Commercial Real Estate Services DEDICATED SPECIALISTS IN THE MARKET FOR YOU Prepared For:
• Intro • Macro/Micro Overview Prince George’s County • Strategy • Recommendation • Sale • Conversion • Constructing the Best Team • Case Study TABLE OF CONTENTS 2
MEET YOUR EXPERTS 3 KENNETH FELLOWS PRINCIPAL ROBERT PUGH PRINCIPAL Keiry supports the landlord advisory team to maintain client relationships and maximize business opportunities. Keiry manages and monitors all real estate transactions from initial interaction to a fully executed deal by curating client documentation, conducting tours, preparing business proposals, creating marketing materials, and preparing market research reports. Keiry also maintains and updates information on current properties for sale and lease in the market. Prior to its acquisition by KLNB, Keiry worked for Edge Commercial. Previously having worked at Costar as a Marketing Research Advisor curating active listing information, and studying market trends. KEIRY MARTINEZ TRANSACTION MANAGER Robert Pugh and his team represent both owners and occupiers of commercial real estate in the National Capital Region. A third-generation Marylander, Robert leverages deep market knowledge and strong partnerships within the brokerage community to deliver maximum value to his clients and partners. He takes pride not only in his roster of clients but also in the number of years that he has been able to loyally work on their behalf. During his 25-year career, Robert has successfully leased or sold more than 10 million square feet of commercial office, medical, life science/laboratory, flex and industrial space. Robert’s range of expertise in commercial real estate includes landlord and tenant representation, investment sales, acquisitions, condo conversions, 1031 fulfillment, sale/leasebacks, and life science and laboratory leasing. He joined KLNB in 2023 as a Principal. Robert primary focus is Frederick, Montgomery, Howard, Prince George’s and Anne Arundel Counties of Maryland. Prior to KLNB, Robert was one of the founding Partners of Edge Commercial Real Estate where he helped grow and manage the company through its acquisition in 2023. Previous to launching Edge Commercial Real Estate, Robert was a Senior Vice President at Scheer Partners, Inc. Ken began his commercial real estate career with the Polinger Company in 1988. He then joined Scheer Partners in 1992 and successfully completed commercial real estate transactions for over three million square feet of office, medical, R&D and warehouse space during his tenure. With a primary focus on suburban Maryland, Ken has leased and/or sold over 300,000 square feet of office space each year. In early 2000, Ken was intimately involved in the opening of the Greenbelt, Maryland, branch office of Scheer Partners, overseeing a staff of seven. Under Ken’s leadership, the Greenbelt office consistently performed beyond expectations in terms of growth and revenue, and was awarded “Small Business of the Year” by the Prince George’s Chamber of Commerce in 2003. In early 2004, Ken was promoted to Executive Vice President. By 2006, Ken had increased the size of the office to 12 people. In September 2007, Ken and Rob Pugh joined forces with Joseph Sutton of Sutton & Associates, Marc Balamaci and Scott Mendelson (formerly of Scheer Partners) to form Edge Commercial. In 2023, Ken joined KLNB as a Principal. Ken has received many top producer awards over the years and most recently made it into the EDGE Elite in 2020, 2021 and 2022. Through his experience and excellent interpersonal skills, Ken has developed and maintained long lasting relationships with his clients. His knowledge of the market has enhanced his ability to add value to transactions through professional advice, superior negotiating skills and relentless follow through. A native Washingtonian touting over 20 years of retail experience, Matt has established himself as the premier landlord representation broker in the DC Metro market, providing essential insight and oversight for the activation of dynamic mixed-use developments. As a principal at KLNB, Matt provides industry expertise and leadership across the company’s verticals. Before joining KLNB in 2005, Matt was a partner at Crosbie Real Estate Group in Denver. He earned a degree in Real Estate & Urban Land Economics from Wisconsin School of Business at University of Wisconsin–Madison. MATT SKALET PRINCIPAL A Baltimore local, Aaron applies his regional knowledge to mid-market industrial and flex leasing and sales transactions throughout the Baltimore-Washington Corridor. A hands-on advocate, Aaron helps clients identify prime properties and negotiate contracts with savvy. Before joining KLNB, Aaron held roles in leasing and construction. He earned his Bachelor’s degree from Ohio Wesleyan University. AARON CARROLL OFFICE & INDUSTRIAL SPECIALIST OFFICE/FLEX/INDUSTRIAL RETAIL Chris LeBarton is the Director of Research for KLNB, and he brings more than two decades of commercial and residential real estate industry experience to bear for KLNB’s clients. Chris focuses on understanding today’s trends while monitoring tomorrow’s challenges and opportunities. Before joining KLNB, Chris directed Research for Inman, the leading news source for the residential real estate industry. He spent most of his time working on Inman’s 2023-relased Intel platform, Inman’s premier subscription offering that delivered audience-sensing and horizon-scanning insights to industry executives, proptech founders, and the investment community. Chris created the Inman Intel Index, a monthly sentiment survey that captured the pulse of the housing market’s key players. Prior to Inman, Chris was a Director of Market Analytics for CoStar and was one of the market analytics group’s founding research analysts. Chris’s insights were found in CoStar’s market and submarket reports, client presentations, and news articles. In addition to his analytical content, he collaborated with analysts across the country to better understand regional and national trends that impact various property sectors. Chris also spearheaded research integration, internal training, and product development initiatives. With over 25 years of professional experience, Marc brings a wealth of expertise to his role as President at KLNB. Drawing on his extensive development background, robust real estate network, and forward-thinking approach, Marc serves as the leading advocate for KLNB’s 55 partners and nearly 160 team members. He drives the firm’s distinctive strategy forward, identifying pivotal business opportunities that highlight the talents of KLNB’s real estate specialists. As a key member of the Executive Committee, Marc offers strategic guidance and mentorship across all divisions of the company. Since joining KLNB in 2017, Marc has spearheaded numerous accomplishments, including overseeing the successful execution of high-profile commercial real estate transactions, expanding KLNB’s market presence, and fostering strategic partnerships. Under his leadership, KLNB has achieved significant growth and solidified its position as a trusted industry leader. Marc’s vision and innovative approach continue to drive KLNB’s success, positioning the firm for continued expansion and excellence in the years ahead. Before joining KLNB, Marc spent two decades as Senior Vice President of Leasing at The Peterson Companies. During his tenure, he played a pivotal role in spearheading prominent mixed-use developments that left a lasting mark on the communities they served, including Downtown Silver Spring, Rio Washingtonian, National Harbor, Fairfax Corner, and Virginia Gateway. Marc holds a Bachelor of Science in Business Administration from the University of Maryland. CHRIS LEBARTON DIRECTOR OF RESEARCH RESEARCH MARC MENICK PRESIDENT
