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FIRST QUARTER | 2014 MacKenzie Market Report Office Submarkets www.mackenziecommercial.com OFFICE | MACKENZIE MARKET REPORT Overview Market Outlook By: Anirban Basu, Sage Policy Group FIRST QUARTER | 2014 T Quick Stats Number of Buildings Market Size 1,229 76,577,308 sf CHANGE SINCE LAST CURRENT Direct Vacancy Vacancy W/ Sublet Net Absorption Avg. Asking Rate 14.53% 15.13% 437,100 sf $22.29psf QTR     YR     here are many economists who predict that 2014 will eventually represent the strongest year of economic expansion since recession’s end in mid-2009. This expectation is based at least in part on the momentum generated by the national economy during the latter half of 2013. The nation has added more than 2 million jobs over the past year, with nearly a third of that associated with professional and business services, a segment that makes heavy use of office space. Local employment growth has also tended to favor office space using sectors. The region added 12,400 jobs between February 2013 and February 2014, which represents 0.9 percent employment growth. That falls well short of the national rate of job expansion during that period (1.6 percent), but well in advance of statewide performance (0.3 percent). Of all the jobs added in the Baltimore area during that 12-month period, fully 70 percent fell within the professional and business services category. Not coincidentally, Baltimore’s regional office market continues to recovery, with net absorption totaling nearly 440,000 square feet (sf) during the first quarter of 2014. Most of that absorption occurred in the southern metropolitan area, with Columbia net absorbing a quarter of a million square feet and the overall submarket net absorbing nearly 285,000 sf. The southern metropolitan submarket is now associated with a direct office vacancy rate of 12.4 percent, down from 13.9 percent a quarter earlier. Office vacancy in the southern metropolitan submarket had been rising for much of the previous year. Baltimore City and the northern metropolitan submarkets also registered positive net absorption, with City Center net absorbing a bit more than 19,000 sf. However, asking rent in City Center has actually declined over the past year from $21.53 to $20.75 per square foot (psf). Absorption in the northern metropolitan area was led by Reisterstown Road Corridor, which net absorbed nearly 81,000 sf during the first quarter of 2014. Negative net absorption was recorded in a number of submarkets, however, including in City Center Class B (-51,350 sf), Baltimore Midtown (-2,406 sf), Harford County (-5,475 sf), in Towson (-10,780 sf) and in Baltimore County West (-20,417 sf). Direct vacancy in the northern metropolitan area is close to 16 percent and is closer to 17 percent in City Center. There is every reason to believe that the local office market will continue to heal during the months ahead. Better weather generally translates into more optimism, which in turn translates into greater transactional volume. However, there is little reason to believe that dynamic recovery awaits. The most likely outcome is for the region’s grinding office market recovery to persist.  Vacancy & Absorption By Region 300,000 Vacancy Rates % Net Absorption 30% 25% Quarter Highlights Absorption (sq. ft.) 250,000 16.79% 24.77% 18.29% 16.61% 13.25% 10.25% 13.27% 11.06% 16.06% 13.91% 15.27% 20% 15% 5% 100,000 0% -5% -10% 0 -15% -50,000 Reisterstown Rd Corridor Baltimore County West Harford County BWI I-83 Corridor Baltimore County East Baltimore City Annapolis Columbia Towson Route 2 Corridor City Center 50,000  Owners of 2510 Riva Road announced plans for a complete renovation and expansion of the long vacant Class B building. Unveiling plans for 30,000 sf expansion of the property's current 70,000 sf of space that includes taking the building down to the steel and replacing the exterior with floor to ceiling glass windows. When complete, the property will add more than 100,000 sf of Class A+ space to the market. Continued on next page... -20% Northern Metro City Southern Metro www.mackenziecommercial.com Vacancy Rates  First Annapolis Consulting Inc. has relocated its headquarters, downsizing from 24,000 sf at 900 Elkridge Landing to 21,000 sf at 3 Park Place in Annapolis. The company said it chose the location after a regional search conducted with Anne Arundel County and Annapolis economic development officials. 200,000 14.45% 150,000 10% OFFICE | MACKENZIE MARKET REPORT Overview Quarter Highlights Continued from previous page...  Millennial Media has confirmed that it will be keeping its headquarters at its current location inside the Can Company in addition to more than doubling its space. The media firm signed a 10 year deal for 96,000 sf, up from its initial 40,000 sf, at 2400 Boston Street.  The Social Security Administration unveiled a new twin-building facility at 6100 Wabash Avenue. The state-of-the art complex which will replace Social Security’s Metro West facility has been under construction for more than a year and will add 538,000 sf of space to the market. The 11-acre campus featuring two office buildings, 5 and 7 stories respectively, has been leased to the government entity for a 20year term.  Developer Caves Valley Partners’ new Riverside Wharf development on Key Highway has signed MedStar Health Inc. to a 24,000 sf lease. The health care provider is expected to open an urgent care facility to serve South Baltimore. The 45,000 sf new construction is expected to be dedicated to medical users and will not affect our statistics when it delivers in the second quarter.  Downtown Partnership of Baltimore Inc. has relocated its headquarters from 217 N. Charles Street to 20 S. Charles Street. The nonprofit has expanded its 16,000 sf footprint to 22,000 sf and “reflects Downtown Partnership’s focus on revitalizing the 1960s office project that sparked urban renewal efforts downtown”.  Blue Ocean Realty continues to make headlines turning the largest completed deal in the submarket in 2013 into a full lease up. The firm announced in January that Mariner Finance, LLC, who had previously leased 34,849 sf at 8211 Town Center Drive in White Marsh, would be securing the entire premises. The regional developer purchased the building in the third quarter of 2013 with the tenant in mind.  Information technology services company Skyline Technology Solutions is relocating from 508 McCormick Drive into a 28,000 sf space at 6956 Aviation Boulevard in Aviation Business Park in Glen Burnie. The firm signed an 11-year lease that brings the building’s occupancy rate to 70 percent.  The Chesapeake Innovation Center is relocating to 2288 Blue Water Boulevard in Odenton in the third quarter of 2014. Continued on next page... $27.00 24.77% FIRST QUARTER | 2014 Vacancy & Rental Rates By Region Vacancy Rates % Rental Rates 30% Average Asking Rental Rate $25.00 25% 16.79% 14.45% 16.06% 13.25% 10.25% 16.61% 13.91% 13.27% 11.06% 15.27% $21.00 15% $19.00 10% $17.00 5% $15.00 Harford County Reisterstown Rd Corridor Baltimore City Annapolis Towson BWI I-83 Corridor Columbia Baltimore County East Baltimore County West Route 2 Corridor City Center 0% Northern Metro City Southern Metro Above: The Southern Metro market continues to enjoy some of the highest asking rental rates in the market as positive momentum throughout the submarkets pick up. Healthy vacancy rates (below 10 percent) within the city limits are helping to offset small pockets of inactivty within the Baltimore City and City Center submarkets. Historical Vacancy Rates Total Market Northern Metro Baltimore City + City Center Southern Metro Historical Vacancy Rate 22% 20% 18% 16% 14% 12% 10% Above: The Baltimore MSA continues to recover slowly from losses felt in 2011 and 2012 with the Southern Metro area making strong gains dropping 1.45 percent from the fourth quarter. www.mackenziecommercial.com Vacancy Rates $23.00 18.29% 20% OFFICE | MACKENZIE MARKET REPORT Overview Notable Transactions Continued from previous page...  Known by locals as the Charles Center, the building at 36 S. Charles Street was purchased for $26,100,000 early in the quarter. The building is expected to undergo cosmetic improvements before returning to the market to aggressively attract tenants.  T. Rowe Price Associates has finalized its renewal and extension of its lease, keeping the global investment manager at 100 East Pratt Street in Baltimore through 2027. The firm’s worldwide headquarters is the anchor tenant for the property which is currently 96% leased.  The 355,800 sf Class A office building at 1 E. Pratt Street sold for $58,700,000. The property underwent a $15,000,000 renovation in 2009 and was 71 percent leased at the time of the sale.  Nonprofit healthcare organization MedStar has renewed and expanded its space to 56,647 sf at 5565 Sterrett Place in Columbia. The firm is currently experiencing rapid growth including adding an urgent care facility along Key Highway in Baltimore City.  Network Building & Consulting, LLC, wireless site development services consultant, has leased 20,211 sf at Lyndwood Executive Center in Elkridge. The three-story Class A office building is located at 6095 Marshalee Drive.  Cyber-security company Convergence Technology Consulting has moved from Glen Burnie to Columbia Gateway Business Park, doubling its office space to 8,000 sf. The firm sited the surrounding tech-centric community as a top reason for the move.  