Demand for office space in suburban Maryland and Northern Virginia is still struggling to rebound to pre-recession levels, but at least one D.C.-area developer is rolling the dice that the tenants will come if you build it first.
Columbia-based Corporate Office Properties Trust (NYSE: OFC) plans to break ground speculatively on a 75,000-square-foot office building at the University of Maryland’s 126-acre research park. The park, called M Square, is already home the National Oceanic and Atmospheric Administration, the Food and Drug Administration’s Center for Food Safety and Applied Nutrition, and Raytheon.
The planned three-story building at 5801 Research Park Drive was designed by Powers Brown Architecture and is slated to include 25,000-square-foot floorplates and an outdoor plaza.
The vacancy rate in suburban Maryland now hovers at about 20 percent, according first-quarter stats from JLL, with Prince George’s County coming in higher at about 29 percent. At the same time, the university’s presence has been a positive influence on the office market, generating demand from university spinoffs like FlexEl LLC, which committed earlier this year to leasing 10,000 square feet in College Park for a new research, development and manufacturing facility.
The real estate investment trust previously developed two office buildings combining for about 240,000 square feet under its partnership with the university; both are fully occupied. COPT CEO Stephen Budorick said demand is strong enough from research and innovation firms to kick off the new development. The site will also benefit from its location adjacent to one of the planned Purple Line stations, which is expected to create even greater demand.
Prince George’s County Executive Rushern Baker noted in a statement that the project is the first office building to be developed speculatively, or without any tenants signed on to pre-lease space, in at least a decade. COPT’s decision to move forward is a sign of a growing interest from the private sector to develop in the area. Another example of comes from former Under Armour Inc. exec Scott Plank, himself a Maryland grad, whose War Horse LLC is planning to convert a former auto maintenance facility at 4425 Paint Branch Parkway into a new arts and entertainment venue in partnership with the university.
Daniel J. Sernovitz
Washington Business Journal