112 brokers specializing in retail, office, industrial, multifamily, land, leasing & sales 55 partners invested in leading KLNB to continued success 55 years as a market leader in the mid-Atlantic region 10 M+ square feet leased and sold annually 350+ national and local retail tenants represented 21 M square feet under management KLNB is the mid-Atlantic’s largest independent brokerage—a partner-owned and -operated firm offering comprehensive support and premier representation in retail, office, and industrial leasing and sales complemented by full-service financing and property management. Armed with razor-sharp expertise and over 55 years of experience, we go to bat for our clients—adopting their goals and mindsets to deliver results that advance and enhance their long-term objectives. This is the brokerage that has your back. THE IN FOR MARKET INSIGHT. 147 EMPLOYEES 112 BROKERS 55 PRINCIPALS GOVERNMENT ADVISORY HEALTHCARE ADVISORY FINANCING FINANCIAL ANALYSIS RESEARCH MARKETING & BRANDING TENANT REPRESENTATION LANDLORD REPRESENTATION INVESTMENT SALES PROPERTY MANAGEMENT ASSET MANAGEMENT FACILITIES MANAGEMENT 4
MARKET OVERVIEW/INSIGHT Vacancy & Market Asking Rent Per SF 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Vacancy Rate $9.00 $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 $16.00 $17.00 $18.00 Market Asking Rent/SF Forecast 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 © 2024 CoStar Realty Information Inc. 4/18/2024 Vacancy & Market Asking Rent Per SF 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% Vacancy Rate $6.00 $7.00 $8.00 $9.00 $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 Market Asking Rent/SF Forecast 04 06 08 10 12 14 16 18 20 22 24 © 2024 CoStar Realty Information Inc. 4/18/2024 Vacancy & Market Asking Rent Per SF 12.0% 12.5% 13.0% 13.5% 14.0% 14.5% 15.0% 15.5% 16.0% 16.5% 17.0% 17.5% Vacancy Rate $24.00 $24.20 $24.40 $24.60 $24.80 $25.00 $25.20 $25.40 $25.60 $25.80 $26.00 $26.20 Market Asking Rent/SF Forecast 16 17 18 19 20 21 22 23 24 25 © 2024 CoStar Realty Information Inc. 4/18/2024 INDUSTRIAL FLEX OFFICE 5
Reservoir Gorge Rocky Jone s Ln Wiehle Ave Utterback Store Rd Fall s Rd Democ r acy Blvd Travilah Rd Chain Br H idge Rd unter Mill Rd Vale Rd Roberts Rd Rolling Rd Ox Rd Braddock Rd ders on Rd Lee C hapel Rd Cl ifton Rd Gui n ea Rd Brookeville Rd Redl and Rd R a n dolph Rd Bel Pre Rd Arcola Ave M St NW Massachusetts Ave NW 14th St NW Seminary Rd Foxhall Rd NW Mi litary Rd S Van Dorn St Beul ah St Livin Broken Land Pkwy Go od Ho pe Rd E Capitol St NE Alab ama Av e SE Walker Mill Rd Sheriff Rd Woodyard Rd Bock Rd Rosaryville Rd Steed Rd Sands Rd Church Rd Mitc h ellville Rd Old Ma rlboro Pike Ma gothy Bridge Rd Wes t St Benfield Rd Cro w nsville Rd Deale Rd W Ba y Front Rd Frederick Rd Main St Braddoc k R d Little River Tpke Connecticut Ave NW 16th St NW 16th St NW Columb i a Pike Spencerville Rd Ritchie Hwy Riva Rd Riva Rd E Bay Front Rd Arlington Blvd Leesburg Pike Georgia Ave Georgia Ave Georgia Ave NW Columbia Pike S Columbia Pike Greenbelt R d Univers it y Blvd New York Ave NE W Central Ave Central Ave Ca p it a l B e ltway N Capital Beltway N Branch Ave N State Route 3 N John Hanson Hwy W John Hanson Hwy E 355 124 124 119 28 193 112 189 7 237 267 123 243 193 123 200 355 650 182 97 28 190 355 650 191 187 410 182 320 396 186 28 110 309 309 123 7 7 400 210 236 236 32 216 216 650 200 200 193 212 212 206 295 214 202 501 458 218 223 337 414 5 4 32 32 32 100 295 175 175 713 174 32 32 3 450 450 193 175 197 564 214 424 422 202 202 408 259 258 4 173 607 648 270 2 3 3 70 2 178 179 2 214 422 255 2 256 258 423 29 1 1 50 29 29 1 1 1 1 1 50 50 50 270 270 270 370 270 66 95 270 270 270 395 695 295 66 66 95 95 95 95 95 95 97 97 97 97 97 Weapons Center Surface U.S. Naval Andrews Joint Base Meade George G. U.S. Army Fort AcademU.S. NavaPark Conservation Hoyles Mill Park Recreational Germantown South SVU 3 Muddy Branch Lake Fairfax Riverbend Nature Preserve Scotts Run Park Conservation Point Blockhouse SVU 1 Muddy Branch Rock Run SVP SVU 1 Watts Branch SVU 3 Watts Branch Regional Park Seneca Valley Wolftrap Stream W&OD Trail Stream Valley Middle Run Stream Valley Long Branch Burke Lake Lake Accotink SVU 15 Rock Creek SVU 2 North Branch Park Conservation Lois Y. Green SVU 4 North Branch Regional Park Rock Creek SVU 6 Rock Creek SVU 3 Rock Creek Regional Park Wheaton Branch SVU 3 Northwest Stream Valley Pimmit Run Park Trail Special Capital Crescent Parkway Palisades Potomac Nature Center Long Branch Oxon Run Park Meadows Huntley Stream Valley Indian Run Valley Backlick Stream Park Conservation Watershed Patuxent River Watershed Duckett T. Howard Branch SVP Upper Paint Park Maryland City Park Fort Dupont Park Marvin Gaye Park Stream Valley Barnaby Run Valley Park Bald Hill Stream Enterprise Park Park Stream Valley Anacostia River Park Stream Valley Tinkers Creek Park Stream Valley Henson Creek PRG-Oxbow BWI Trail MD 175 Trail Patuxent North PRG-Little Dairy Farm Odenton Trail WB & A Spur Trail W.B.A. Railroad Park I Stream Valley Western Branch Park II Patuxent River Park III Valley Park Patuxent River Branch Stream Collington Park II Stream Valley Western Branch Nature Preserve Glendening Park Stream Valley Charles Branch Area Jug Bay Natural Park Stoney Creek Natural Area Greenway Magothy Park Lake Waterford B & A Trail Trail Marley Neck Trail South Shore Natural Area Bacon Ridge Broadneck Trail Farm Park South River Natural Area Deep Cove Course Golf Greens Hampshire Club Country Woodmont Course Base Golf Air Force Andrews Course Golf Walden Course Golf Renditions Golf Club Creek Oak Golf Club Marlton Course Golf Pointe Compasse Links River Golf South GolfUSForce Base Andrews Air Marshall Airport BWI Thurgood Tipton Airport School Montessori Manor School Stephen Knolls School Montessori Julia Brown School Episcopal Washington University Strayer School Elementary Westover LutheranSchoolConcordia Academy US Naval State Park Matthew Henson Area Environment Natural Severn Run NRMA Globe Comm State Park Rosaryville Franklin Point Park Rock Creek Greenbelt Park Section G Anacostia Park, BW Parkway Station Transmitter Air Force Refuge Research Patuxent Institution Smithsonian