The amount of vacant office space in the Baltimore metropolitan area fell to its lowest level in six years in 1994, the latest indication of the local commercial real estate market's gradual recovery.
Colliers Pinkard's market study also states that the lack of new office construction and continued absorption -- space removed from the total inventory through leasing activity -- will continue to reduce vacancy levels, which now stand at 15.1 percent, in 1995.
The vacancy figure, which represents an 11 percent drop from a year ago, dovetails with Pinkard's statistic that a record 30.8 million square feet of commercial space is occupied in the region.
But the study notes that a vast disparity exists between the levels of recovery experienced in many areas.
Downtown Baltimore generated its poorest leasing results in more than a decade. Its largest new office lease, for instance, was W F Corroon's 20,000-square-foot transaction in the 30-story Commerce Place.
"The downtown results aren't much of a surprise," said Jeffrey B. Samet, a Colliers Pinkard vice president.
"Major firms headquartered there have all undergone restructuring, and they're major occupants. Furthermore, that process has clearly affected the occupancy of service-related entities such as law firms."
Pinkard expects much of the corporate downsizing downtown also will persist.
In all, Pinkard's report is based upon activity in 499 buildings comprising 36.3 million square feet.
Much of the activity downtown involved significant lease renewals by CSX Corp. in One Charles Center, law firm Miles & Stockbridge in 10 Light St. and the state Attorney General's Office in St. Paul Plaza.
From an investment perspective, the two notable office deals in 1994 were Emmes & Co.'s $25 million purchase of the 22-building Meadows Business Park, and the Meridian Group Inc.'s $17 million acquisition of the two-building Dulaney Center, in the Woodlawn and Towson sections of Baltimore County, respectively.
The overwhelming majority of absorption -- 90 percent -- occurred in the suburbs.
Howard County, boosted by Arbitron Rating Corp.'s 127,000-square-foot relocation from Prince George's County and new leases by Signet Mortgage Corp., shaved its vacancy rate )) to 14.1 percent, from 18.06 percent at year-end 1993.
The other major activity occurred around Baltimore-Washington International Airport, which has been stung by government and defense cutbacks. Its availability level is 21 percent, down nearly three percentage points from last year.
The "suburban north" region, including Towson, White Marsh and Hunt Valley and consistently the strongest performer locally, posted a 10.8 percent vacancy rate, the lowest in the region.
Overall, suburban markets finished the year with a 13.2 percent vacancy rate, down from 16.3 percent last year, Pinkard reported.
If 1995 absorption figures meet or exceed this year's levels, Pinkard anticipates local rental rates will begin to inch upward within the next 12 to 15 months.
AROUND THE AREA
Overall vacancy rates for the region's office buildings has declined to the lowest level in six years.
Market ... ... ... ... Percent vacant
Downtown ... ... .. .. 18.1
Suburban north ... ... 10.8
Suburban west .... ... 11.0
Suburban south .... ... 21.0
Howard County .... ... 14.1
Northern P.G. County .. 21.2
Metropolitan area ... .. 15.1
Source: Colliers Pinkard