Prince George's County's office vacancy rate dropped to 11.3 percent in the first quarter of 2004, from 11.8 percent a year ago, according to real estate information company CoStar. Brokers said a growing local economy and renewed interest in the county's office market increased leasing activity.
With interest rates rising, but still at very low levels historically, more business executives are willing to sign leases, said Michael Royce, a senior vice president at Transwestern Commercial Services.
"There is a comfort level [that] now is the time to do it, before the interest rate picks up," he said.
Royce said that in the first three months of the year, he filled 104,000 square feet of space in "flex" buildings, which have both office and warehouse space, in Prince George's. It's a substantial figure for the county's relatively small office market.
"It could lead us to an incredible amount of [office space] absorption this year, but I doubt we can keep it up," Royce said. "It's a good start."
Commercial developers are also paying more attention to Prince George's, said Paul Collins, a managing director of D.C.-based Cassidy & Pinkard. Nearly 200,000 square feet of office space is under construction in the county, nearly double the square footage built during the same period last year. A few companies even have plans to construct office buildings without having tenants lined up before construction begins, Collins said.
"I'm actually seeing a lot more activity in the central and northern part of the county," Collins said. "There's more investment activity going on over there. More people are looking at Prince George's . . . and longer term, that bodes well for real estate values."
In years past, investors would only look far beyond the older, urban communities inside the Capital Beltway. Real estate brokers and businesses have begun to pay attention to the central and northern parts of the county's market because of its transportation infrastructure, including access to Amtrak stations, Metrorail and highways that connect the District and Baltimore, said Kwasi G. Holman, president of Prince George's County Economic Development Corp.
Holman said he thinks the local office market will continue to improve.
"From what we're seeing, there is both expansion of existing companies who want to add more employees, and five or six [companies] are looking at coming into the county," he said.
Most of the businesses that are leasing office space in Prince George's are federal contractors that want to locate near NASA's Goddard Space Flight Center in Greenbelt, the U.S. Census Bureau's office park in Suitland and other federal agencies, he said.
In Bowie, a city with flourishing neighborhoods and a retail center, the office market is more closely tied to the growing residential sector. More expensive homes have been going up in the past few years, which local real estate developers say is important because businesses often locate near the homes of their executives.
Gerard "Jerry" Wit of MIE Properties Inc. of Baltimore said the company is trying to take advantage of that connection. Earlier this year, the developer won approval to convert its 14-building office park in Bowie, known as the Maryland Science and Technology Center, into a commercial and residential complex. The developer annexed another 200 acres near the intersection of Route 3 and Route 50 and is planning to build two additional 40,000-square-foot office buildings, 866 town homes and retail space.
"The leasing is very strong," Wit said. MIE will break ground on the two new office buildings this month and is still planning the project's retail and residential additions.