BROOKMEAD MILL BLACKROCK DAWSONVILLE DARNESTOWN GREAT FALLS GREAT FALLS MANTUA PIMMIT MASON GEORGE WOODBURN SPRINGFIELD NORTH HILLS HOLIDAY ROSSMOOR KENSINGTON SOUTH GLEN FOREST KENSINGTON NORTH BARCROFT LAKE CORNERS SEVEN HAVEN BELLE HUNTINGTON SAVAGE BURTONSVILLE HILLANDALE PARK RIVERDALE GODDARD LAKE ARBOR RAINIER MOUNT CHEVERLY WOODLAWN HEIGHTS DISTRICT CORAL HILLS GLENARDEN FRIENDLY HEIGHTS MARLOW HILLS TEMPLE JESSUP HANOVER ACRES SANDY HILL LEELAND KNOLLS QUEEN ANNE VILLAGE MARLBORO MARLTON CROOM WINDY OAKS PINDELL MARLBORO UPPER EDGEWATER LOTHIAN DAVIDSONVILLE LONDONTOWNE VILLAGE MONTGOMERY POTOMAC NORTH TRAVILAH MCLEAN VIENNA MERRIFIELD CHURCH WEST FALLS WAKEFIELD OAKTON FAIRFAX IDYLWOOD WOLF TRAP SPRINGFIELD SPRINGFIELD WEST STATION FAIRFAX CENTRE BURKE WEST KINGS PARK REDLAND OLNEY ASPEN HILL PARK TAKOMA WHEATON KEMP MILL COLESVILLE GLENMONT BETHESDA NORTH WHITE OAK CROSSROADS BAILEY'S GROVETON ROSE HILL FRANCONIA KINGSTOWNE VALLEY HYBLA SCAGGSVILLE LAUREL GREENBELT LAUREL SOUTH BELTSVILLE CLOVERLY PARK LANGLEY CARROLLTON NEW SEABROOK PARK COLLEGE ADELPHI CHILLUM LARGO WALKER MILL LANDOVER FORESTVILLE HEIGHTS HILLCREST RIVERDALE EAST CLINTON SPRINGS CAMP ROSARYVILLE GLASSMANOR CITY MARYLAND MILLERSVILLE KETTERING MITCHELLVILLE FERNDALE LAKE SHORE SOUTH GATE HAVEN GREEN PAROLE GERMANTOWN ANNANDALE BURKE BETHESDA SPRING SILVER BOWIE ARLINGTON ALEXANDRIA ANNAPOLIS WASHINGTON COLLEGE PARK BELTSVILLE GREENBELT BOWIE LARGO LANHAM CAPITAL HEIGHTS PENNSYLVANIA AVE CORRIDOR 5050 5050 495 495 495 495 LANDOVER PORTFOLIO 6
STRATEGY • Reintroduce the park to the market as an exclusive opportunity to be a part of a project strategically located at the intersection of Route 50 & I-495. Highlight the property’s strengths such as: • Proximity to a solid and growing employee base • Immediate access to a major transportation hub to include MARC, Amtrak, WMATA Metro, future Purple Line • Direct access to I-495 and Route 50 • Proximity to Washington DC and Annapolis • Growth potential and more • Rebrand the park with a new name to help signify the change and provide a new identity. • Introduce NEW OWNERSHIP and ensure the market is confident in ownership’s strength and ability to transact. • Build a strong team, fully committed and working toward the same goal. • Key Team Members – Architect & Engineer/General Contractor/Property Management/RE Attorney & Land Use Attorney • KLNB, Transwestern, DSC (currently working together) 7
180 DAY PLAN PERFORMANCE TIMELINE ACTION 30 DAYS 60 DAYS 90 DAYS 120 DAYS ±180 DAYS Leasing signs Marketing materials CoStar/LoopNet Accurate floor plans Virtual tours Press release Park signage Broker function VTS complete with stacking plans Introduction to current tenants Negotiation of rolling leases for 2024 Completion of Spec Suites KLNB has full control of the project & is focused on tours, new deals, and implementing strategy 8
STRATEGY - RECOMMENDATION • Multi-Story Office • We recommend a higher and better use for the multi-story office buildings – specifically 4601 Forbes Boulevard and 4601 Presidents Drive. Our goal would be to maximize income from each building with the least amount of cost over the next 3+/- years with the goal of converting them to gas station and retail pad sites. • IE Zoning allows for retail pad sites and for gas stations with a special exception • Demand from the retail community • Value of the retail transaction – exchange the lower valued assets into the highest valued assets • Value on the exit exponentially higher • Single Story Office • We recommend stabilizing these buildings while pushing rental rates and lease terms. • Continually analyze each individual asset and determine best steps forward. For example, empty 4325 Forbes Boulevard for a user sale. 9
STRATEGY - RECOMMENDATION • Flex/Industrial • We recommend pushing rental rates above current market levels given the combination of low vacancy and the lack of lower cost alternatives. • All vacancies should be cleaned on a regular basis (Weekly) to ensure they are free of dust, odors, spider webs and trash. • All vacancies should have stained or broken ceiling tiles replaced. • Accurate as-built drawings of existing conditions. • Hypothetical plans for select vacancies. • Spec Suites – consider delivering one or two at a time and continue as they are absorbed. • Recommended Suites at 4601 Presidents Dr (Suite 230 & 250) 10
REPOSITION - RENEWALS • Multi-Story Office - $22.00 - $25.00 Full Service • Tread lightly on rental rate increases - renew and retain existing tenants while minimizing transaction costs and downtime. • Introduce demolition and relocation clauses in all new lease amendments as a standard operating procedure. • Entertain short-term leases. • Single Story Office - $14.50 NNN • Renew and retain existing tenants while minimizing transaction costs and downtime. • Push rent on a case-by-case basis. • Introduce demolition and relocation clauses in all new lease amendments and new leases as a standard operating procedure. • Consider providing rental abatement on renewals to achieve a higher rental rate if need be. • Push for term and be less open to shorter term leases: 3-to-10-year leases. • Flex & Industrial - $16.50 NNN • Push rental rates above market. • Renew and retain existing tenants while minimizing transaction costs and downtime. • Push for term and be less open to shorter term leases: 3-to-10-year leases. REPOSITION - NEW LEASES • Multi-Story Office • Push to maintain rates in the low to mid $20’s while minimizing transaction costs and downtime. • Introduce demolition and relocation clauses in all new leases as a standard operating procedure. • Entertain short term leases. • Single Story Office • Minimizing transaction costs and downtime. • Push rent on a case-by-case basis. • Introduce demolition and relocation clauses in all new leases as a standard operating procedure. • Consider providing additional rental abatement to achieve a higher rental rate if need be. • Push for term and be less open to shorter term leases: 3-to-10-year leases. • Push medical uses • Proximity to University of Maryland Capital Region Medical Center • Lack of inventory • Location • Higher rental rates • Tenant participation in tenant improvements • Long lease terms • Exit strategy • Flex & Industrial • Push rental rates above market. • Minimizing transaction costs and downtime. • Push for term and be less open to shorter term leases: 3-to-10-year leases. 11
RECOMMENDATIONS SELECT VACANCY • 9,693 SF (flex/industrial) • Power wash warehouse floors • Paint interior warehouse walls white • Paint office / showroom white • Remove carpet in office / showroom DEAL $16.50 NNN 5-10 year term 3% annual escalations $15.00 tenant improvements LCD - 11-1-2024 4371 NICOLE DRIVE 12
RECOMMENDATIONS SELECT VACANCY • Suite 130 (8,541 SF- Office) • Selective demo to open the space and provide more natural light • Create direct entrances from the exterior of the building to the Premises • Landscape the exclusive courtyards • Paint the walls white • Remove all carpet • Ensure all lights work • Create hypothetical plans for multi-tenant and single tenant scenarios 4501 FORBES BLVD 13
