9-19-2025 8:32am

Annual Forum Talks

Takeaways from Hunt Valley Business Forum’s Commercial Real Estate Symposium

(cover photo left to right): Krista Darrell, Hunt Valley Business Forum; Danielle Beyrodt, Hill Management Services; Lizzy Sweeney, Cushman & Wakefield; Patrick Smith, MacKenzie Commercial Real Estate Services; Danielle Bridge, Hill Management Services; Michael Ginsberg, KLNB

The number of retail store closures may exceed the quantity of openings in the coming year; while still struggling, the commercial office sector is showing some signs of life; and following years of being the highest-performing asset class, the warehouse/industrial sector is suddenly showing signs of softening.

Those are among the highlights and takeaways presented at the Hunt Valley Business Forum’s 12th annual Commercial Real Estate Symposium, attended by more than 150 business professionals at the Executive Plaza complex. Presenters included Michael Ginsberg, Principal, KLNB; Lizzy Sweeney, Senior Director, Cushman & Wakefield; and Patrick Smith, Vice President, MacKenzie Commercial Real Estate Services. The discussion was preceded by welcoming remarks from newly-minted Hunt Valley Business Forum Executive Director Krista Darrell.

Towson-area troubles expected to create opportunities in York Road Corridor

Michael Ginsburg explained that, statewide, retail vacancy rate hit a ten+ year high in 2021 of 6.19 percent, but the sector rebounded dramatically following the easing of COVID dropping to just around 5% two years later and now hovering around approximately 5.5% percent. Conditions appear to be slowly changing, he said, and Ginsburg expects more store closings than store openings in the near-term.

Matt Holman, Northmarq; Patrick Myers, Stewart Title Mid-Atlantic Commercial; Bill Holzman; St. John Properties

“The regional vacancy rate has remained low due to the lack of new ground-up construction starts, which has reached its lowest volume in the past two decades,” he explained. “High construction costs paired with increasing land value has kept most plans for new retail centers on ice.” One exception has been adaptive reuse activity including the transformation of enclosed malls or empty office buildings into retail configurations.

Ginsburg remains optimistic about the retail prospects in the Hunt Valley-Lutherville/Timonium-York Road Corridor area in general. “The Medtail sector, in which hospitals and other medical and healthcare-related uses are leasing space in shopping centers, remains strong,” he explained, “as downtown hospitals take occupancy in places located near their suburban patient base.” Mercy Health Services taking additional space on York Road at Ashland Market Shopping Center and GBMC’s presence at Padonia Village are examples.

The retail expert also cited the difficulties being encountered by restaurant and retailers in the greater Towson area, with many blaming rising crime rates as the reason customers are shying away from that area. “With concepts looking to relocate, this could create opportunities for retail projects positioned along the York Road Corridor.

Commercial office market still in recovery mode but showing “signs of life”

“Every year since the end of COVID, the commercial office space sector gets a bit better and, although we are still recovering from office closures and downsizing, the general consensus is that we seeing light at the end of the tunnel,” explained Sweeney. “Companies are still looking for creative ways to convince employees to come back into the office and some groups are making it a requirement. There is no doubt that Class “A office buildings are performing considerably better than Class “B and C” product as companies are attracted to projects recently renovated or amenity-rich.”

Bill Libercci, Northmarq Capital; Morgan Gilligan, Stewart Title Mid-Atlantic; Mark Lund, Alliance InfoSystems; John Power, Veritas Partners

Sweeney indicated that a trend she is seeing is lease terms being shorter as companies want that flexibility. Another challenge is abnormally steep tenant build-out costs created by the high price of construction materials and labor. To combat this, certain owners and developers are offering longer periods of free rents and expanding its range of concessions.

“We are seeing an increase in the popularity of spec suites – in which commercial office spaces are pre-built out and in ready-to-move-in condition including furniture,” Sweeney added. “Leases are considerably shorter but some groups are opting to sign longer-term leases within the building at expiration.”

Distressed assets are on the rise, she said, leading to the repositioning of certain buildings which have outlived their useful purpose containing commercial office space. Sweeney mentioned several projects in the Hunt Valley/Lutherville/Towson area which are currently going through this transformation, as well as others that are rumored to be engaged in this process. In a creative twist, Broadmead recently acquired 910, 920 and 930 Ridgebrook Road in the Loveton area, with the intent to convert the more than 220,000 square feet of space into 80 independent living residences and amenities.

For owners with struggling commercial office buildings, Sweeney indicated that adding amenities and energizing the workplace is the key to success. “The flight-to-quality is very real and the investment by Hill Management Services in the Executive Plaza complex and other assets is paying off,” she said. For companies looking to bring back employees, she suggested making interior spaces “more like home” with expanded kitchen areas, quiet spaces, and sections that minimize noise.

She added that “clients don’t come first, rather, employees do. So, if you take care of your employees, they in turn will take care of your clients.”

Pace of warehouse/industrial leasing “finally” softening

In the “all good things must eventually come to an end category,” a confluence of factors is suggesting that, after years of being the darling of the commercial real estate industry, the market is “finally” softening for the warehouse/industrial asset class. Smith suggests that the sector experienced the slowest rent growth – at 2 percent – since 2012 and sales prices have dropped by an average of 5 percent. The national vacancy rate has risen to 7.5 percent, an uptick of nearly one percent from the previous year but the real story is the six million square feet of negative absorption (down more than 100 percent) over the past year.

Aubrey Ann Hopkins, Crown Title Corporation; Tyler Wright, Shore United Bank; Ketch Secor, MacKenzie Commercial Real Estate Services; Joe Nolan, KLNB

Locally, prospects are a bit brighter. Negative absorption was less than 200,000 square feet of space (thanks, in part to the slowing of new construction), vacancy rate is considerably lower at 5.6 percent, and the average deal size is hovering in the 5,300 square foot range.

Smith said notable vacancies in the I-83 Corridor include 93 Beaver Court (100,000 square feet), 10820 Gilroy Road (approximately 86,000 square feet) and 11103 Pepper Road (nearly 38,000 square feet). On the positive side, significant leases were the 35,000 square foot deal signed by A&A Global Industries at 16 Stenerson Lane and Centurion Construction’s 14,442 deal at 330-336 Clubhouse.

“The growth of data centers continues in Maryland and Virginia and we are seeing no signs of this changing in the immediate future,” Smith said. “Next year should be more of the same,” he continued. “Warehouse/industrial rental rates are expected to remain flat or slightly decrease, and building pricing will either lower or remain flat due to excessive inventory. There will be emerging opportunities for tenants and buyers that are not traditional and, due to high construction and land costs, new development starts will be delayed.”

“Real estate is cyclical and after years of riding high, the warehouse/industrial might struggle for a short period of time, but I expect it to come roaring back – just like always.”

Hunt Valley Business Forum is the fastest growing business association in Baltimore County that supports, advocates, and leads growth for businesses from Lutherville to Sparks, Maryland. HVBF has been supporting the business community with informative panel discussions and networking events monthly and advocacy with public policy and membership committees. For more information, visit www.hvbf.org.