Aaron Cahall, The Examiner
2008-04-16 07:00:00.0
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BALTIMORE -

Local real estate experts, perhaps unsurprisingly, were generally optimistic about the Baltimore-Washington economy in a recent Johns Hopkins report. But some of their other conclusions provide a deeper glimpse into undercurrents in the local commercial and residential markets.

Green building practices, the value of transit-oriented development, new waterfront projects and the looming benefits of the Base Realignment and Closure process were all highlighted as major themes in the report from Johns Hopkins University’s Edward St. John Department of Real Estate.

While the data was collected in November and the economic situation has changed in the six months since, project manager Eric Smart said the semiannual report paints an accurate picture of industry sentiment on the commercial real estate market.

“Its hallmark is that it’s forward looking over an 18- to 24-month period,” Smart said.

More than 120 local industry leaders were interviewed for the report, with 88 percent saying the region’s economy will outperform the national average in the next one to two years. However, 46 percent of interviewees said they believe development activity in the region will decrease, while 29 percent said it would remain the same and 25 percent said it would increase.

Developers will construct more green buildings in the next two years, 94 percent of interviewees said, while 70 percent believed tenants would demand green buildings and just 5 percent of respondents believed the extra cost to construct those buildings would exceed 15 percent, according to the report.

“Everybody is talking about it,” said Michael Anikeeff, chairman of the Department of Real Estate. “This is like not having A/C. The concern across the industry is if you don’t build green, even if it’s a totally modern building, is that it would be a B-class building.”

BRAC was also viewed as a major positive, emerging trend, but a long-term one. Seventy-four percent of interviewees said the region would begin to see BRAC activity in two years or longer.

“What we’re hearing is the first people moving here may not be permanent,” Anikeeff said. “They’ll come here, get an apartment, finish out the years they need for their pension and then go back to New Jersey.”

acahall@baltimoreexaminer.com