SALE • Single Story (Office) • 35% occupied • 3 current vacancies totaling approx. 12k SF • IE Zoned • Transaction costs to relet vacancy vs value • ROI on the leases • Payback timeline • Exit value • Lack of available purchase opportunities in buildings this size • Potential clients: Daycare/School, Medical, quasi-medical, and Surgical Centers • $200 PSF sale price Our team proposes vacating the entire building and relocating the existing tenants into another building in the portfolio. This would allow us to have 18,708 SF available making the property ideal for an owner-user sale. 4325 FORBES BLVD - 18,708 SF 14
W X Y W X Y W X Y W X Y W X Y W X Y W X Y W X Y Forbes Avenue Martin Luther King Jr Highway (704) CONVERSION -4601 FORBES BLVD Willowdale Road • Zoning is IH (Industrial Heavy) which allows for conversion to retail pad sites with a Gas Station being the highest and best use. • Gas Station is subject to special exception. Sheetz believes it’s an 18-month process for approvals. • Restaurant with drive-throughs are prohibited in the IH Zone. • Current LOI Version 1 received from Sheetz at $396,000 per year NNN ground rent. • Execute on a long-term ground lease with a primary term of 15 or 20 years • Ample runway during the 18-month special exception process to execute on relocation of existing office tenants • Maximize value on the exit with a long-term credit ground lease. • Cap Rate on exit in 5%-5.5% range • $400,000-$425,000 annual ground rent 4601 FORBES BLVD - 44,555 SF SF 15
BOWIE LANHAM GLEN DALE EW CARROLLTON GLENGARDEN LARGO CROFTON MITCHELLVILLE VISTA GARDENS WEST ENTERPRISE SHOPPING CENTER LARGO TOWN CENTER 8703 CENTRAL AVE 1 2 4 3 4601 PRESIDENTS DR 4601 FORBES BLVD Retail Pad Ground Lease and Sale Comparables 1. VISTA GARDENS WEST 2. ENTERPRISE SHOPPING CENTER 3. LARGO TOWN CENTER $ 208,000 / YR $ 100,000 / YR $ 200,000 / YR $ 195,000 / YR $ 160,000 / YR $ 375,000 / YR $ 100,000 / YR $ 2,850,000 $ 165,000 / YR Sale Price Multiple LOIs in process around 4. 8703 CENTRAL AVE $ 225,000 / YR Multiple LOIs at asking price of VACANT VACANT 16
On Market Property Name Address City State Remaining Term NOI Cap Rate Asking Price Sheetz 5615 MacCorkle Ave SE Charleston WV 15.2 $208,000 5.20% $4,000,000.00 Sheetz 800 Delaware Ave Marysville OH 14.3 $204,000 5.35% $3,814,000.00 Sheetz 750 Hebron Rd Heath OH 14.4 $192,000 5.35% $3,589,000.00 Sheetz 800 W Central Ave Springboro OH 15 $208,000 5.35% $3,888,000.00 Sheetz 1014 Yunus Rd Durham NC 14.3 $185,000 5.15% $3,592,000.00 Sheetz 4044 N George St Manchester PA 15 $215,000 5.50% $3,909,091.00 Sheetz E Main St. & E. Pike St Houston PA 15 $228,110 5.20% $4,386,731.00 Sheetz 761 Winchester Pike Canal Winchester OH 14.5 $210,000 5.50% $3,819,000.00 Sheetz 6200 Brookpark Rd Parma OH 15 $200,000 5.40% $3,704,000.00 Sheetz 6020 N Ridge Rd Madison OH 15 $100,275 5.35% $1,874,000.00 Sheetz 133 Botanical Blvd Winchester VA 15 $251,000 5.00% $5,020,000.00 Average Cap 5.30% Sold (24 Months) Property Name Address City State Remaining Term Closing NOI Closing Cap Rate Selling Price Sale Date Days on Market Sheetz 13701 University Blvd Gainesville VA 15 $362,100 5.10% $7,100,000 4/10/2024 102 Sheetz 3208 N. Duke St Durham NC 11.4 $129,996 5.10% $2,550,000 2/23/2024 99 Sheetz 1380 Bethel Rd Columbus OH 15 $207,100 5.45% $3,800,000 1/2/2024 301 Sheetz 7720 Fayetteville Rd Raleigh NC 20 $117,000 4.52% $2,586,000 10/24/2023 139 Sheetz 1109 Northern Blvd Clarks Summit PA 4.5 $195,660 5.59% $3,500,000 7/17/2023 479 Sheetz 14 5th St Ellwood City PA 14.5 $153,000 5.00% $3,060,000 3/22/2023 N/A Sheetz 1870 Rosser Ave Waynesboro VA 15 $189,000 4.60% $4,108,969 12/1/2022 N/A Sheetz 6350 Catlett Rd Bealeton VA 12 $170,000 4.20% $4,050,000 8/25/2022 186 Sheetz 2840 Johnston Rd Columbus OH 15 $164,027 4.85% $3,382,000 8/5/2022 124 Sheetz 6229 E Dublin Granville Rd New Albany OH 15 $214,000 4.50% $4,755,600 3/15/2022 N/A Sheetz 3510 Seminole Trl Charlottesville VA 15 $274,990 5.15% $5,350,000 3/4/2022 N/A Sheetz 815 N 21st St Newark OH 15 $132,000 4.65% $2,849,500 2/10/2022 N/A Average Cap 4.89% Average Days on Mkt 204 COMPS 17
• 4601 Presidents Drive Conversion to Retail Pad Sites • Zoning is IE (Industrial Employment) which allows for conversion to retail pad sites with a restaurant with a drive thru being the highest and best use. • Restaurant with drive thru is permitted in the IE Zone. • Gas Station is subject to special exception approval on the subject property. • Execute on a long-term ground lease with a primary term of 15 or 20 years • Proven trade area with multiple credit Tenants looking for drive thru opportunities in the trade area – Chipotle, Panera, Chick-fil-A & Raising Cane’s to name a few • Other credit users such as Sit-Down Restaurants, Urgent Care, Car Wash, Daycare & Financial Institutions are also actively looking for sites in the trade area - Patient First, Learning Care Group & Auto Spa Express. • Maximize value on the exit with a long-term credit ground lease. • Cap Rate on exit in 5%-6% range • $100,000-150,000 annual ground rent per pad user (assume 3 pad users) CONVERSION -4601 PRESIDENTS DRIVE Martin Luther King Jr Hwy 4601 PRESIDENTS DR RETAIL Coffee Shop Restaurant 4601 PRESIDENTS DRIVE - 55,301 SF 18
CONSTRUCTINGTHE BEST TEAM Our ownership structure, which is collaborative by design, prioritizes constructing the best team to effectively serve our landlord clients. This coupled with our size, enables us to bring grit and agility to each assignment and identify trends for our clients before anyone else. • Proven track record managing change in ownership and handling the process with tenants in large portfolios • Metro East Office Park – Advance Realty transition • Westech/Meadows/Calhoun/Standish – PS Business Park • Ability to perform • Response time and availability • Onsite office – populate the existing Leasing Office • Brokerage Team of 5 to include 3 Principals of KLNB • Finger on the pulse • Our relations/reputation to the Landlord and Brokerage community – see referrals • Seamless transition - • Zero downtime as team is currently executing a similar plan with Ownership team with proven results 35+ Years of experience in the market 19
