Move over horse racing, farming and manufacturing, you're being replaced.
Over the past five years, the storage and shipment of goods has become the fastest growing industry in Maryland, accounting for roughly 40 percent of the state's gross domestic product, according to a study by an industry trade group and the Johns Hopkins University.
"As companies' needs become more sophisticated, they're looking for a built-in consumer market and the best raw materials path," said David W. Baird, a Belt's Corp. vice president and past president of the Maryland Distribution Council, a public-private industry group that tracks the volume of local shipments.
The explosion of distribution facilities here also has generated new employment.
By the end of 1993, more than 104,000 Marylanders' jobs -- 6.1 percent of the total work force -- were tied to distribution and related services, according to the state's Department of Business and Economic Development.
Nationally, distribution and its related services has grown into a $500 billion annual industry in the United States, representing 11 percent of the U.S. gross domestic product, according to Maryland Distribution Council statistics.
AMB Institutional Realty Advisors of San Francisco confirmed plans yesterday to develop a new warehouse project in Anne Arundel County.
AMB's speculative venture is being backed by the California Pension & Retirement System, which is unusual because even mammoth retirement systems, such as the $100-billion California fund, are extremely cautious and rarely develop new buildings without tenants in place.
"We feel there are a number of positive market conditions at work," said Cynthia Sarver, an AMB vice president. "Rents have moved up sufficiently to justify new development, and if there's a large tenant in the market, there are very few options for them."
In AMB's case, the pension consultant plans to develop 150,000 square feet of state-of-the-art warehouse space in its 57-acre Techwood at BWI business park, in Hanover.
But AMB isn't alone in thinking the region's distribution market is ripe for new development.
On Monday, United Parcel Service announced it will build a warehouse and distribution center in Essex for $30 million, which may employ as many as 1,500 people. At the same time it scrapped plans for a $150 million East Coast distribution complex that had been slated to employ up to 4,000.
Unlike the various other projects, however, UPS will have the benefit of being on the east side of Baltimore -- rather than the Baltimore-Washington corridor -- with close proximity to the port of Baltimore.
The nearly 1.5 million square foot UPS project closely follows similar moves by Security Capital Industrial Trust and Manekin Corp., both of which have announced new speculative distribution centers in the past month.
The state's distribution revolution is based on Maryland's strategic East Coast location, transportation network and experienced labor pool. This has attracted such disparate firms as Saks Fifth Avenue, Fritz Cos. Inc. and General Electric Co.
From Maryland, companies can ship goods by tractor-trailer as far north as Bangor, Maine, and as far south as Savannah, Ga., in a matter of hours.
In fact, Baltimore is less than a single day's truck travel to one-third of the U.S. population, and the Baltimore-Washington area is the fourth-largest metropolitan area in the nation.
The four new speculative distribution centers planned here initially will add 1.2 million square feet of space -- roughly equivalent to four downtown skyscrapers -- to a market that already contains in excess of 100 million square feet.
And by 2003, those four new projects could be expanded to nearly 3 million square feet of warehouse space.
Under a standard job creation formula for industrial space, that 3 million square feet could translate into more than 3,000 new jobs, and other construction and support positions.
But with all the planned development, a few analysts and owners are beginning to wonder if enough is enough -- or maybe even too much.
"One million two hundred thousand square feet represents less than one year's absorption, based on a typical year," said Matthew J. Ryan Jr., a Casey & Associates Inc. principal who will be responsible for leasing efforts for AMB and UPS.
"So even if all the space announced in the Baltimore-Washington corridor is built, but not leased, it would still only drive the vacancy rate to 8.5 percent, which is considered healthy. Of course, that isn't going to happen."