Few say the real estate market is overbuilt, as it was in the late 1980s. And, while many expect that the region will get more shops, offices and warehouses and perhaps even a major hotel, the onslaught of development and leasing may not be what it's been.
Bank of America Corp.
Many owners and investors in real estate went bankrupt under a crush of vacant buildings in the early 1990s. But many who survived likely went on to some of their best years as the economy soared later in the decade.
So at the first signs of a softening economy, banks and Wall Street investors in real estate take a more cautious approach. Fitzgerald said he would be looking for developers to take a larger equity stake in their projects and to lease more of their buildings before they break ground.
Further muddying the picture are technology companies that have filled a large number of buildings in recent years but are now scaling back or going out of business. Landlords are asking for more rent upfront.
Some of the standouts from 2000 will remain standouts in the next year, local agents said. They include the Baltimore-Washington corridor's office market and Harford County's warehouse market.
But the region will reflect a national slowdown, said David Houck, of the Staubach Co. While even Columbia has been no match for the hottest markets, including San Francisco, Boston and Northern Virginia, all will see a slight cooling-off this year.
"The frenzy, the panic is gone from the marketplace," he said.
Office buildings are planned on the fringes of downtown, such as in Locust Point and Inner Harbor East, said Douglas E. Schmidt, a senior associate at CB Richard Ellis Inc. They are becoming "legitimate" office addresses for tech companies and others.
Some tech companies are locating in Class B buildings in the central business district, lured by cheap rent from Boxer Property Management Corp., but experts are skeptical about any major Class A development in the central business district.
Development companies including J. J. Clarke Enterprises and Lockwood Associates have sites but no construction dates.
Financing remains the problem.
Developers with expensive pieces of land need to build large towers, but there are no large anchor tenants to fill them and attract investment.
Another problem is rents, said Courtenay Jenkins, senior vice president at Trammell Crow Co. Vacancy rates will continue to drop in the city and Baltimore County, and that will force up rates, but not enough to pay for new construction. Class A rents in the city are about $30 a square foot a year and county rents are around $25 a square foot.
"We're not looking for a bang-up year in 2001," Jenkins said. "Companies in the city and county will pretty much stay put due to lack of alternatives."
In the Baltimore-Washington corridor, which has been the hottest market in recent years, top-tier offices will likely continue to attract financing because there are still in demand. More definite need for space will be clear by February as companies decide what their expansion needs will be, said Randall M. Griffin, president and chief operating officer of Corporate Office Properties Trust.
"I expect good solid growth," he said. "The projects under way are probably OK. It's the next round that people should look at carefully."