Paint Branch Pain t Branch I n dian Creek Barn aby R un Henson Creek Oxon Run Brier Ditch Beaverdam Creek Bald Hil l Bran ch Cabi n Branch Co l l i ngton Branch Collington Branch Northeast Branch Cabin Branch Charles B ranch Honey Branch Patux e nt River Be aumon t Rd Lamberton Dr 3rd St NW 4th St NW 3rd St NW 8th St NE 10th St NE Overlook Ave SW 7th St SE 10th St SE Cas t l e Blvd Ga wl ay Dr Van Duse n Rd Sunnysi de Ave 51st Ave River Rd 48th Pl Nicholson St C hapman Rd Cherrywood Ln Co ol Spring Rd 14th St NE 13th St NE Taylor St NE Blaine St NE 12th St NE D St NE 66th Ave 42nd Ave Carters Ln Taylor Rd 11th St SE Naylor Rd SE B St SE C St SE C St SE Ely Pl SE Auth Way Nova Ave F i sher Rd Brinkley Rd Sum merhil l Rd Kingsway Rd Sharon Rd Edm onston Rd Pow d er Mill Rd Rd Cypress St Muirkirk Rd Ellington Dr Cedarbroo k Ln O dell Rd Rive r d ale Rd Soil Conservati o n Rd Springfield Rd Beaver Dam Rd Westbrook Dr Northway Lottsford Rd Medical Center D r Campus Way N Lottsford Vista Rd Finns Ln Alco na St Hill Rd Cooper Ln Seat Pleasant Dr Whitfield Chapel Rd Golf Course Cleary Ln White House Rd Ritchie Ma rlboro Rd Sansbury R d We stphalia Rd New Orchard Dr Auth Rd P a t uxent Rd Conway Rd Chestnu t A ve Sp ringfield Rd Old C hapel Rd Old Chapel Rd P r o s pec t Hill Rd Hillmea de Rd Belair Dr B elair Dr Stonybrook Dr D riscoll Dr Woo Mount Oa k Rd dmore Rd Northv i e w Dr Old Stage Rd J e nnin g s Mill Dr P arkside Dr Bro wn Station Rd L eeland Rd William Beanes Rd Calvert Rd Chew Rd Ma ude Savoy Brown Rd Far m Rd Dairy F a rm Rd Strawberry La k e Way Conway Rd Crofton Pkw y Belair Dr Prince Georges Blvd Sw anson Rd Pi nd ell Rd Slig o Ave H St NE Michigan Ave NE E R and o l ph Rd Fairland R d Cherry Hill Rd Benning Rd NE Hamilton St Sheriff Rd Southern Ave E Capitol St NE Benn ing Rd SE Marion Barr y Ave SE Iverson St Allentow n Rd Livingston Rd Livin g s ton Rd Temp l e Hill Rd Bock Rd Kirby Rd Laurel B o wi e Rd Van Dusen Contee Rd Good Luck Rd Columbia Park Rd Sheriff Rd Marlboro Pike Addison Rd S Suitland Rd Branch Ave R osE Perimeter Rd Collington Rd Church R d Mitchellville Rd Wau gh C hapel Rd Sands Rd Sands Rd Branch Ave SE Suitland Pkwy W Suitland Pkwy Indian Head Hwy U niversity Blvd E Greenbelt Rd Joh n H anson Hwy Pennsylva nia Ave Central Ave Branch Ave S 650 650 414 200 650 201 295 201 450 218 4 5 414 200 295 295 212 206 295 193 201 201 450 450 564 450 214 5 4 223 197 450 193 197 197 564 953 214 450 197 193 193 953 202 202 193 3824 3 450 197 4 50 1 1 1 1 1 1 50 1 50 50 50 301 50 50 301 301 695 295 95 495 95 95 95 95 95 Station Anacostia Naval Base Bolling Air Force Center Laboratory Adelphi Weapons Center Surface U.S. Naval Andrews Joint Base SVU 2 Sligo Creek SVU 1 Sligo Creek Branch SVU 3 Northwest Oxon Run Park Stonecrest NCA SVU 5 Paint Branch SVU 4 Paint Branch Branch SVP Upper Paint Park Park III Stream Valley Paint Branch Valley Park Branch Stream Little Paint SVU 1A Sligo Creek Park I & II Stream Valley Paint Branch Park Stream Valley Sligo Creek Arboretum National Park Marvin Gaye Fort Circle Park Park Stream Valley Anacostia River Park Fort Dupont Parkway Oxon Run Park Stream Valley Barnaby Run Suitland Park Park Stream Valley Tinkers Creek Park Building Birchwood City Park Stream Valley Henson Creek Park Maryland City Park I Patuxent River Longwood Park Skeet Center County Trap & Prince George's Park Stream Valley Folly Branch Enterprise Park Center Community Palmer Park Park Summerfield Regional Park Walker Mill Park Suitland Bog Central Park Westphalia Park Mellwood Hills Hospital Site Glenn Dale Disposal Area Creative Sandy Hill Trail W.B.A. Railroad Park I Stream Valley Western Branch Park Oak Creek West Trail Beach Railroad Chesapeake Facility Maintenance Randall Regional Park Watkins Valley Park Branch Stream Collington Park II Stream Valley Western Branch Park Mellwood Parke Park Stream Valley Charles Branch Center Equestrian Prince George's Patuxent North PRG-Little Odenton Trail WB & A Spur Bike Path Odenton Road Yorktown Park Complex Athletic Green Branch Park Sands Road Landing Park Wooton's Nature Preserve Glendening Site Bassett Historic Compton Course Golf Home Airmens and Soldiers States United Course Golf Maryland of University Course Golf Langston Course Base Golf Air Force Andrews Woodmore Club at Country Golf Club Presidential Lake Golf Club Creek Oak Club Country Crofton Force Base Andrews Air Tipton Airport School Montessori Julia Brown School Blair High Montgomery University Strayer University Howard University Gallaudet School Elementary Westover Park Stream Valley Oxon Run University Howard Community Col Prince Georges University Bowie State School Arundel High SttPkRosaryville NRMA Globe Comm Section C Anacostia Park , National Mall Section F Anacostia Park, Section G Anacostia Park, Section D Anacostia Park, Section E Anacostia Park, Parks National Capital Greenbelt Park Refuge Research Patuxent BURNT MILLS CORNERS FOUR HEIGHTS FOREST HARBOR NATIONAL KONTERRA HILLANDALE PARK RIVERDALE PARK UNIVERSITY HEIGHTS BERWYN RAINIER MOUNT CHEVERLY PLEASANT SEAT HEIGHTS FAIRMOUNT CITY COTTAGE EDMONSTON SILVER HILL CORAL HILLS HEIGHTS CAPITOL PARK MARYLAND HEIGHTS MARLOW HILLS TEMPLE GODDARD LAKE ARBOR WOODLAWN GLENARDEN VILLAGE PEPPERMILL SPRINGDALE HILLS LANDOVER HEIGHTS DISTRICT MORNINGSIDE BASE AIR FORCE ANDREWS MELWOOD ACRES SANDY HILL FAIRWOOD WOODMORE LEELAND VILLAGE MARLBORO BROCK HALL WESTPHALIA STATION BROWN MARLBORO UPPER QUEENLAND QUEENSLAND ESTATES RIVER PATUXENT KNOLLS QUEEN ANNE CORNER KIDWELLS QUEEN ANNE ESTATES QUEEN ANNE MEADOWS MARLBORO HILLS HERITAGE PINDELL DRURY PIG POINT CALVERT MOUNT JACKSONKEMP MILL COLESVILLE WHITE OAK PARK TAKOMA BELTSVILLE FAIRLAND PARK LANGLEY PARK COLLEGE ADELPHI CHILLUM LANDOVER RIVERDALE EAST HEIGHTS HILLCREST SPRINGS CAMP GLASSMANOR LAUREL SOUTH GREENBELT CARROLLTON NEW SEABROOK LARGO WALKER MILL FORESTVILLE MITCHELLVILLE KETTERING BOWIE WASHINGTON 52 49 46 59 50 56 55 51 47 & 48 53 & 54 57 & 58 13 - 15 35 & 36 9 & 10 19 & 20 21 - 23 29 - 34 39 - 45 1 - 6 38 37 28 27 26 25 24 18 17 16 15 14 13 12 11 8 7 OUR TEAM IS HANDLING OVER 2.7 M SF IN PRINCE GEORGE’S COUNTY OUR TEAM HAS COMPLETED OVER 500K SF OF TRASACTIONS IN THE LAST 18 MONTHS PAST DEALS ## # CURRENT DEALS # 20
SUPPORTED BY 21 MARKETING MAYELA LOPEZ SCOTT DIRECTOR OF MARKETING ALLIE HARJU CREATIVE DIRECTOR MACKENZIE WELLS SOCIAL MEDIA MANAGER TINIA MCDONALD EXECUTIVE ASSISTANT JOVONNI BUTLER SENIOR RESEARCH ANALYST CHRIS LEBARTON DIRECTOR OF RESEARCH RESEARCH
22 MARKETING/OUTREACH • Re-branding/logo creation • Creation of website • Social media coverage • Press release • Eblast • CoStar/Loopnet • Door to Door canvasing • Broker function for select brokers • Ongoing dialogue with local brokers and market professionals • Virtual Tours (examples below) • 4000 Garden City • 8400 Corporate Drive • Postcards to marketed audience (examples to right) 12101 Tech Rd Silver Spring, MD 40,200 SF of built out church space available Summer 2022 301.222.0200 KLNB.COM NEW PLACE TO HOLD SERVICE A NEW PLACE TO CALL HOME 12101 Tech Rd Silver Spring, MD MOVE-IN READY SPACE FOR A SCHOOL AVAILABLE SUMMER 2022 301.222.0200 KLNB.COM 29 Cherry Hill Rd VIVA WHITE OAK DEVELOPMENT ORCHARD CENTER WESTECH VILLAGE CORNER MULTIFAMILY DEVELOPMENT WHITE OAK TOWN CENTER DEVELOPMENT 2 1 3 4 O f f i c e / M e d i ca l S u i t e s ava i l a b l e 4,473 - 16,590 SF 301.222.0200 KLNB.COM WESTECH BUSINESS PARK SILVER SPRING, MD 1. Garrett II - 11921 Bournefield Way 2. Garrett III - 11900 Bournefield Way 3. Talbot - 12120 Plum Orchard Dr 4. Harford II - 2301 Broadbirch Dr
