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The W.B. Mason warehouse and office on Gerwig Lane in Columbia. Last week, Washington Capitol Partners announced W.B. Mason signed a 16-year lease on the property. The privately owned office supply provider will occupy the building’s warehouse and house a sales team on the second floor. The first floor will be home to a “Whatta Bargain Store” selling new, used, discontinued and overstock furniture. (The Daily Record / Jason Whong)

Columbia industrial, office markets entice DC area investors

Peter Minshall, managing partner at Washington Capitol Partners LLC, believes Howard County, particularly the Columbia submarket, is ripe for greater attention from Washington, D.C., metro investors.

Interest in Howard County, which tends to be associated more with the Baltimore metro area, is being driven by such factors as the county’s quality major employers, the wealth of residents and new development in downtown Columbia.

“I think the investment community in the Washington metro area has overlooked Howard County and Columbia, but I think that’s changing,” Minshall said.

Land for industrial development in Howard County, especially closer to Interstate 95, is in demand because zoning limits industrial development and has created a land-constrained market. Demand for warehouse and distribution space in the area is also being driven in large part by e-commerce businesses that want to be in the I–95 corridor.

NGKF’s fourth-quarter industrial property report found the Columbia submarket with a 10.9 percent total vacancy rate, a total inventory of 6.5 million square feet and warehouse/distribution space asking rent of $4.84-per-square-foot.

After 30 years of development slowing in downtown Columbia, the planned suburban development has experienced strong investment in multifamily and office projects in recent years, which should provide the more urban lifestyle preferred by millennials.

According to NGKF, the Columbia office submarket in the fourth quarter had a direct vacancy rate of 7.9 percent for all office space, 285,900 square feet under construction and an overall asking rate of $25.03-per-square-foot.

“You are seeing a resurgence in Columbia that’s unprecedented because it went to sleep for 30 years,” Minshall said.

Washington Capitol Partners made its first investment in the market when it purchased the Symphony Woods Office Center for $15.6 million in 2008.

Minshall acknowledged the timing of the acquisition wasn’t the greatest. But the firm was able to keep that property 95 percent occupied throughout the economic collapse that followed the purchase.

Last May, the firm, which had been looking to invest in an asset that wouldn’t compete with Symphony Woods, bought a warehouse and office property at 9420 Gerwig Lane in the Guilford Industrial Park.

Initially, Minshall was approached about being a capital partner with a developer interested in dividing the 186,916-square-foot asset into five spaces and turning the dock doors into a storefront.

But Minshall decided he didn’t like that proposal, and he bought the contract via assignment and assumption. He closed on the property for $8.3 million with the price tag rising to $9.3 million after capital costs.

Although the building was nearly vacant, W.B. Mason Co. was leasing 19,000 square feet. After performing his due diligence on the market and the tenant Minshall felt confident he could entice the firm, which was on a month-to-month lease, to take more space in the building.

Last week, Washington Capitol Partners announced W.B. Mason signed a 16-year lease on the property. The privately owned office supply provider will occupy the building’s warehouse and house a sales team on the second floor. The first floor will be home to a “Whatta Bargain Store” selling new, used, discontinued and overstock furniture.

“We as a [private] company have a great deal of flexibility with what we can do with acquisitions, lease negotiations and tenants,” Minshall said.

Bullish on the market, Minshall said his firm is still looking to make more acquisitions in Columbia.


About Adam Bednar

Adam Bednar covers real estate and development for The Daily Record.