Could Baltimore’s boom in apartment building be hindering its housing market?
Ross Mackesey, president of the Greater Baltimore Board of Realtors, said new apartments loaded with amenities may be delaying first-time buyers from entering the market because the new rentals have perks that make owning a home a little less pressing for some residents.
“Certainly, when I was in my 20s, what we rented was very basic shelter, and now, particularly all of these new apartment buildings, have all sorts of amenities, so even though someone might be paying $1,500 for a one bedroom, they have a gym, a social area … they have a social event coordinator,” Mackesey said with a laugh. “It’s a different lifestyle.”
Recent data doesn’t provide much clarity about whether spiffier apartments are keeping potential first-time homeowners out of the market. Both sectors have reported mixed results in recent months, making it nearly impossible to nail down a definitive answer about whether younger residents are not buying homes in part because of the lure of apartment living.
Mackesey released his latest market commentary Wednesday, and generally found the housing market in the Baltimore metro area to be performing well. In fact, the average price of a non-distressed transaction of $311,378 set an all-time high for the month, eclipsing the previous mark of $308,858 set in March 2007.
The housing market in the city itself continued to send mixed-messages about its health. Mackesey found that the number of units sold were up 27 percent and ratified contracts were up 24 percent. But the average price dropped $10,000 and the average price fell by 25 percent.
Class A apartments in the city didn’t have such a stellar first quarter with the vacancy rate ticking up 7.8 percent to 7.6 percent from the previous year, according to a recent report by real estate research firm Delta Associates. That same study found that effective rents in the city also fell 3.3 percent in the first quarter.
Meanwhile, not everyone is so sure that the perks of apartment living are contributing to keeping people out of the market.
Joseph T. “Jody” Landers III, a Realtor at Prudential PenFed Realty called the idea “interesting,” but said he feels that its most likely financial issues hindering first time buyers.
“I think what’s keeping people out of the housing market is the problem of coming up with a down payment, excessive debt loads that a lot of people have coming out of college,” Landers said. “When you look at the first time buyer’s market it’s still 24 to 35 year olds who are buying.”
$15.9M for Stanford Trading Center
Boston-based Cabot Properties purchased a four building 175,380-square-foot portfolio in Frederick’s Stanford Business Park for $15.9 million. Ruppert Properties, which has been involved with the development of the business park during the past 12 years, sold the property that was intended to “provide opportunities for small-to-mid-size businesses seeking affordable, functional flex/warehouse and office space.”
The 18-unit luxury Ivy Hotel will be getting ready to host its first guests shortly. The building, located at 1125 N. Calvert St., has some already unique features and was planned to be one of the highest-end hotels in the city. But an email to news media touting the hotel, with rooms ranging from $475 to 1,400 a night, approaching its opening open included maybe the quirkiest detail of all — the house car at the hotel will be a black London taxi cab. No word about what side of the street it will drive on.
Danielle M. Beyrodt
Vice President – Leasing & Acquisitions
Hill Management Services, Inc.
B.S. Towson University
M.S. Real Estate Development, John Hopkins Carey Business School
How did you end up in commercial real estate?
I participated in many trade organizations and other professional organizations when I was the marketing director for Marks Thomas & Associates Architects. I found the commercial real estate professionals I encountered to be the most dynamic and enthusiastic people – I saw them as the movers and shakers in the industry. Soon after, I joined Casey & Associates and worked as an industrial broker, where I met many of Baltimore’s best brokers in the industry today. Next, I started working for Hill Management Services, Inc., which has been a great fit for me for the past 15 years. NAIOP Maryland has been a tremendous resource for me and I currently serve on its board of directors.
What is the most important part of being successful in your field?
I have really enjoyed developing relationships through the years with brokers and tenants. Commercial brokers are still the dynamic and enthusiastic group I was attracted to before I was in the industry. They are a great business source, and bottom line is that people want to do business with people they know, trust and enjoy being around. I have maintained great relationships with many brokers I have completed transactions with through the years. Tenants come in all shapes and sizes. It is really interesting to me to learn about their different businesses. When a prospective tenant calls, that is when the relationship starts, and I truly am interested in what they do and need. Once they are my tenant I want to keep them and I help make sure our company provides them with the best possible service. Our tenants are our most important asset.
When faced with an issue in any industry you have to assess all the factors and conditions before coming to a decision on how to best resolve it. In the commercial real estate industry, each tenant and transaction is different and the solutions to what may seem to be typical issues are not always the same. In order to figure out the unique solution for a particular user, whether it is creative financing, building-to-suit or resolving maintenance issues, you need to keep your mind wide open.
Biggest transaction in the past year?
The acquisition of Mercantile @ 95, a two-building office/flex portfolio in the White Marsh area comprising approximately 97,000 square feet of space. Next, we leased one of the entire buildings to Loomis Armored US for 50,223 square feet of space. This was completed less than five months after our acquisition of the portfolio which validated our vision of the long-term value and marketability of these assets. Prior to the lease, our company invested significantly in the buildings with the installation of landscaping, new signage, and a new storefront facade treatment.
The Food Market, Hamden, MD
Recommended vacation spot:
Marco Island, FL