INFORMATION SHARING & REPORTING Leases Out DATE TENANT REQUIREMENT DETAILS BROKER TOTAL SF ASSET FLOOR, SPACE 04/10/24 Modification Lead: Ken Fellows CCL Architecture 2,000 - 2,300 SF Type: Office Target Commencement: 09/01/24 Patrick Slagle Colliers - - 2,184 Calhoun Center -7361-Calhoun Center 7361 Calhoun Place Floor 2 Space 0205 Ken Fellows - 04/10/24 Ready for docusign Ken Fellows - 04/03/24 Tenant is reviewing the lease Ken Fellows - 03/25/24 Agreed to terms 04/10/24 New Deal Lead: Robert Pugh Arthritis & Rheumatism Associates, Pc (Inc) Healthcare (General) 15,000 - 20,000 SF Type: Office Target Commencement: 01/01/25 Nicholas Zuppas Gittleson Zuppas Medical Realty [email protected] 301-370-8561 16,081 Calhoun Center -7361-Calhoun Center 7361 Calhoun Place Floor 6 Space 0600 Floor 1 Space 0120 BY SF SPACE TYPE TERM LCD LXD BASE RENT/SF ESCA TI/SF FREE RENT NER/YR LL 16,081 Floor 6 Space 0600 New Deal 132 mo. 01/01/25 12/31/35 1-132: $24.75 13-132: 2.75% - 24 Mo. Gross $26.17 Robert Pugh - 04/10/24 Working on a new plan for the 6th floor. Working call today to scale back on the total project costs. Robert Pugh - 03/27/24 We are basically there with the lease. Met onsite yesterday with the tenant to revisit the raised floor. Unfortunately, the flooring is going to have to be removed and ADA access will have to be addressed. We also need to discuss the overall bigger picture in terms of overall costs. We will look to present the situation regarding costs to the tenant by weeks end. Ken Fellows - 03/25/24 Final comments going out. Also talking about plan 04/09/24 New Deal Lead: Ken Fellows Brown Construction Construction 2,500 - 3,000 SF Type: Office Target Commencement: 07/01/24 - 4,902 Calhoun Center -7361-Calhoun Center 7361 Calhoun Place Floor 6 Space 0640 BY SF SPACE TYPE TERM LCD LXD BASE RENT/SF ESCA TI/SF FREE RENT NER/YR LL 2,451 Floor 6 Space 0640 New Deal 60 mo. 07/01/24 06/30/29 1-60: $25.00 - - - $25.00 April 22, 2024 Page 1 of 13 Proposals DATE TENANT REQUIREMENT DETAILS BROKER TOTAL SF ASSET FLOOR, SPACE 04/10/24 New Deal Lead: Ken Fellows Smolen Emr Ilkovitch Architects Inc Architecture 7,000 - 8,000 SF Type: Office Target Commencement: 01/01/25 - 8,000 Calhoun Center -7361-Calhoun Center 7361 Calhoun Place Floor 2 Space 0295 Floor 3 Space 0300 Ken Fellows - 04/10/24 Followed up and have been told we are on a short list. Keiry Martinez - 03/20/24 Broker claims we are still in the mix. Tenant has been on spring break and will respond when they return. Ken Fellows - 03/13/24 Proposal sent last week for portion of the 3rd floor 04/10/24 Renewal Lead: Ken Fellows White Oak Group Pharmaceuticals 2,400 - 2,500 SF Type: Office Target Price: $25.00 Target Commencement: 06/01/24 - 2,469 Calhoun Center -7361-Calhoun Center 7361 Calhoun Place Floor 6 Space 0670 Ken Fellows - 04/10/24 Received pricing. Ready to draft a proposal. Ken Fellows - 04/03/24 We are waiting on pricing for the spec suite on the 6th floor Ken Fellows - 03/27/24 Tenant is now focused on the 6th floor. They are requesting we build a conf room with glass walls in the corner spec suite April 22, 2024 Page 4 of 13 Legal DATE TENANT REQUIREMENT DETAILS BROKER TOTAL SF ASSET FLOOR, SPACE 04/03/24 Renewal Lead: Ken Fellows C Martinez Mortgage LXD: 10/31/24 Current sf: 4,237 Current Rent: $24.77 5,510 - 5,510 SF Type: Office Target Price: $24.50 Target Commencement: 11/01/24 Todd Shugarman Greenlight - - 11,020 Calhoun Center -7361-Calhoun Center 7361 Calhoun Place Floor 4 Space 0400 BY SF SPACE TYPE TERM LCD LXD BASE RENT/SF ESCA TI/SF FREE RENT NER/YR LL 5,510 Floor 4 Space 0400 Renewal 39 mo. 11/01/24 01/31/28 1-39: $24.50 - - - $24.50 LL 5,510 Floor 4 Space 0400 Renewal 39 mo. 11/01/24 01/31/28 1-39: $24.50 - - 3 Mo. Gross $22.62 BLENDED 39 mo. 11/01/24 01/31/28 $23.56 Ken Fellows - 04/03/24 Preparing an amendment Ken Fellows - 04/03/24 LOI signed by tenant Drafting an amendment Ken Fellows - 03/27/24 Revised proposal for Tenant to downsize to 5510 sf. We will be responsible to demise the space. Leases Executed DATE TENANT REQUIREMENT DETAILS BROKER TOTAL SF ASSET FLOOR, SPACE 03/27/24 Renewal Lead: Ken Fellows Posterity Group, LLC Professional & Commercial Services LXD: 03/31/24 Current sf: 8,512 Current Rent: $25.51 8,512 - 8,512 SF Type: Office Target Commencement: 04/01/24 - 8,512 Calhoun Center -7361-Calhoun Center 7361 Calhoun Place Floor 2 Space 0200 BY SF SPACE TYPE TERM LCD LXD BASE RENT/SF ESCA TI/SF FREE RENT NER/YR LL 8,512 Floor 2 Space 0200 Renewal 6 mo. 04/01/24 09/30/24 1-6: $18,095.09 - - - $25.51 Ken Fellows - 03/13/24 signed Ken Fellows - 03/10/24 Waiting on Docusign info Not sure why there is a delay Ken Fellows - 03/04/24 Docusign going out 02/12/24 New Deal Lead: Keiry Martinez Sun Ease Other Type: Medical office - 987 Calhoun Center -7361-Calhoun Center 7361 Calhoun Place Floor 6 Space 0685 BY SF SPACE TYPE TERM LCD LXD BASE RENT/SF ESCA TI/SF FREE RENT NER/YR LL 987 Floor 6 Space 0685 New Deal 40 mo. 02/01/24 05/31/27 1-40: $25.50 13-40: 3.00% - 4 Mo. Gross $23.88 Keiry Martinez - 02/12/24 Signed Lease. Ken Fellows - 01/30/24 Docusign sent out Keiry Martinez - 01/03/24 Draft lease has gone out. 01/09/24 New Deal Lead: Keiry Martinez Eigennet Other 1,500 SF Type: Office - 1,237 Calhoun Center -7361-Calhoun Center 7361 Calhoun Place Floor 6 Space 0650 April 22, 2024 Page 11 of 13 VTS 23
INFORMATION SHARING & REPORTING QUARTERLY MARKET REPORTS *Market data for this report was sourced from CoStar. JOVONNI BUTLER Senior Research Analyst 703-268-2709 I [email protected] 100 West Road, Suite 505 Baltimore, MD 21204 410-321-0100 2273 Research Blvd., Suite 150 Rockville, MD 20850 301-222-0200 9881 Broken Land Pkwy, Suite 300 Columbia, MD 21046 443-393-3012 naiklnb.com Top Lease Transactions Q1 2024 Top Sale Transactions Q1 2024 ADDRESS BUYER SIZE (SF) BUILDING TYPE PRICE/SF ($) SUBMARKET 2915 Wilmarco Avenue Faropoint 62,376 Warehouse 6.9 M / 111.00 Hyattsville 7150 Standard Drive Distribution By Air 66,590 Warehouse 13 M / 195 .00 Hanover 7121 Dorsey Run Road Alterra Property Group 13,000 (5 acres) Warehouse 5.9 M / 453.85 Route 1 Corridor 2700 Hollins Ferry Road Cabinet ERA-Wholesale Cabinets & Vanities 125,000 Warehouse 12.5 M / 100.00 Baltimore SW ADDRESS TENANT SIZE (SF) BUILDING TYPE TRANSATION TYPE SUBMARKET 1390 Sparrows Point Boulevard University of Maryland System 400,000 Warehouse New Baltimore County East 750 Progress Way Astra Zeneca 198,000 Warehouse New Gaithersburg 400 Old Post Road Pacific Coast Furniture Distributors 175,805 Warehouse New Aberdeen 6695 Business Parkway The AGAM Group, Ltd. 114,980 Warehouse Renewal Route 1 Corridor 5971 Jefferson Station Orcana Biotech 88,867 Warehouse New Frederick For the full article, please click on publication name. In the News Q1 2024 Industrial Market Will Resume Expansion In 2025, Experts Say NAIOP pinpoints 2025 as when the industrial market will start to expand. It estimates that quarterly net absorption of industrial space will average 14 million square feet per quarter over the next two years, or 62.8 and 49.1 million square feet in 2024 and 2025, respectively. This forecast