We are beginning to see a slow thaw
in the commercial real estate markets.
This thaw is being driven by (1) institutions, (2) health care
providers, and (3) small businesses. While
not enough to drastically reduce the high vacancy levels in retail and office
properties, meaningful reductions in real estate could be apparent in the first
quarter of 2012.
Arguably, institutions such as Johns
Hopkins University, University of Maryland, Baltimore and University of
Baltimore never slowed for the Great Recession.
With diverse funding commitments from large endowments, the National
Institutes of Health (NIH) and wealthy benefactors, these three educational
institutions continued their multi-billion building campaigns on their
respective campuses. Johns Hopkins Medical
Institutions is nearing occupancy of Sheikh Zayed Tower and the Charlotte R.
Bloomberg Children’s Center, a combined investment of $1.1 billion. University of Maryland, Baltimore is constructing
its $157 million expansion to the Shock Trauma Center, with its BioPark Building
3, a $40 million life science building, getting started. Meanwhile, Mercy Medical last year completed
its $400 million Mary Catherine Bunting Center.
In Mid-town, the John and Frances Angelos Law Center is being constructed
at a cost of $107 million. The growth of
these institutional players will continue to anchor Baltimore’s economy and
having a positive effect on surrounding real estate markets.
Primary health care providers,
despite being unsure about the wild political climate in Washington, D.C.
(remember “repeal and replace”?) find themselves no longer able to sit on the
sidelines. The U.S. Supreme Court announced
this morning that it will hear the law suit challenging the Patient Protection
and Affordable Care Act (Dept. of H&HS, et al. v. Florida, et al.) in
mid-March, with a decision by early June.
Notwithstanding the pending U.S. Supreme Court case, many primary health
care providers are proceeding with expansion plans, and have begun to commit to
expanding clinical space and buying private practices to expand their networks. It appears that the health care industry is
betting on most of the Affordable Care Act being affirmed, thus creating more
insured patients in 2014.
Working on behalf of Total Health
Care, Inc., our firm negotiated a lease for a new clinic at 700 Washington
Blvd, in Washington Village. This 4,000
square foot clinic opened on October 1, 2011.
Total Health Care continues to consider additional locations. We are aware of three small physical therapy
practices searching the Metro Baltimore region for new locations. Our firm is also representing a physician in
the acquisition of a building to be converted from retail space to medical
office space. As one more example, the
former Bradford Federal bank branch located at the corner of York Road and
Homeland Avenue was recently purchased by York Road Health Care, LLC and is
being converted into medical office space.
Finally, small businesses, including
our firm, are moving, renewing leases, downsizing and beginning to shake off
the Great Recession with the blind faith that enough is enough. Our firm is representing small (less than
3,000 square feet) tenants in the purchase of buildings and leasing of office
space. We recently negotiated leases on
behalf of an insurance agent, a construction company and a non-profit. Everyone is now sick and tired of being sick
and tired. May that attitude continue
into the New Year!
