COVER STORY, JUNE 2011

DEVELOPMENTS IN OFFICE
Few markets have found needs for new projects.
Savannah Duncan

While office developments are overbuilt in many markets, there are some areas that need more space. Some large, speculative office projects are currently under development throughout the Southeast, such as in Louisville, Kentucky, and in Maryland. These developments are evidence that the office sector is gaining traction in some markets. 

A rendering of the 125,000-square-foot building under construction at 600 North Hurstbourne in Louisville, Kentucky.

In Louisville, a new 125,000-square-foot, Class A building, located at 600 North Hurstbourne, is under construction. It is expected to open in January 2012 as the first LEED-certified speculative office building in Louisville.

“We knew that it was going to be a little bit of a risk in doing a speculative office building at this point in time, but we see the demand increasing every day in the marketplace,” says Lewis Borders, vice president of operations for Louisville-based NTS Development.

The building is the first to be constructed in the 200-acre office campus known as ShelbyHurst Office Campus, which sits on the University of Louisville’s Shelby campus and is owned by the University of Louisville Foundation. After an extensive interviewing process, NTS Development was selected for the rights to develop the building.

“The location is paramount,” Borders says. “We think it’s the best infill development site in the entire country.”

The design and the amenities make this project stand out. Architect KlingStubbins, through its Cambridge, Massachusetts, and Philadelphia offices, has created a design that is sleek and cutting edge, says Borders. The building will have high-performance metal panels with full-height ribbon windows, which will allow for a good amount of natural light.

Amenities of the project include a conference room with full computer access, an outdoor break area, a recycling program, preferred parking for hybrid or fuel efficient vehicles and a state-of-the-art HPHV system that will provide fresh air ventilation.

Borders believes the office building will be a success because Louisville has a strong downtown market, the location and because it is the newest office building to be constructed in the last 5 to 6 years.

“The market is stable and only continues to improve every day going forward,” he says. “That’s not to say we haven’t had our downsizes or our share of shadow and sublease space become available, but a good bit of that has worked through the market and we feel it’s going to be stable.”

A rendering of the new 100,000-square-foot office building under construction at Maple Lawn in Howard County, Maryland.

Another office building aiming for LEED standards is the 100,000-square-foot building under construction at the 600-acre, mixed-use community Maple Lawn in Howard County, Maryland. The building, set to open in the fourth quarter of 2011, will feature high-end finishes and open floor plans.

A new joint venture between St. John Properties and Greenebaum & Rose Associates will share ownership of the three existing buildings in Maple Lawn that total approximately 285,000 square feet of Class A office space. Given the 98 percent occupancy of the current buildings, Jerry Wit, senior vice president of marketing for Baltimore-based St. John Properties, says that the new building should have no trouble filling as well.

“St. John has an excellent reputation as a landlord who keeps its properties in first class condition and retains its tenants,” Wit says. “We have an excellent relationship with the brokerage community because we pay commissions, have a simple lease and manage our properties well.”

Wit says Maple Lawn is attractive to residents and tenants because of Howard County’s proximity to Washington, D.C., and to Baltimore.

“It’s one of the most desirable counties in the United States to live in,” he says.

Because the offices are located in a mixed-use community, employees who work in Maple Lawn have access to a variety of amenities such as a state-of-the-art fitness center and a variety of shops and restaurants within walking distance.

Under the joint venture, St. John and Greenebaum have the rights to develop an additional 570,000 square feet of office space in five buildings, which Wit hopes will all be LEED certified.

Another Maryland project under development is the new 500,000-square-foot, four-building Fieldside Commons, located adjacent to Interstate 95 and Maryland Route 22 in Aberdeen, Maryland. The first building, totaling 120,000 square feet, is expected to open in January 2012. The buildings have been designed with the hope of gaining a LEED silver designation.

The development is a unique project in that Kinsley Properties and Sherwood Partners are developing Fieldside Commons to satisfy growth generated by the Base Realignment and Closure (BRAC) Initiative in Harford County, which is adding thousands of new jobs to the area.

“We’ve been very fortunate by what happened with BRAC,” says Doug Brinkley, senior managing director of Baltimore’s Cassidy Turley office, who has been selected to lease the project. “We have two military bases here, Fort Meade and the Aberdeen Proving Ground (APG), which were the beneficiaries of the base realignment closure commission recommendation back in 2005.”

He says that once Fort Monmouth in New Jersey is closed in September, Aberdeen expects to receive another wave of BRAC activity because government contractors will want to establish a presence nearby.

“When we get closer to that time, we believe a lot of other decisions will be made about who’s coming down here and that will be a demand driver for office space,” Brinkley says.

The project is located west of I-95, which Brinkley says has caused a lot of enthusiasm and interest about the development because most of the recent developments have been east of I-95 .

“[Fieldside Commons] is between where people work at APG and where it has been determined two-thirds of APG employees will live, in Bel Air, Maryland. Because of our proximity right there on I-95 between where people work and play, we think this is a distinctive and a differentiating location.”

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