represents a relative “cooling” trend following what had been a protracted period of aboveaverage industrial absorption following COVIDera demand shifts that accelerated the need for distribution space to meet consumers’ increased preference for home delivery. Skyline Technology Solutions Expands In Glen Burnie, MD Skyline Technology Solutions has renewed and expanded its footprint in Aviation Business Park, a three-building, 120,000-square-foot business park in Glen Burnie, Md. The information technology company supports federal, state and local governments, as well as education and commercial sectors. Skyline renewed its 28,753-squarefoot lease for its headquarters at 6956 Aviation Boulevard, and inked a new 16,001-square-foot flex lease at 6958 Aviation Boulevard. St. John Properties owns the property, having acquired what was then an office-only park in 2023 for $13.3 million. Since that time, it has transformed 6958 Aviation Boulevard into an R&D building by adding drive-in doors and expanding the loading areas. Finding New Investment Value In Industrial Outdoor Storage There is substantial pressure on the nation’s commercial parking shortage driven by the booming retail sector, according to a recent report from Marcus & Millichap. Given that online retail sales have surged 85 percent, the number of delivery vehicles in need of these spaces has multiplied well beyond 2019’s truck-to-parking spot ratio when there were 900 light-duty trucks registered per commercial parking spot. This congestion led to a record $95 billion in financial losses in 2021 — and an uptick in demand for industrial outdoor storage facilities. Nowhere is the challenge more pronounced than in the West. Limited truck parking availability there generates the most expensive pricing for IOS sales out of any region in the nation. GlobeSt - March 2024 Commercial Observer - March 2024 GlobeSt - March 2024 Industrial Flex Net Absorption Vacancy 14 15 16 17 18 19 20 21 22 23 24 5M 4M 3M 2M 1M 0 -1M -2M 10% 9% 8% 7% 6% 5% 4% 3% VACANCY RATE NET ABSORPTION (SF) Forecast Net Absorption vs. Vacancy 14 15 16 17 18 19 20 21 22 23 24 3.5M 3M 2.5M 2M 500K 0 -500K -1M 11% 10% 9% 8% 5% 1M 6% 1.5M 7% 4% 3% 2% Net Absorption Vacancy VACANCY RATE NET ABSORPTION (SF) Forecast *Market data for this report was sourced from CoStar. JOVONNI BUTLER Senior Research Analyst 703-268-2709 I [email protected] 100 West Road, Suite 505 Baltimore, MD 21204 410-321-0100 2273 Research Blvd., Suite 150 Rockville, MD 20850 301-222-0200 9881 Broken Land Pkwy, Suite 300 Columbia, MD 21046 443-393-3012 naiklnb.com Top Lease Transactions Q1 2024 Top Sale Transactions Q1 2024 ADDRESS TENANT SIZE (SF) TRANSACTION TYPE COUNTY 20440 Century Boulevard ATCC 10,417 New Lease Montgomery 200 W. Towsontown Boulevard Haven Coworking LLC 11,134 New Lease Baltimore 1300 Piccard Drive Rockville Housing 11,628 New Lease Montgomery 1201 Seven Locks Road Podville Media Holdings 13,730 New Lease Montgomery 6900 Wisconsin Avenue LocalWorks 16,192 New Lease Montgomery 7501-7503 Greenway Center Lumins Health 16,368 New Lease Prince George's 14995 Shady Grove Road Arthirtiis & Rheumatism Associates 18,395 New Lease Montgomery 1545 Progress Way Glenwood Academy, Inc. 20,000 New Lease Carroll 6956 Aviation Boulevard Skyline Technology Solutions 28,753 Renewal Anne Arundel 6514 Meadowridge Road Automated Health Systems, Inc. 36,474 New Lease Howard 8110 Maple Lawn Boulevard Window Nation 50,698 New Lease Baltimore 1800 Washington Boulevard Maryland Department of the Environment 263,473 Renewal Baltimore ADDRESS BUYER SIZE (SF) PRICE / PSF COUNTY 2661 Riva Road Chaney Enterprises 36,688 3,962,500 / 108.81 Anne Arundel 6490-6492 Landover Road Hashem Samii 19,996 1,950,000 / 97.52 Prince George's 11224-11230 Triangle Lane Bobby Athanasakis 18,900 4,200,000 / 222.22 Montgomery 9705 Washington Boulevard N Ganges Property Group LLC 12,624 3,000,000 / 237.64 Howard For the full article, please click on publication name. In the News Q1 2024 Historic Downtown Silver Spring U.S. Post Office Available For Lease The historic U.S. Post Office building at 8412 Georgia Avenue in downtown Silver Spring is being marketed for lease. Located on one of the busiest commuter routes in Maryland, the building has a 5,645-square-foot main level, and a 5,609 lower level basement. The two spaces can be leased together by one tenant, or separately by two tenants. Unleashed by Petco was located in this building for roughly 7 years before closing in 2022. Baltimore Sees Leasing Bump As Battered Office Market Aims For Stability After years of underwhelming performance in the wake of the coronavirus pandemic, Baltimore-area commercial real estate professionals expressed guarded optimism that the office market will finally pull out of its nose dive in 2024. Baltimorearea brokers and researchers said there are signs of renewed momentum in the market, but they stopped short of predicting a significant surge in new deals. 46-Acre Office Complex Hits The Market In Baltimore County A leafy, 46-acre suburban office park has hit the market in receivership as the Northern Baltimore County office market continues to reset postpandemic. Highlands Corporate Park — once the headquarters campus for Integrated Health Services — was listed in late 2023 by Transwestern at the direction of the receiver and so far has attracted a stream of potential buyers despite the struggling office market in Greater Baltimore. East MoCo - January 2024 Bisnow - January 2024 BBJ - January 2024 Greater Baltimore Suburban Maryland Net Absorption Vacancy 19 20 21 22 23 800K 600K 400K 200K 0 -200K -400K -600K -800K 12.5% 12.0% 11.5% 11.0% 10.5% 10.0% 9.5% 9.0% 8.5% VACANCY RATE NET ABSORPTION (SF) Net Absorption vs. Vacancy 19 20 21 22 23 24 800K 600K 400K 200K 0 -200K -400K -600K -800K -1M 19% 18% 17% 16% 15% 14% 13% 12% 11% 10% Forecast Net Absorption Vacancy VACANCY RATE NET ABSORPTION (SF) Maryland Q1 2024 Industrial Report *Market data for this report was sourced from CoStar. 