Booz Allen Hamilton has renewed its 35,124 sf of office space at 4692 Millennium Drive in the Water’s Edge Corporate Campus. The firm is also occupies 20,486 sf at 4692 Millennium Drive, making it the largest tenant in the building.  Law firm Bodie, Dolina, Hobbs, Friddell & Grenzer, P.C. took occupancy of approximately 17,000 sf of space at 305 Washington Avenue. The regional law firm signed a lease for the space in the Class B office building in the third quarter of 2013.  Towson University renewed their approximately 18,000 sf of space at York at Terracedale. Built in 1982, the 70,470 sf Class B building is fully occupied. FIRST QUARTER | 2014 Lease Location Submarket Tenant *(r) Renewal **(sub) Sublease Amount Leased SF 56,647 sf (r) 54,249 sf (r) 20,211 sf 15,467 sf 5565 Sterrett Place 7178-7180 Columbia Gateway Drive 6095 Marshalee Drive 400 E. Pratt Columbia Columbia Columbia City Center Medstar Health Howard County Bureau of Environmental Health Network Building & Consulting, LLC R2 Integrated Sale Location 405 Alleghany Avenue Submarket Towson Price $350,000 PSF $219.71 Building Size SF 1,593 sf 1 E. Pratt Street City Center $58,700,000 $164.99 355,779 sf 2661 Riva Road Annapolis $2,000,000 $155.04 12,900 sf * All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 3/2014. www.mackenziecommercial.com FIRST QUARTER | 2014 MacKenzie Market Report Office Submarkets www.mackenziecommercial.com OFFICE | MACKENZIE MARKET REPORT Annapolis FIRST QUARTER | 2014 Overview: Annapolis, the State Capital of Maryland and the county seat of Anne Arundel County, is situated on the Severn River. The office submarket is bounded by I-97 to the east, South River to the south, and includes the Route 50/301 corridor on both sides of the Severn River. Quick Stats Number of Buildings Market Size 137 3,988,140 sf CHANGE SINCE LAST aryland’s State Capital and designated a "Central City" by the United States Department of Housing and Urban Development, the Annapolis submarket is driven by a combination of government and tourism. This diverse blend of businesses is evidenced by the area’s landscape which is comprised of an equal mix of historically significant buildings dating to the late 1600s and newer mixed-use lifestyle centers that have emerged over the last decade. In addition to serving as the Anne Arundel County Seat and home to the United States Naval Academy, the area’s tourism and maritime industries have drawn the attention of firms looking for a more relaxed lifestyle for their employees. Steady growth in multiple sectors including healthcare, intelligence, and defense industries continue to drive market activity. Close proximity to major markets, the area is within 30 miles of M both Baltimore and Washington, DC, has also proved beneficial in expanding the submarket’s boundaries as defense contractors relocate their businesses into work/play friendly areas such as Annapolis Towne Centre and Park Place of Annapolis. Growth behind the gates at Fort Meade and Cyber Commend has also helped increase interest in the area’s availability. Annapolis' vacancy rate rose a slight .19 percent to 13.91 percent for a second quarter, still below the fourth quarter of 2012's 15.42 percent. Average rental rates in Annapolis remain among the highest in the Baltimore Metropolitian Statistical Area (MSA) at $25.14 per square foot (psf ), behind Baltimore City's South submarket ($31.33 psf ) and Class A+ space within the City Center submarket (both area's feature some of the region's most elite available space).  Net Absorption/Historical Vacancy Rates CURRENT Direct Vacancy Vacancy W/ Sublet Net Absorption Avg. Asking Rate 13.91% 14.31% 4,009 sf $25.14 QTR     YR     30,000 40,000 Vacancy Rates % Net Absorption 18% 16% 20,000 14% Quarter Highlights  First Annapolis Consulting Inc. has relocated its headquarters, downsizing from 24,000 sf at 900 Elkridge Landing to 21,000 sf at 3 Park Place in Annapolis. The company said it chose the location after a regional search conducted with Anne Arundel County and Annapolis economic development officials.  Owners of 2510 Riva Road announced plans for a complete renovation and expansion of the long vacant Class B building. Unveiling plans for 30,000 sf expansion of the property's current 70,000 sf of space that include taking the building down to the steel and replacing the exterior with floor to ceiling glass windows. When complete, the property will add more than 100,000 sf of Class A+ space to the market. Absorption (sq. ft.) 10,000 12% 0 10% -10,000 8% -20,000 6% -30,000 4% -40,000 2% -50,000 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: The Annapolis market continues to bounce back and forth as tenants grow and give back space, keeping the market relatively stable. One of the few submarkets with new construction completed, Annapolis added two new buildings to its ranks in the fourth quarter of 2013. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT Annapolis Rental Rate/Vacancy Rates $30.00 FIRST QUARTER | 2014 Vacancy Rates % Rental Rates 18% $29.00 16% $28.00 14% Average Asking Rental Rate $27.00 12% Shhhh, don’t say it too loudly. The Class A office market in Annapolis may be tightening. The first quarter of 2014 was a whirlwind of tours for Class A Office. Tenant’s ranging in size from small to 30,000 sf+ took a peak at availabilities in the market and the 2nd quarter is shaping up to produce substantial leasing activity. The common themes to many of the tenants were growth and flight to quality. Flight to quality has been a consistent motivation over the last 24 months, but the need for growth is new and exciting for landlords, developers and pretty much everyone. Class B office and secondary markets landlords (Edgewater, Arnold, Millersville etc) are optimistic a potential tightening of Annapolis Class A office product will result in more activity for their buildings. The market has not flipped to a landlord market yet but there is the risk of tenants losing a deal if they don’t react in a timely manner. 10% $25.00 8% $24.00 6% $23.00 4% $22.00 $21.00 2% $20.00 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: Though well below early 2009's high of $30.00 psf, rental rates in the Annapolis submarket are among the most competitive in the region with the submarkets premier properties regularly achieving rents in the mid-thirties. Businesses in this Submarket (based on number of employees) Other 3.7% Construction 4.2% M anufacturing 3.1% P ublic Administration 15.7% Wholesale T rade 1.4% Retail T rade 14.4% Other S ervices 6.0% T ransportation and Warehousing 1.2% I nformation 2.2% Accommodation and F ood S ervices 10.3% F inance and I nsurance 4.0% Justin T. Mullen SENIOR REAL ESTATE ADVISOR Real E state and Rental and L easing 3.7% MacKenzie Commercial Real Estate Services, LLC P rofessional, S cientific, and T echnical S ervices 9.9% Health Care and S ocial Assistance 11.4% E ducational S ervices 8.7% Above: Apart from a large number of tourism and retail businesses, this submarket, also the State’s Capital, is dominated by government-related industry, providing more than 10,000 individuals with jobs in the public administration field. * All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 3/2014. www.mackenziecommercial.com Vacancy Rates Market Forecast $26.00 OFFICE | MACKENZIE MARKET REPORT Baltimore City* FIRST QUARTER | 2014 Overview: Baltimore City is located 38 miles north of Washington, DC and 95 miles south of Philadelphia. This submarket is divided into four main areas: Midtown, which is bounded by Centre Street to the south, I-83 to the east, Martin Luther King Jr. Boulevard to the west, and North Avenue to the north; Baltimore City North, which encompasses the remaining area north of Route 40; and Baltimore City East and Baltimore City West, which are south of Route 40 and separated by Hanover Street which runs north-south. Quick Stats Number of Buildings Market Size 104 7,649,115 sf CHANGE SINCE LAST CURRENT Direct Vacancy Vacancy W/ Sublet Net Absorption Avg. Asking Rate 13.25% 13.40% 55,846 sf $20.57 psf QTR     YR     anking 20th in population for U.S. Cities, Baltimore City is home to the world-renowned Johns Hopkins Hospital and School of Medicine and sports apparel giant Under Armour. Coupled with major investments by The University of Maryland Medical System in cooperation with the City, all are in the process of redefining Baltimore City’s broader landscape. Further private redevelopments in Baltimore City’s historic Midtown and North submarket buildings have also garnered interest as the City seeks to increase its residential population by attracting a highly educated and mobile workforce that seeks a live/work/play lifestyle. In response, growth in Baltimore’s biotech parks and entrepreneurial incubators are helping Baltimore emerge as a technology hub. Baltimore’s Midtown District is home to the University of Baltimore and the Maryland Institute College of Art. Just north of City Center, Midtown encompasses many of Baltimore’s most vital cultural establishments. Activity in Baltimore’s West and South submarkets is driven by capital investments by the life-sciences industries and Under Armour, which continues to grow it’s headquarter campus along the waterfront. R Activity in Baltimore’s Eastside has benefited from recent retail additions at Canton Crossing and controversy surrounding the neighboring Harbor Point project in Baltimore’s City Center. Activity within Baltimore City continues to remain steady, as tenants trade spaces within the markets and buildings are removed from tracking due to changes in ownership and are converted to multi-family and single tenant status. Overall, the city market saw a slight decrease in vacancy, 0.57 percent, as approximately 55,00 square feet (sf ) of space was absorbed. Average rental rates for the entire submarket remain unchanged at $20.57 per square foot (psf ). Positive absorption in the East, North, and West districts has helped to offset losses in Midtown. Though the West continues to struggle, the area did see 1.30 percent decrease from 29.27 percent in the fourth quarter of 2013 to 27.97 percent in the first quarter of 2014.  *NOTE: The Baltimore City submarket does not include the City’s central business district, which is a distinctly different submarket called City Center. Net Absorption/Historical Vacancy Rates 120,000 100,000 80,000 60,000 Vacancy Rates % Net Absorption 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Quarter Highlights  Millennial Media has confirmed that it will be keeping its headquarters at its current location inside the Can Company in addition to more than doubling its space. The media firm signed a 10 year deal for 96,000 sf, up from its initial 40,000 sf, at 2400 Boston Street.  The Social Security Administration unveiled a new twin-building facility at 6100 Wabash Avenue. The state-of-the art complex which will replace Social Security’s Metro West facility has been under construction for more than a year and will add 538,000 sf of space to the market.  Developer Caves Valley Partners’ new Riverside Wharf development on Key Highway has signed MedStar Health Inc. to a 24,000 sf lease. The health care provider is expected to open an urgent care facility to serve South Baltimore. The 45,000 sf new construction is expected to be dedicated to medical users and will not affect our statistics when it delivers in the second quarter. Absorption (sq. ft.) 40,000 20,000 0 -20,000 -40,000 -60,000 -80,000 2010 2011 2012 Quarters/Years 2013 2014 Above: The market continues to rebound from heavy losses in 2012. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT Baltimore City* Rental Rate/Vacancy Rates $23.00 FIRST QUARTER | 2014 Vacancy Rates % Rental Rates 20% $22.00 18% 16% $21.00 Average Asking Rental Rate 14% $20.00 Market Forecast Activity within the Baltimore City submarket has continued to be the most dynamic submarket within Baltimore region. The East side has seen a great deal of positive momentum as tech firms like Millennial Media and Groove Commerce expand their footprints. The Locust Point area on the Southside continues to grow. The developers of the mixed-use lifestyle project McHenry Row have recently purchased two industrial properties with the plans to re-develop them. The big news in the Midtown market was Maryland’s highest court overturning a lower court ruling, thereby allowing the $1.5 billion State Center Project to move forward. Once underway, State Center will completely change the dynamics of the Midtown market adding additional office, retail and residential to the area. With the exception of the West side, which remains stagnant, Baltimore City vacancy is slowly receding to a healthy level. 12% $19.00 10% $18.00 8% 6% $17.00 4% $16.00 2% $15.00 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: Rental Rates dropped more than $1.00 psf in the North and Midtown markets while rates in the East and West remained steady. Vacancy Rate/Region 35% 30% 25% 20% 15% 10% James R. Grieves, Jr. VICE PRESIDENT 5% 2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 Above: Activity in the North and East continues to tip the scales dropping below 10 percent to join the South which continues to enjoy the lowest vacancy, of any type, in the region. * All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 3/2014. www.mackenziecommercial.com 2014 Q4 MacKenzie Commercial Real Estate Services, LLC 0% Vacancy Rates Midtown North East South West OFFICE | MACKENZIE MARKET REPORT Baltimore County East FIRST QUARTER | 2014 Overview: The Eastern Baltimore County submarket is home to a diverse business community, including some of the region’s largest manufacturers such as GM Power Train, Middle River Aircraft Systems, Lockheed Martin, Signode, and ISG Sparrows Point. An integrated transportation network links Dundalk, Essex, Middle River, and Rosedale to I-95, I-695, Baltimore/ Washington Thurgood Marshall International Airport, and Martin State Airport. MARC commuter rail is available in Middle River. A Quick Stats Number of Buildings Market Size 56 1,972,871 sf CHANGE SINCE LAST nchored by White Marsh, a planned 2,000 acre mixed-use community adjacent to I-95, and close proximity to Aberdeen Proving Ground, the U.S. Army’s oldest military proving ground, has helped the Baltimore County East submarket grow substantially over the last decade as more than $800 million in private, state, and county investment in infrastructure, parks, schools, and housing has encouraged employment-intensive development throughout the submarket. Notable investments in new office, flex, and industrial opportunities by regional developer Corporate Office Properties Trust (COPT) along the I-95 corridor have created clusters of financial, vibrant town center. This cultural hub draws business tenants and residents alike that seek out premier shopping and dining options. Further major investments by Franklin Square Hospital, which currently has more than 60,000 square feet (sf ) of medical space under construction, and emerging developer Blue Ocean Ideas are transforming the once quiet submarket into a desirable location for businesses of all types. Future proposed office parks by both regional developers COPT and St. John Properties are expected to add an approximate 700,000 sf of additional office space to the submarket in the coming years. Over the past year, Baltimore County East continues to show signs of recovery as vacancy rates dropped a notable .95 percent and average asking rental rates increased by $1.14 per square foot (psf ) over course of 2013. Vacancy rates remain well below 2010 highs in the twenties at 14.45 percent. Average asking rental rate remains steady at $21.10 psf.  CURRENT Direct Vacancy Vacancy W/ Sublet Net Absorption Avg. Asking Rate 14.45% 14.55% -4,210 sf $21.10 QTR     YR     80,000 Net Absorption/Historical Vacancy Rates Vacancy Rates % Net Absorption 25% Quarter Highlights  Blue Ocean Realty continues to make headlines turning the largest completed deal in the submarket in 2013 into a full lease up. The firm announced in January that Mariner Finance, LLC, who had previously leased 34,849 sf at 8211 Town Center Drive in White Marsh, would be securing the entire premises. The regional developer purchased the building in the third quarter of 2013 with the tenant in mind. 60,000 20% 40,000 Absorption (sq. ft.) 20,000 10% 0 5% -20,000 -40,000 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: Arguably one of the most reliable submarkets in the region, Baltimore County East remains steady as we move into 2014. www.mackenziecommercial.com Vacancy Rates 15% OFFICE | MACKENZIE MARKET REPORT Baltimore County East Rental Rate/Vacancy Rates $23.00 $22.00 FIRST QUARTER | 2014 Vacancy Rates % Rental Rates 25% 20% Average Asking Rental Rate $21.00 15% Market Forecast Activity within the submarket, with the exception of Mariner Finance at Town Center Drive, appears to be driven by small to mid-sized medical tenants. The Franklin Square Professional Building delivered early in the quarter, adding 60,000 sf of new medical space to the market and generating a positive association with the area. Coupled with St. John Properties’ Crossroads @ 95 office park, which has more than 500,000 sf of proposed office space waiting in the pipeline, and the major infrastructure projects well underway, the submarket is ideally poised for an upswing. $19.00 $18.00 10% $17.00 5% $16.00 $15.00 0% 2006 2007 2008 2009 2010 2011 Quarters/Years Above: Rental Rates inched upward in response to strong absorption in numbers in the fourth quarter, encouraging vacancy rates to respond accordingly. Businesses in this Submarket (based on number of employees) P ublic Administration 4.0% Other S ervices 5.9% Other 4.7% Construction 7.2% M anufacturing 9.0% Accommodation and F ood S ervices 10.2% Wholesale T rade 4.5% Meghan G. Roy SENIOR REAL ESTATE ADVISOR MacKenzie Commercial Real Estate Services, LLC Retail T rade 19.5% Health Care and S ocial Assistance 14.0% E ducational S ervices 8.9% I nformation 1.4% T ransportation and Warehousing 2.3% P rofessional, S cientific, and T echnical S ervices 3.0% F inance and I nsurance 2.4% Real E state and Rental and L easing 3.2% Above: Retail Trade employs nearly 20 percent of individuals working in the Baltimore County East submarket. This is the largest percentage of retail jobs in all of the submarkets except Harford County (21.5 percent) and is attributed to White Marsh Mall and The Avenue, economic generators for the area. * All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 3/2014. www.mackenziecommercial.com Vacancy Rates $20.00 OFFICE | MACKENZIE MARKET REPORT Baltimore County West FIRST QUARTER | 2014 Overview: Baltimore County West