HometownAnnapolis reported a 1.33 percent rise in commercial vacancy rates during the third quarter of this year, an improvement over the 3.61 vacancy rise during the second quarter. Figures were provided by MacKenzie Commercial Real Estate Services, and percentage increases are over 2006 figures.

Despite the fact that more commercial space became available during the past year, commercial landlords continue to want almost $30 per square foot, with asking rents at $28.76 per square foot for the third quarter over the 2006 per square foot rent of $26.48.

Industry leaders attribute much of the vacancy rate jump to the completion of the $250 million Park Place development, located on inner West Street, where tenants can expect to pay rates of between $30 and $35 per square foot. Other new developments, such as the new Conte building, offer free access to a nearby fitness center and conference room and are located near other amenity-type businesses.

The rapidly growing availability of commercial space in Annapolis, including the 60,000 square foot Annapolis Exchange Building and the 38,000 square foot Annapolis Towne Centre at Parole, has done little to convince commercial landlords to lower their prices.

Annapolis commercial real estate brokers say that commercial owners have historically experienced low vacancy rates, though rents in the city have traditionally been among the highest in the Baltimore metropolitan area for the city’s approximately 3 million square feet of commercial space.

In addition, commercial landlords enjoy benefits from the high differential between their rents and the $60 to $80 per square foot prices charged in nearby Washington, D.C.

Some industry observers say that rents reflect increased costs of construction driven by U.S. competition with China for steel and concrete now that China has become a major player in the commercial construction arena.

Tags: Annapolis Maryland commercial real estate, commercial property leases, commercial property rentals, occupancy rates

Posted in Commercial Real Estate | No Comments