within 30 minutes of the nation's capital. This location spurs lots of interest from distributors, defense contractors and service industries that can easily take advantage of easy access to both cities and can capture business by their proximity to Washington, D.C. What area do you expect to be the next big industrial development market? Why? · The east side of Baltimore will see more than its fair share of industrial development over the next few years due to several factors, including the closure of the General Motors Plant in east Baltimore city, the redevelopment of Section 8 housing into industrial use along the eastern side of I-95 (also in the city), and the extension of Route 43 into east Baltimore County. Developers, working in conjunction with the state of Maryland, will bring a new generation of distribution, flex and office space into these areas. Please describe the industrial leasing activity in your area. · Although there are pockets of higher-than-average vacancy in limited submarkets, the overall industrial leasing market can be described as balanced with a healthy (but not overbuilt) availability of warehouse and flex space. Please describe the industrial sales activity in your area. · Industrial sale activity is extremely brisk and because demand outpaces supply, prices have been consistently escalating. Please give a measure of industrial vacancy rates. Please give a measure of available sublease space. · Industrial vacancy for the Baltimore Metro Area is approximately 12 percent, with sublease space making up approximately 1 percent of that total. (The Baltimore Metro Area includes Baltimore City/County, Anne Arundel, Howard and Harford Counties.) What impact do current interest rates have on the industrial market? What predictions do you have for interest rates and their effect on the industrial market in 2006? · Continued low interest rates have spurred industrial development, caused purchase prices to spike upward, and dramatically increased the pool of buyers into the marketplace. While we have seen a modest rise in rates, we predict the pace of industrial activity will remain strong for both the leasing and sales market in the near term for our area. What industries do you expect to expand in 2006 to absorb a great deal of industrial space? What areas will be affected? · The defense industry will play an important expansion role in this market, given the area's proximity to Fort Meade, NSA, and the District of Columbia. In addition, we expect retail and other hub distributors to seriously look at the region because of several large big box availabilities of 600,000 square feet or larger. Would you like to make any additional observations about the industrial market in your area? · We believe that the leasing market will hold steady as lease rates move in an upward direction over the foreseeable future. As land availability dwindles, interest rates stay modest, and investment money is geared towards real estate, sales will continue their blistering pace and upward price surge as product demand continues to far exceed supply.

Maryland Office Submitted by J. William Miller, senior vice president, with the Towson, Maryland, office of NAI KLNB. Posted 12-14-05. What area is your expertise? · Baltimore County and the state of Maryland. Who are the active office developers in your area? · Liberty Property Trust, Corporate Office Properties Trust (COPT), Brown Development, Merritt Properties, Hale Properties Please name one or two significant office developments in your area. What impact will these projects have on the market? · Canton Crossing: This project (426,000 square feet) is being developed by Hale Properties. This development is on the waterfront and is located in the eastern part of Baltimore City. To date, this project has been received extremely well. · Gateway Exchange #2: This project is being developed by Corporate Office Properties Trust (COPT) and is a continuation of a development by COPT in the Columbia, Maryland, area. This particular building is 125,000 square feet. COPT has been extremely successful with office development in the Columbia area. Where is the majority of development taking place? Why is this area doing well? · East Baltimore along the waterfront, the area around the Baltimore/Washington International Airport (BWI) and the Columbia area. Waterfront sites continue to attract tenants and Columbia and BWI areas continue to grow due to their location and access to NSA (National Security Agency). What areas are doing well in terms of office leasing? Which areas are struggling with office leasing? · The areas within Baltimore City that have waterfront views and the Baltimore/Washington corridor are doing very well. There do not appear to be any areas that are struggling. What impact do current interest rates have on the office market? What predictions do you have for interest rates and their effect on the office market in 2006? · Obviously the lower interest rates have given developers the ability to be very competitive with their rental rates. As interest rates increase, it will put more pressure on office rental rates. Is there any type of office tenant absorbing a majority of space? What industries do you expect to expand in 2006 to absorb a great deal of office space? What areas will be affected? · In the Baltimore/Washington corridor, there have been many defense contractors who have re-spaced in the last 24 months. This does not appear to be slowing. Would you like to make any additional observations about the office market in your area? · The office market surrounding BWI appears it will continue to grow.