is comprised of three unincorporated, census designated communities; Woodlawn, Catonsville, and Arbutus/Halethorpe. The submarket is adjacent to Baltimore City, and bordered by Howard County to the west, and Anne Arundel County to the south. I-70 and I-695 provide easy access to Towson, the Baltimore/Washington Thurgood Marshall International Airport, and Frederick and Montgomery Counties. ome to the headquarters of the Social Security Administration (SSA) as well as The Centers for Medicare and Medicaid Services, two of the largest employers in the State of Maryland, the Woodlawn submarket is driven heavily by government related activity. The area is often informally referred to as Security, Maryland, due to the importance of the SSA's headquarters as well as nearby Security Boulevard (Maryland Route 122) and Security Square Mall. Woodlawn has been designated an Enterprise Zone by the State of Maryland Business and Economic Development. The submarket is home to bwtech@ UMBC Research and Technology Park, arguably Baltimore County’s most prestigious research park, is a 71-acre community engaged in research, H entrepreneurship and economic development. Home to the award-winning Incubator and Accelerator programs, the five-building Research Park offers more established research and technology companies Class A office space in a suburban environment. Vacancy rates in the Baltimore County West submarket trended upward for a third consecutive quarter in response to multiple tenants vacating the submarket creating a nearly 3 percent increase from the same period one year ago. Average rental rates dropped $0.30 psf in response, but remain up $1.54 psf from the same period in 2013.  Quick Stats Number of Buildings Market Size 68 3,195,427 sf CHANGE SINCE LAST CURRENT Direct Vacancy Vacancy W/ Sublet Net Absorption Avg. Asking Rate 16.79% 16.89% -20,417 $20.05 QTR     YR     80,000 18% 60,000 Net Absorption/Historical Vacancy Rates Vacancy Rates % Net Absorption Quarter Highlights  Executive Park West has signed a handful of tenants. The twelve building office park welcomed an approximately 6,200 sf tenant to 3108 Lord Baltimore Drive in first quarter and 3110 Lord Baltimore Drive is expected to welcome an unnamed tenant into approximately 11,000 sf space in the second quarter of 2014.  St. John Properties Windsor Office Park signed an unconfirmed 6,000 sf to 7275 Windsor Boulevard. Research is still pending on the deal’s status as an expansion or new deal. 16% 40,000 14% 20,000 12% Absorption (sq. ft.) 0 10% -20,000 8% -40,000 6% -60,000 4% -80,000 -100,000 2% -120,000 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: A noticeable drop (-20,417 sf ) in absorption due in part to vacancies created by a sizeable GSA tenant vacating space along Security Boulevard edged vacancy rates to their highest levels in recent years. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT Baltimore County West Rental Rate/Vacancy Rates $22.00 FIRST QUARTER | 2014 Vacancy Rates % Rental Rates 18% $21.00 16% 14% Average Asking Rental Rate $20.00 12% $19.00 10% Market Forecast The Social Security Administration’s project at 6100 Wabash Avenue within City limits delivered in the first part of the quarter. The delivery of the new 500,000+ sf facility is not expected to impact its existing presence along Security Boulevard where the government entity currently has space in excess of two msf, but is worth noting because of its close proximity to the submarket. Additionally, office tenants (including medical) are looking at alternative spaces, such as long vacant retail, for adaptable space that provides easy access to amenities provides more visibility and is attractive to employees and clients alike. $18.00 8% 6% $17.00 4% $16.00 2% $15.00 0% 2009 2010 2011 Quarters/Years 2012 2013 Above: Average rental rates experienced a slight $0.30 psf drop over the quarter but remain $1.54 psf higher than the same period one year ago to stand at $24.68 psf. Businesses in this Submarket (based on number of employees) Construction 4.6% Other 5.9% P ublic Administration 7.9% Wholesale T rade 2.5% Other S ervices 5.8% M anufacturing 5.2% Accommodation and F ood S ervices 5.0% Retail T rade 13.1% T ransportation and Warehousing 2.1% Karen S. Deeley SENIOR VICE PRESIDENT I nformation 1.2% F inance and I nsurance 2.1% MacKenzie Commercial Real Estate Services, LLC Health Care and S ocial Assistance 27.4% E ducational S ervices 9.6% Real E state and Rental and L easing 2.3% P rofessional, S cientific, and T echnical S ervices 5.5% Above: 18,728 individuals are employed by the Health Care and Social Assistance Industries in this submarket, representing nearly 30 percent of Baltimore County West’s employment. The Social Security Administration and the Centers for Medicare and Medicaid Services, two of Maryland’s largest employers both located in Woodlawn, are responsible for this seemingly disproportionate distribution. * All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 3/2014. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT BWI FIRST QUARTER | 2014 Overview: Located in northern Anne Arundel County, just south of Baltimore, the BWI Office submarket surrounds Baltimore/Washington International Thurgood Marshall Airport and includes Glen Burnie, Linthicum, Hanover, and several smaller business districts. The area, which is home to the National Security Agency and Fort George Meade, is supported by a diverse set of economic drivers including world class private sector employers, telecommunications, health care, retail and distribution operations, and a rapidly expanding information and defense industry including eight of the top 10 defense contractors in the nation. O ver the past 30 years, the BWI submarket has transformed as technology and intelligence communities take advantage of the submarket’s close proximity to Fort Meade and major metropolitan markets in Baltimore and Washington, D.C., growing total office inventory to nearly 9 million sf (msf ) of office space. Growth within the submarket has been concentrated along the Baltimore/Washington Corridor as office parks, such as National Business Park, are added to and expanded in the submarket. In addition to a strong health care presence in this area, the National Security Agency (NSA) and its contractors have been a significant factor in the submarket's growth as key private sector employers such as Booz Allen Hamilton, Computer Sciences Corporation, General Dynamics, Northrop Grumman, Lockheed Martin, ITT, BAE Systems, Raytheon, and Harris Corporation grow their operations. Vacancy peaked in the BWI submarket during the first quarter of 2010 at 22.90 percent. Since that time, significant absorption has occurred dropping 9 percent since the beginning of 2010 to its current level of 13.27 percent. The average asking rental rate remains among the highest in the Baltimore Metropolitian Statistical Area (MSA) at $24.68 per square foot (psf ).  Quick Stats Number of Buildings Market Size 109 8,755,341 sf CHANGE SINCE LAST CURRENT Direct Vacancy Vacancy W/ Sublet Net Absorption Avg. Asking Rate 13.27% 13.70% 24,192 sf $24.68 psf QTR     YR     350,000 Net Absorption/Historical Vacancy Rates Vacancy Rates % Net Absorption 25% 300,000 Quarter Highlights  Information technology services company Skyline Technology Solutions is relocating from 508 McCormick Drive into a 28,000 sf space at 6956 Aviation Boulevard in Aviation Business Park in Glen Burnie. The firm signed an 11-year lease that brings the building’s occupancy rate to 70 percent.  The Chesapeake Innovation Center is relocating to 2288 Blue Water Boulevard in Odenton in the third quarter of 2014. The regional incubator has been in Annapolis for the last ten years and will look to increase its partnership capabilities utilizing its close proximity to Washington D.C., Baltimore, Annapolis, and Fort Meade as a marketing tool. Absorption (sq. ft.) 250,000 20% 200,000 150,000 15% 100,000 50,000 10% 0 -50,000 5% -100,000 -150,000 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: After soaring to an all-time high of 22 percent in early 2010, the BWI submarket has enjoyed healthy activity since 2012 staying consistently below 15 percent vacancy. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT BWI Rental Rate/Vacancy Rates $27.00 FIRST QUARTER | 2014 Vacancy Rates % Rental Rates 25% $25.00 20% Average Asking Rental Rate $23.00 15% Market Forecast The continued strength of the market in National Business Park and general concentration on security and technology in the market is helping the general downward trend in vacancy continue. With several large blocks of space available in the BWI market, primarily in the area of Airport Square, it should attract users as, generally, there are few large blocks of space available in other markets that make up the Baltimore/Washington Corridor. The most anticipated news will be COPT breaking ground on a second building at Arundel Preserve. KEYW Corp has grown significantly over the past year, further cementing the heavy security and tech presence within the market, and with no new construction currently underway news of the firm driving the construction of a second building will likely draw even more interest towards the project. $21.00 10% $19.00 5% $17.00 $15.00 0% 2009 2010 2011 Quarters/Years 2012 2013 Above: The average asking rental rate is among the highest within the Baltimore MSA, hovering just under $25.00 psf level. Businesses in this Submarket (based on number of employees) Construction 7.0% Other 7.8% P ublic Administration 3.6% Other S ervices 4.0% M anufacturing 24.5% Accommodation and F ood S ervices 7.5% Health Care and S ocial Assistance 2.5% E ducational S ervices 3.2% Christopher C. Bennett EXECUTIVE VICE PRESIDENT/PRINCIPAL P rofessional, S cientific, and T echnical S ervices 7.3% Wholesale T rade 8.4% MacKenzie Commercial Real Estate Services, LLC Real E state and Rental and L easing 3.0% I nformation 1.7% F inance and I nsurance 2.7% Retail T rade 9.3% T ransportation and Warehousing 7.3% Above: The BWI submarket employs the highest percentage of manufacturing employees of all of the office submarkets (24.5 percent). Interestingly, while the Health Care and Social Assistance Industries make up one of the top three largest sectors by employee in every other submarket, BWI employs a mere 2.5 percent (1,599) in this field. * All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 3/2014. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT City Center FIRST QUARTER | 2014 Overview: As the downtown district of Baltimore City, the City Center submarket is defined by Broadway Street to the east, Martin Luther King Jr. Boulevard to the west, Centre Street to the north, and Cross Street to the south. City Center is Baltimore’s dense central business district and easily accessible to both I-95 and 295. Quick Stats Number of Buildings Market Size 78 14,462,889 sf CHANGE SINCE LAST altimore’s City Center continues to expand eastward along the water’s edge to include Harbor East and the hotly debated Harbor Point. Total office inventory is nearly 14.5 million square feet (msf ). Drawn to City Center for its water views and amenities including Oriole Park at Camden Yards, M&T Bank Stadium, as well as easy access to a variety of ethnic restaurants, shops, and residences, Baltimore’s City Center is a diverse mix of old and new. In 2011, The Downtown Partnership unveiled an ambitious proposal to transform the Central Business District’s landscape to include $100 million in new parks and public plazas adding up to revitalization of Baltimore’s urban core. Major projects for the Inner Harbor, Charles Center, and west side are expected to generate new opportunities and encourage private growth. Major employers in the submarket include: T. Rowe Price, Legg Mason, Constellation Energy, CitiFinancial, Verizon, Bank of America, M&T Bank, PNC, and Transamerica. B Activity surrounding the Harbor Point project that neighbors the successful Harbor East, continues to gain traction. At this time, a projected 300,000 sf of Class A+ office space will be added to the market when the project delivers. No definite time-frame has been given for the project as it moves through the approval process. Overall vacancy, including sublet vacancy, within the City Center dropped 1.47 percent from 19.09 percent in the 4th quarter of 2013 to 17.62 percent. The dip is attributed to positive activity in the Class A+ and B+ markets which absorbed 33,177 sf and 36,225 sf respectively. This strong showing of activity helped draw Class A+ vacancy down 1.30 perct to 10.76 percent. Average rental rates remain steady in the low twenties with Class A+ and A product hovering in the mid-twenties.  CURRENT Direct Vacancy Vacancy W/ Sublet Net Absorption Avg. Asking Rate 16.61% 17.62% 19.085 sf $20.79 QTR     YR     150,000 25% Net Absorption/Historical Vacancy Rates Vacancy Rates % Net Absorption 100,000 Quarter Highlights Absorption (sq. ft.) 20%  Known by locals as the Charles Center, the building at 36 S. Charles Street was purchased for $26,100,000 early in the quarter. The building is expected to undergo cosmetic improvements before returning to the market to aggressively attract tenants.  T. Rowe Price Associates has finalized its renewal and extension of its lease keeping the global investment manager at 100 East Pratt Street in Baltimore through 2027. The firm’s worldwide headquarters is the anchor tenant for the property which is currently 96% leased.  The 355,800 sf Class A office building at 1 E. Pratt Street sold for $58,700,000. The property underwent a $15,000,000 renovation in 2009 and was 71 percent leased at the time of the sale. 50,000 15% 0 10% -50,000 5% -100,000 -150,000 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: The market continues to recover from major losses throughout 2010, 2011, and 2012 with top tier space slowly becoming a premium. Class B space continues to struggle, currently standing at 29.56 percent, but strong steady absorption by Class A+ and A product coupled with several outdated office buildings being repurposed and removed from the market will help tighten the market moving forward. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT City Center Rental Rate/Vacancy Rates $23.00 FIRST QUARTER | 2014 Vacancy Rates % Rental Rates 25% $22.50 20% Average Asking Rental Rate $22.00 Market Forecast Activity in and around the City Center is starting to pick up. Although there remains a flight to quality, options for larger users are beginning to tighten helping make well located and iconic Class A and B+ buildings more attractive. Spring and Summer bring out the best of a city center location; walkability to amenities and venues among the top attractors. Coupled with a growing desire by technology firms to be where the talent is, activity in submarket is expected to continue at a steady healthy growth rate. $21.50 10% $21.00 5% $20.50 $20.00 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: Rental Rates remain virtually unchanged even as Class A rates drop more than $1.00 psf over the quarter. Vacancy Rate/Building Class 35% 30% 25% Vacancy Rates A+ A B+ B 15% Mark M. Deering SENIOR VICE PRESIDENT/PRINCIPAL 20% MacKenzie Commercial Real Estate Services, LLC 15% 10% 5% 0% 2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 Above: Vacancy rates of Class A+ and Class A office space continue to slope downwards balancing a slight rise by Class B office space. Class B+ space remains arguably unchanged over the past year. * All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 3/2014. www.mackenziecommercial.com OFFICE | MACKENZIE MARKET REPORT Columbia FIRST QUARTER | 2014 Overview: Located between Baltimore and Washington, DC in Howard County, Columbia offers convenient access to Annapolis, the Chesapeake Bay, and three international and regional airports. Commuter and bus services and the MARC commuter rail system are available to residents and businesses. Quick Stats Number of Buildings Market Size 227 13,227,907 sf CHANGE SINCE LAST outinely recognized by national news organizations for its highly educated labor pool, the Columbia submarket boasts one of the largest concentrations of corporate, political, and financial centers outside of Washington, DC. Its long history of diversity and abundance of premier retail and recreational amenities has helped the Columbia market remain the largest within the Baltimore Metropolitan Statistical Area (MSA). Major employers in this submarket include Johns Hopkins University Applied Physics Laboratory, Verizon Wireless, SAIC, Wells Fargo, Arbitron, Dreyers Grand Ice Cream, Magellan Health Services, Northrop Grumman, and Raytheon. One of the most recognizable communities in the submarket, Maple Lawn, a 2 million square foot (msf ) mixed-use development in Howard County, is one of the most sought after locations in Maryland. Strategically located three miles from I-95, between Baltimore and Washington, R DC, the dynamic community offers a unique blend of professional services, a wide variety of housing options, high-end retail, and dining amenities. Built on the principals of Traditional Neighborhood Development, Maple Lawn’s award-winning architecture and impeccable design unite urban convenience and small-town charm for businesses, residents, and visitors. After suffering a drop in activity during the tail end of 2013, the submarket lost nearly 60,000 sf of tenancy, Columbia rebounded with a 246,606 sf absorption. The gain, a nearly 2.5 percent decline for the fourth quarter's 13.31 percent, now stands at a respectiably 11.06 percent - among the strongest in the Baltimore MSA . Rental rates responded accordingly, inching up $0.30 psf over the quarter to $24.78 psf.  CURRENT Direct Vacancy Vacancy W/ Sublet Net Absorption Avg. Asking Rate 11.06% 11.99% 246,606 sf $24.78 QTR     YR     Net Absorption/Historical Vacancy Rates 300,000 Vacancy Rates % Net Absorption 18% 250,000 16% 200,000 14% Quarter Highlights  Nonprofit healthcare organization MedStar has renewed and expanded its space to 56,647 sf at 5565 Sterrett Place in Columbia. The firm is currently experiencing rapid growth including adding an urgent care facility along Key Highway in Baltimore City.  Network Building & Consulting, LLC, wireless site development services consultant, has leased 20,211 sf at Lyndwood Executive Center in the Elkridge. The three-story Class A office building is located at 6095 Marshalee Drive.  Cyber-security company Convergence Technology Consulting has moved from Glen Burnie to Columbia Gateway Business Park doubling its office space to 8,000 sf. The firm sited the surrounding tech-centric community as a top reason for the move. Absorption (sq. ft.) 150,000 12% 100,000 10% 50,000 8% 0 6% -50,000 4% -100,000 2% -150,000 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: Strong direct and sublet absorption on Samuel Morse Drive and Sterling Drive drove vacancy down nearly 2.5 percent over the quarter. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT Columbia Rental Rate/Vacancy Rates $26.00 FIRST QUARTER | 2014 Vacancy Rates % Rental Rates 18% 16% $25.00 14% Average Asking Rental Rate The Columbia submarket is tightening—with only 3 Class A and 4 Class B office options over 50,000 SF. This, possibly combined with a creeping economic recovery, is influencing market rates as they inch up. With vacancy trending down close to single digits, we are seeing fewer options to choose from for all sized tenants. While technology companies and government contractors are proceeding cautiously, if at all, we are seeing increased activity from financial services, insurance providers, health-tech and other professional services companies. Flex product continues to be a sought after alternative to higher priced multi-story office. 10% $23.00 8% $22.00 6% 4% $21.00 2% $20.00 0% 2010 2011 2012 2013 2014 Quarters/Years Above: Rental rates continue to respond to positive absorption activity, increasing as large contiguous spaces are removed from the market. Businesses in this Submarket (based on number of employees) Construction 6.8% P ublic Administration 2.7% Other S ervices 5.0% Other 4.7% M anufacturing 9.1% Accommodation and F ood S ervices 7.3% Wholesale T rade 8.1% Bethany S. Hobbs REAL ESTATE ADVISOR Health Care and S ocial Assistance 10.5% Retail T rade 14.0% MacKenzie Commercial Real Estate Services, LLC E ducational S ervices 7.3% T ransportation and Warehousing 2.7% P rofessional, S cientific, and T echnical S ervices 10.3% Real E state and Rental and L easing 4.1% I nformation 3.3% F inance and I nsurance 4.2% Above: In addition to the typical mix of Health Care and Social Assistance Services (10.5 percent) and Retail Trade (14 percent) industries, this submarket has a high percentage of Professional, Scientific, and Technical Service employees (10.3 percent) and the second highest concentration of employees in the Information field of all of the submarkets. * All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 3/2014. www.mackenziecommercial.com Vacancy Rates Market Forecast $24.00 12% OFFICE | MACKENZIE MARKET REPORT Harford County FIRST QUARTER | 2014 Overview: Harford County is located along the I-95 Corridor just 23 miles north of Baltimore. Harford’s major business districts fall within the County’s Development Envelope and include Bel Air, the county seat, Aberdeen, Havre de Grace, Riverside, Joppa, and Edgewood. I-95, U.S. Route 1, U.S. Route 40, and Maryland 24, traverse the County providing easy access to its more than 20 business parks including Box Hill Corporate Center, Water’s Edge Corporate Campus, The GATE at Aberdeen Proving Ground, North Gate Business Park, and the HEAT Center. T Quick Stats Number of Buildings Market Size 105 3,719,818 sf CHANGE SINCE LAST he U.S. Army’s Aberdeen Proving Ground (APG) is an economic generator for the region and the County’s largest employer with more than 13,000 employees. As a result of the recent military Base Realignment and Closure (BRAC) process, APG is the fastest growing area in Harford County. Major employers include; AASKI Technology, Battelle, CACI, Computer Sciences Corporation, Environics USA, General Dynamics, Northrop Grumman, R4 Technologies, Raytheon, SAIC, and Smiths Detection. Major developers St. John Properties and Corporate Office Properties Trust continue to drive development in the submarket, focusing on bringing large Class A campuses that support technology driven amenities to market. This boom in construction is now hitting the market, causing the vacancy rates to rise as available vacant square footage enters unfilled. While the Federal Government’s relocations in relation to BRAC were officially completed as of September 15, 2011, the area is expected to continue to draw activity from contractors relocating their base of operations to the Aberdeen Proving Ground area. The market continues to struggle to fill the 250,000 square feet (sf ) of Class A office space added during the 3rd and 4th quarters of 2010 in addition to nearly 225,000 sf of space that delivered in the end of 2012 and during the first quarter of 2013. Direct vacancy for the submarket stands at 24.77 percent with sublet vacancy slighlty higher at 25.76 percent. Rental rates dropped nearly $1.40 per square foot (psf ) over the quarter in an effort to stimulate activity.  CURRENT Direct Vacancy Vacancy W/ Sublet Net Absorption Avg. Asking Rate 24.77% 25.76% -25,475 sf $22.95 psf QTR     YR     250,000 Net Absorption/Historical Vacancy Rates Vacancy Rates % Net Absorption 30% 200,000 25% Quarter Highlights  Booz Allen Hamilton has renewed its 35,124 sf of office space at 4692 Millennium Drive in the Water’s Edge Corporate Campus. The firm is also occupies 20,486 sf at 4692 Millennium Drive, making it the largest tenant in the building  Corporate Office Properties Trust has signed two unnamed tenants to approximate 13,000 sf and 6,000 sf respectively. The tenants will take occupancy within the 84,000 sf, Class A office building in the second quarter of 2014. Absorption (sq. ft.) 150,000 100,000 20% 50,000 15% 0 -50,000 10% -100,000 5% -150,000 -200,000 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: Long standing vacant space continues to plague the market with little activity outside the gates of Aberdeen Proving Grounds to offset major losses felt in 2012. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT Harford County Rental Rate/Vacancy Rates $29.00 FIRST QUARTER | 2014 Vacancy Rates % Rental Rates 30% $27.00 25% Average Asking Rental Rate $25.00 20% $23.00 15% $21.00 10% $19.00 Market Forecast The Harford County market continues to struggle outside the gates of Aberdeen Proving Grounds with several notable buildings waiting for tenants. Activity within the gates remains positive, attracting tech firms with the credentials to meet APG’s needs. While this appears to be a negative for the area, close proximity to a tightening Baltimore County East market and diminishing access to large contiguous spaces throughout the market will help breathe life into move-in ready space outside the gate. $17.00 5% $15.00 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: Asking rental rates continue to be among the highest in the region with more than 500,000 sf of premier space on the market. Businesses in this Submarket (based on number of employees) Construction 8.0% Other 6.4% P ublic Administration 5.1% M anufacturing 5.6% Wholesale T rade 4.9% Other S ervices 6.8% F. Joseph Bradley, III VICE PRESIDENT Accommodation and F ood S ervices 9.2% Retail T rade 21.5% MacKenzie Commercial Real Estate Services, LLC Health Care and S ocial Assistance 9.9% T ransportation and Warehousing 1.7% I nformation 0.9% Real E state and Rental and L easing 2.5% P rofessional, S cientific, and T echnical S ervices 7.3% F inance and I nsurance 2.8% E ducational S ervices 7.5% Above: Retail Trade employs 21.5 percent of Harford County’s workforce; more than twice as many individuals as the second largest field, health care and social assistance. It is likely Harford County’s pie chart will change dramatically in the next three (3) years as electronics, defense, and IT contractors relocate to this submarket due to BRAC. * All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 3/2014. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT I-83 Corridor FIRST QUARTER | 2014 Overview: The I-83 Corridor, which includes the business districts of Timonium, Hunt Valley, Loveton, and Sparks, encompasses the majority of Northern Baltimore County and stretches from Pennsylvania to Towson. Excellent infrastructure connects the Corridor to Baltimore City by way of Interstate 83 and Maryland Route 45, more commonly known as York Road. In addition, the light-rail system offers easy access to Baltimore City, Washington, DC, and the Baltimore/ Washington Thurgood Marshall International Airport. A Quick Stats Number of Buildings Market Size 131 7,703,665 sf CHANGE SINCE LAST rguably one of the most diverse submarkets, the I-83 Corridor is a blend of office, flex, and retail properties, dotted open land, and industrial landmarks. Attracted by numerous amenities including ease of access via Interstate 83, close proximity to Towson, and life-style epicenter Hunt Valley Towne Center, businesses in the Corridor are a blend of technology, professional services, and corporate and regional headquarter locations. These assorted users include AAI Corporation, Bill Me Later, KCI Technologies, MBNA, PDP, and Travelers, Fortune 500’s McCormick & Company, TESSCO Technologies, PHH Corporation, and TransHealthCare. Surrounding this assorted mix of high rise Class A buildings and corporate office parks along York Road, upscale retailers such as Wegmans, Bluestone, and Oregon Grille, share market capital with local mom and pop institutions such Valley View Farms, Watson’s, and Hightop’s, offering employees a blend of work, live, and play opportunities. Activity within the submarket continues to balance itself out as positive and negative absorptions throughout 2013 reverse any gains or losses incurred during the previous quarter. The submarket absorbed approximately 57,381 square feet (sf ) in the first quarter, bringing both direct and sublet vacancy rates to 10.25 percent and 10.73 percent respectively. Healthy activity throughout the submarket has increased rental rates slightly more than $1.00 per square foot (psf ) over the quarter to $21.75 psf.  CURRENT Direct Vacancy Vacancy W/ Sublet Net Absorption Avg. Asking Rate 10.25% 10.73% 57,381 sf $21.75 QTR     YR     Net Absorption/Historical Vacancy Rates 200,000 Vacancy Rates % Net Absorption 14% 150,000 12% 100,000 10% Absorption (sq. ft.) 50,000 8%  IRF Solutions and Syntel, Inc. took occupancy of their space at 14600 York Road. The technology firms took 15,000 sf and 33,385 sf, respectively, at the single story Class B office building in Hunt Valley bringing the building to full occupancy.  10713 Gilroy Road will welcome an unnamed tenant to 14,658 sf of space in the second quarter. 0 6% -50,000 4% -100,000 2% -150,000 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: Strong absorption has driven vacancy rates down for a second consecutive quarter, making the area the strongest of the Northern Markets and among the healthiest in the Baltimore region. www.mackenziecommercial.com Vacancy Rates Quarter Highlights OFFICE | MACKENZIE MARKET REPORT I-83 Corridor Rental Rate/Vacancy Rates $24.00 $23.00 FIRST QUARTER | 2014 Vacancy Rates % Rental Rates 14% 12% $22.00 Average Asking Rental Rate 10% $21.00 8% Market Forecast The 83 Corridor is still seeing significant activity for midrange and large users. Large floorplates are becoming scarce as a result of the flurry of activity over the last 3-4 years. There has been a significant amount of portfolio investment, in the Hunt Valley market particularly, which has brought new vigor to leasing initiatives in a lot of the Class A product. I would expect leasing to remain aggressive as a result of the need to lease the remaining vacancy, however, I do anticipate the pendulum swinging back towards the Landlord in the near future. Tenants would be wise to take advantage of the market now with the changes being unknown. $20.00 $19.00 6% $18.00 4% $17.00 2% $16.00 $15.00 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: After a noticeable dip in the third quarter of 2013, rental rates have climbed back to the low-twenties. Businesses in this Submarket (based on number of employees) Construction 7.2% P ublic Administration 1.3% Other S ervices 4.1% Other 5.0% M anufacturing 11.1% Accommodation and F ood S ervices 7.1% Wholesale T rade 5.7% Health Care and S ocial Assistance 12.6% Retail T rade 14.9% Matthew B. Mueller VICE PRESIDENT E ducational S ervices 3.8% T ransportation and Warehousing 0.6% P rofessional, S cientific, and T echnical S ervices 10.0% Real E state and Rental and L easing 5.1% I nformation 1.9% MacKenzie Commercial Real Estate Services, LLC F inance and I nsurance 9.6% Above: This submarket is home to nearly 5,000 businesses. While employment in the I-83 Corridor submarket is well distributed, there is a clear concentration of jobs in the health care and social assistance, professional, scientific, and technical services fields. In addition, this Corridor is home to a thriving manufacturing industry. * All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 3/2014. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT Reisterstown Road Corridor FIRST QUARTER | 2014 Overview: The Reisterstown Road Corridor submarket is bounded by Greenspring Avenue to the east, Liberty Road to the west, the junction of Butler Road, Hanover Pike and Reisterstown Road to the north, and the Baltimore City line to the south. It includes Pikesville, Owings Mills Town Center, McDonogh/Garrison, Historic Reisterstown, and the Red Run Boulevard corridor. T Quick Stats Number of Buildings Market Size 84 4,650,535 sf CHANGE SINCE LAST he Reisterstown Road Corridor is an assorted stretch of retail, flex, and office properties connecting Baltimore City to the rolling hills of Northern Baltimore County via Interstate 795 and Reisterstown Road. The submarket is currently seeing revitalization as more than $1 billion in improvements pour into the area. Most notably, Metro Centre at Owings Mills, a 47 acre, pedestrian-friendly development surrounding the Metro subway station, is under construction having Phase I of its master plan nearing completion. Designated by the State of Maryland as a transit-oriented development project, the project includes offices, shops, restaurants, a new public library, and a satellite campus for the Community College of Baltimore County. Two major reconstruction projects are also underway as projects at Owings Mills Mall and the location of the former Solo Cup facility, to be renamed Foundry Row, move through their planning stages. Both projects will have a heavy retail focus with some office components. Overall the area continues to be the hub of significant financial and insurance related businesses which include ADP, Euler Hermes, CareFirst, Baltimore Life, and Zurich. Other major employers include Baltimore Spice Company, Axalto, and Quest International. A growing bioscience cluster includes Smith Kline Beacham and BioFX. The Reisterstown Road Corridor continued its upward trend from the fourth quarter of 2013 by absorbing 80,754 sf, driving vacancy down 1.74 percent to 18.29 percent. Another positive indicator for the submarket; asking rents inched a slight $0.10 per square foot (psf ), and are currently averaging $21.59 psf.  CURRENT Direct Vacancy Vacancy W/ Sublet Net Absorption Avg. Asking Rate 18.29% 18.93% 80,754 sf $21.59 psf QTR     YR     Net Absorption/Historical Vacancy Rates 15,000 Vacancy Rates % Net Absorption 20% 10,000 15% Quarter Highlights  Health insurance company CareFirst of Maryland Inc. is expanding, adding two additional floors and effectively doubling the size of its space to 52,000 sf at BECO Towers I. The firm renewed its existing 26,040 sf lease at 10451 Mill Run Circle last July but announced a new lease on an additional 26,040 sf early in the quarter. The building also renewed national operator of executive office suites and virtual offices BusinesSuites, LP, to 13,200 sf of space. This is the firm’s seventh location in the Maryland region. The 11 story, Class A office property recently finalized a more than $15,000,000 renovation. Absorption (sq. ft.) 5,000 10% 0 5% -5,000 0% -10,000 -5% -15,000 -10% 2010 2011 2012 Quarters/Years 2013 2014 Above: Vacancy rates responded accordingly as the submarket absorbed more than 80,000 sf in the first quarter. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT Reisterstown Road Corridor Rental Rate/Vacancy Rates $25.00 $24.00 FIRST QUARTER | 2014 Vacancy Rates % Rental Rates 20% 18% $23.00 16% Average Asking Rental Rate $22.00 14% $21.00 12% Market Forecast The Reisterstown Rd. Corridor continued to build momentum from a stronger close to 2013. The sub-market saw vacancy fall below 19 percent, a huge improvement from where it stood for the vast majority of 2013. Over 80,000 sf was positively absorbed, with much of the larger action taking place at the BECO Towers in Owings Mills, along with Schneider Electric USA leasing over 22,000 sf in the Dolfield Business Park. For the second straight quarter, Reisterstown Rd. had the highest positive net absorption in Baltimore County, and I think Landlords and Real Estate Professionals have noticed increased activity in the market. Vacancy decreased while the average asking rent rose 10 cents, another good sign for Landlords. Hopefully this recent trend continues and the market continues to see larger amounts of vacancy disappear. $20.00 10% $19.00 8% $18.00 6% $17.00 4% $16.00 2% $15.00 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: Though well below the asking rents experienced in the first half of 2009, the submarket continues to recover. Businesses in this Submarket (based on number of employees) Construction 4.0% Other 7.3% P ublic Administration 2.1% Wholesale T rade 2.4% Other S ervices 5.4% M anufacturing 7.4% Retail T rade 15.6% Accommodation and F ood S ervices 8.0% T ransportation and Warehousing 0.6% Health Care and S ocial Assistance 12.8% I nformation 1.8% T. Henson Ford REAL ESTATE ADVISOR F inance and I nsurance 12.2% MacKenzie Commercial Real Estate Services, LLC E ducational S ervices 8.7% Real E state and Rental and L easing 4.1% P rofessional, S cientific, and T echnical S ervices 7.9% Above: Nearly half of all businesses in this submarket are characterized as Services, with Health Care and Social Assistance Services providing a dominating 12.8 percent of the total. The Reisterstown Road Corridor is also home to one of the largest concentrations of Finance and Insurance jobs, coming in third behind Baltimore City, and City Center, with 7,493 employees representing 12.2 percent of this submarket’s total employment. * All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 3/2014. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT Route 2 Corridor FIRST QUARTER | 2014 Overview: Located in northeast Anne Arundel County, the Route 2 Corridor stretches from Severna Park to Pasadena, and includes the business districts of Glen Burnie and Arnold. Route 2 (or Ritchie Highway) connects Annapolis and the Baltimore Beltway offering access to other points in Anne Arundel County. In addition, Route 50, which extends from the southern part of the market (Severna Park), makes travel to Washington, DC an easy drive. T the smallest of the Baltimore submarkets, the Route 2 Corridor submarket of Anne Arundel County provides an assortment of office and retail facilities which cater to their local clientele. From the urbanized northern reaches of Glen Burnie, which is home to the monstrous MVA facility and other structures typical of an urban area, to the small strip centers that serve wealthy suburbanites in "South County", the Route 2 Corridor is a microcosm of our region. The larger buildings in the north that were once populated by the "nationals" have all seen a retrenchment, while the smaller "mom and pop" tenants along Route 2, are slugging it out as they compete for allegiance from their loyal neighbors. This submarket lacks any major office or industrial parks, therefore the majority of brokered deals are small in nature. Because of this, any mid-to- large size deal or combination of several small deals will have a heavy impact on this quiet market. Asking rental rates have stabilized, with the average asking rate increasing by only $0.55 per square foot (psf ) to $22.14 psf from the fourth quarter.  Quick Stats Number of Buildings Market Size 41 1,428,030 sf CHANGE SINCE LAST CURRENT Direct Vacancy Vacancy W/ Sublet Net Absorption Avg. Asking Rate 15.27% 16.72% 10,109 sf $22.14 psf QTR     YR     10,000 15% Net Absorption/Historical Vacancy Rates 15,000 Vacancy Rates % Net Absorption 20% Quarter Highlights Absorption (sq. ft.) Vacancy Rates  An unknown tenant has leased 22,662 sf of space at 6711 Baymeadow Drive in Baymeadow Business Park in Glen Burnie bringing the Class B office building to 85 percent occupancy. 5,000 10% 0 5% -5,000 0% -10,000 -5% -15,000 -10% 2010 2011 2012 Quarters/Years 2013 2014 Above: Activity at Baymeadow Drive drew vacancy down nearly a full percentage point from 15.98 percent to 15.27 percent. www.mackenziecommercial.com OFFICE | MACKENZIE MARKET REPORT Route 2 Corridor Rental Rate/Vacancy Rates $25.00 $24.00 FIRST QUARTER | 2014 Vacancy Rates % Rental Rates 20% 18% $23.00 16% Average Asking Rental Rate $22.00 14% $21.00 12% Market Forecast The Route 2 Corridor appears to be picking up a little as tenants are exploring the market, taking advantage of long vacant space or expanding their current locations. Both the retail and industrial markets are also showing signs of life which could indicate an overall growing interest in the area. For now, it’s wait and see. $20.00 10% $19.00 8% $18.00 6% $17.00 4% $16.00 2% $15.00 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: Average asking rents remain steady in the low-twenties, slightly below surrounding submarkets BWI and Annapolis. Businesses in this Submarket (based on number of employees) Construction 7.3% P ublic Administration 3.0% Other S ervices 7.2% Other 4.8% M anufacturing 3.5% Wholesale T rade 5.5% J. Scott Wimbrow, SIOR EXECUTIVE VICE PRESIDENT/PRINCIPAL MacKenzie Commercial Real Estate Services, LLC Accommodation and F ood S ervices 12.9% Retail T rade 20.9% Health Care and S ocial Assistance 10.8% T ransportation and Warehousing 2.2% I nformation 0.8% F inance and I nsurance 3.9% Real E state and Rental and L easing 3.9% P rofessional, S cientific, and T echnical S ervices 5.3% E ducational S ervices 7.9% Above: This submarket is characterized by a large mix of service and retail trade businesses representing nearly 40 percent of the Corridor’s employment. The Education and Construction fields make up the third and fourth largest industries by employment. * All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 3/2014. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT Towson FIRST QUARTER | 2014 Overview: Towson, the county seat of Baltimore County, is located directly north of Baltimore City, inside the beltway, east of I-83, and along York Road. It is home to two universities, Goucher College and Towson University, as well as three regional hospitals, Greater Baltimore Medical Center (GBMC), St. Joseph Medical Center, and The Sheppard Pratt Health System. The headquarters of Whiting-Turner Construction is also located in Towson, in addition to the offices of well known attorneys and engineers, movie and music theaters, and nationally recognized retailers. S Quick Stats Number of Buildings Market Size 89 5,703,570 sf CHANGE SINCE LAST teady growth of business and development continues to stimulate Towson’s local economy. Known for its four-story Towson Town Center shopping mall, downtown Towson continues to revitalize its retail, restaurants, residential, and office buildings with a private investment of roughly $500 million. Currently, more than $85 million in development projects continue to thrive as projects like Towson Square, with the construction of new restaurants, new 8,500-seat Cinemark Theater, and parking garage, show significant progress along the Towson skyline. Notable residential construction projects include four new developments; The Quarter, a 900-unit apartment and condominium project; Towson Promenade, a 379-unit luxury apartment complex; Palisades, an upscale apartment complex featuring 330, one, two, and three-bedroom units in downtown Towson; and Winthrop Luxury Apartments, which will deliver an estimated 470 units in 2014. As retail and residential projects deliver and fill, projects with office components including Towson Square and Towson Row will likely draw attention from firms looking to be close to the county seat, universities, medical centers, and retail amenities. The submarket continues to be driven by the medical and higher education communities. Among Towson University’s several campus development projects, include parking garage and additional student housing agendas. GBMC and Saint Joseph’s Hospital also continue to direct market activity with several small partners and affiliates taking space or expanding current office locations. The Towson submarket experienced a third quarter of negative absorption, approximately 10,780 square feet (sf ), edging vacancy rates up 0.45 percent to 16.06 percent. Average rental rates remain competitive at $21.03 per square foot (psf ), up $0.55 psf from the same period one year ago.  CURRENT Direct Vacancy Vacancy W/ Sublet Net Absorption Avg. Asking Rate 16.06% 16.20% -10,780 $21.03 QTR     YR     100,000 Net Absorption/Historical Vacancy Rates Vacancy Rates % Net Absorption 18% 16% Quarter Highlights Absorption (sq. ft.) 50,000 14%  Law firm Bodie, Dolina, Hobbs, Friddell & Grenzer, P.C. took occupancy of approximately 17,000 sf of space at 305 Washington Avenue. The regional law firm signed a lease for the space in the Class B office building in the third quarter of 2013.  Towson University renewed their approximately 18,000 sf of space at York at Terracedale. Built in 1982, the 70,470 sf Class B building is fully occupied.  General Dynamics has also taken occupancy of space that was annouced in the second quarter of 2013. The firm signed a lease for approximately 24,700 sf of space at 1 W. Pennsylvania Avenue shortly before the building was sold. 0 12% 10% -50,000 8% -100,000 6% 4% -150,000 2% -200,000 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: The market continues to recover from heavy losses in early 2011 and 2012. www.mackenziecommercial.com Vacancy Rates OFFICE | MACKENZIE MARKET REPORT Towson Rental Rate/Vacancy Rates $22.00 FIRST QUARTER | 2014 Vacancy Rates % Rental Rates 18% $21.00 16% 14% Average Asking Rental Rate $20.00 12% $19.00 10% Market Forecast The Towson core continues to be driven by the residential and commercial retail sectors with the office market still struggling to bring big players to the market. Heritage/ Cordish has completed its new E. Pennsylvania Avenue garage with the movie theater opening for business by August. L.A. Fitness is very close to its grand opening and a few new first floor retailers have opened for business including Howard Bank and Uncle Wiggly’s sub and sandwich shop at 22 W. Pennsylvania Avenue. Caves Valley Partners is zeroing in on a large food user with its residential towers not far behind. The hope is with the new retail and residential development that office traffic will increase to create the live, work, and play environment that is the vision of the current administration. $18.00 8% 6% $17.00 4% $16.00 2% $15.00 0% 2010 2011 2012 Quarters/Years 2013 2014 Above: Rental rates in the Towson submarket remain on-par with its counterparts in the Northern Metro area, hovering in the low twenties. Businesses in this Submarket (based on number of employees) Construction 3.5% P ublic Administration 9.1% Other 2.8% Wholesale T rade 1.2% Retail T rade 10.3% Other S ervices 5.8% T ransportation and Warehousing 0.5% I nformation 2.6% M anufacturing 3.4% Accommodation and F ood S ervices 5.0% F inance and I nsurance 6.0% Real E state and Rental and L easing 2.0% William W. Whitty, Jr., SIOR SENIOR VICE PRESIDENT/PRINCIPAL Health Care and S ocial Assistance 26.7% P rofessional, S cientific, and T echnical S ervices 10.8% MacKenzie Commercial Real Estate Services, LLC E ducational S ervices 10.4% Above: Towson has a large percentage of Healthcare and Social Assistance employees, representing nearly 27 percent of employment in this submarket. Retail, Educational, Professional, Scientific and Technical services make up an additional 32 percent of the economy. * All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 3/2014. www.mackenziecommercial.com Vacancy Rates