100 West Road, Suite 505 Baltimore, MD 21204 410-321-0100 2273 Research Blvd., Suite 150 Rockville, MD 20850 301-222-0200 9881 Broken Land Pkwy, Suite 300 Columbia, MD 21046 443-393-3012 naiklnb.com Industrial In the first quarter of 2024, the Maryland Industrial sector saw a continuation of trends that started to materialize in the second half of 2023: increased sublease inventory, cooling of activity in the bulk sector, more sustainable levels of rent growth in comparison to the unprecedented covid boom, and growth of rental inventory despite construction levels remaining flat. These macro trends have continued to shift some semblance of leverage back to tenants, which was almost nonexistent prior to 2023. While requirements over 100k sf have been less plentiful, demand has remained steady among small/medium-sized tenants looking to take advantage of increased supply. Amid this period of rebalancing in the market, the devastating news of the Francis Scott Key Bridge collapse on March 26 has introduced an unexpected shockwave throughout the industrial sector given its reliance on the Port of Baltimore. While a lot of companies in Maryland and the mid-Atlantic region have been scrambling to figure out how to deal with the logistical challenge in the near term, the hope is that the channel can be cleared in a timely fashion to resume flow of inventory and avoid a more permanent diversion to other ports along the Eastern seaboard. The ability to handle neo-Panamax ships and a centralized location with proximity to major trucking routes has made Baltimore one of the top ports nationally, especially for the movement of automobiles, steel, coal, gypsum, sugar, and grain. Time will tell regarding the levels of the economic impact and government aid, but there is hope that this will be an undeniably unfortunate catalyst for an even more capable, robust port post-reconstruction. FlexDemand in the Maryland Flex sector remained steady to start the year despite the continued challenge of high construction costs. We are hopeful that a more favorable lending environment as we progress through the year will increase activity of larger requirements with more substantial buildouts, specifically in the biotech sector. Landlords continue to reduce office ratios in their flex assets as they have turnover to take advantage of the more active prospect-type, which tends to be more warehouse-centric. Typical demand drivers in the Baltimore/Washington corridor aren’t going anywhere and deal flow should remain strong throughout 2024 despite the high cost of relocation. Maryland Industrial Market Greater Baltimore NET ABSORPTION VACANCY RATE CONSTRUCTION ASKING RATES MARKET INVENTORY Suburban Maryland NET ABSORPTION CONSTRUCTION ASKING RATES MARKET INVENTORY VACANCY RATE COUNTIES # O F BUILDINGS TOTAL INVENTORY (SF) V A C A N C Y RATE (%) NET ABSORPTION (SF) N N N A S K I N G RENT ($) U N D E R C O N S T R U C T I O N (SF) FLEX Anne Arundel County 366 12,785,528 5.70 23,347 14.58 165,560 Baltimore City 241 5,856,073 6.70 -10,924 11.60 0 Baltimore County 521 18,026,857 6.30 39,422 13.17 0 Harford County 152 2,906,275 6.10 -13,186 11.48 0 Howard County 220 11,329,128 3.50 24,763 15.27 0 Carroll County 90 2,074,065 5.50 -11,411 10.14 0 TOTAL 1,590 52,977,926 6.13 52,011 13.71 165,560 Frederick County 202 7,678,517 11.00 -123,264 14.47 55,002 Montgomery County 299 13,715,981 7.60 17,158 23.85 871,000 Prince George's County 250 8,950,930 4.80 9,993 13.95 23,520 TOTAL 751 30,345,428 7.60 -96,113 17.42 949,522 COUNTIES # O F BUILDINGS TOTAL INVENTORY (SF) V A C A N C Y RATE (%) NET ABSORPTION (SF) N N N A S K I N G RENT ($) U N D E R C O N S T R U C T I O N (SF) INDUSTRIAL Anne Arundel County 506 26,275,516 6.10 -285,280 12.62 773,000 Baltimore City 1,452 55,001,516 6.00 237,219 9.20 0 Baltimore County 792 54,063,256 7.70 -158,686 10.34 678,100 Harford County 295 28,553,858 5.20 79,533 10.03 564,900 Howard County 444 34,812,015 6.50 -892,431 13.34 0 Carroll County 224 9,514,026 0.70 -14,731 8.61 8000 TOTAL 3,713 208,220,187 6.10 -1,034,376 10.69 2,024,000 Frederick County 439 17,179,254 6.90 106,118 13.21 179,919 Montgomery County 658 15,817,629 5.50 -15,894 15.60 0 Prince George's County 1,557 55,331,755 4.30 -177,992 13.25 1,900,000 TOTAL 2,654 88,328,638 6.00 -87,768 13.72 2,079,919 Trends for Q1 2024 Baltimore Q1 2024 Office Report *Market data for this report was sourced from CoStar. 100 West Road, Suite 505 Baltimore, MD 21204 410-321-0100 2273 Research Blvd., Suite 150 Rockville, MD 20850 301-222-0200 9881 Broken Land Pkwy, Suite 300 Columbia, MD 21046 443-393-3012 naiklnb.com In the first quarter of 2024, the vacancy rates in the Greater Baltimore and Suburban Maryland markets have demonstrated distinct trends. Notably, while the Greater Baltimore market experienced a positive absorption of 54,432 square feet, the Suburban Maryland market witnessed a negative absorption exceeding 500,000 square feet. Factors such as construction costs for tenant buildout and elevated interest rates continue to pose challenges for landlords, particularly in facilitating short-term lease agreements requiring minimal improvements. This trend has persisted for the past two years, although businesses are now increasingly solidifying their future plans regarding office space. However, caution remains prevalent among tenants, particularly in committing to long-term leases, contingent upon industry dynamics. Despite this, there has been an uptick in tenant readiness to commit compared to 2023, attributed in part to a growing fatigue with remote work and a shifting towards hybrid work models. Noteworthy segments of the market include medical tenants with public/state support, who exhibit a greater inclination towards signing longer leases, alongside the education sector. The largest lease renewal observed was a notable 263,473 square feet in Baltimore City, attributed to the Maryland Department of the Environment. In the context of a competitive labor market, tenants are increasingly prioritizing locations that facilitate employee attraction and retention. Consequently, there is a discernible trend of businesses relocating from urban areas to the Greater Baltimore suburbs, where proximity to retail amenities is advantageous. Notable lease signings exceeding 30,000 square feet throughout the BW corridor underscore the strength of this area situated between Baltimore and Washington, in contrast to the inner city. Baltimore Office Market COUNTIES # OF BUILDINGS TOTAL INVENTORY (SF) VACANCY RATE (%) NET ABSORPTION (SF) GROSS ASKING RENT ($) UNDER CONSTRUCTION (SF) GREATER BALTIMORE Anne Arundel County 1,158 24,010,411 7.10 17,440 26.81 260,000 Baltimore City 1,835 53,870,547 13.00 143,817 24.64 165,220 Baltimore County 2,006 41,643,645 11.60 -79,815 22.76 5,000 Carroll County 319 2,663,501 7.80 -4,766 22.13 0 Harford County 638 5,867,444 12.90 31,140 24.55 0 Howard County 545 19,988,839 14.60 -53,384 25.08 0 GREATER BALTIMORE TOTAL 6,501 148,044,387 11.17 54,432 24.33 430,220 SUBURBAN MARYLAND Frederick County 703 9,654,645 16.30 -288,924 24.01 53,138 Montgomery County 1,521 76,595,988 17.30 -238,030 32.19 236,500 Prince George's County 1,178 28,705,968 16.00 -42,121 24.47 60,000 SUBURBAN MARYLAND TOTAL 3,402 114,956,601 16.53 -569,075 26.89 349,638 NET ABSORPTION Greater Baltimore Suburban Maryland NET ABSORPTION VACANCY RATE CONSTRUCTION ASKING RATES MARKET INVENTORY MARKET INVENTORY VACANCY RATE CONSTRUCTION ASKING RATES Trends for Q1 2024 BI-WEEKLEY CLIENT MEETINGS Vacant 4% | 1.9K M2M 0% | 0 2024 17% | 8.4K 2025 10% | 4.9K 2026 20% | 9.6K 2027 10% | 5.1K 2028 8% | 3.7K 2029 0% | 0 2030֡ 31% | 15K Available 4% | 1.9K 04/22/24 Roof 16,331 sf 3 16,331 sf AZIYO BIOLOGICS, INC 0300 2,020sf| LXD 05/31/24| BR $26.50 THE NATIONAL CENTER FOR CHILD 0302 2,437sf| LXD 04/30/30 | BR $24.95 THE NATIONAL CENTE… 0304 1,493 | 04/20/30 | $24.95 THE NATIONAL CENTER FOR CHI… 0310 1,989sf| LXD 04/30/30 | BR $24.95 AHRP INC 0320 1,114| 06/30/27 | $25.2 Edelman Financial Services, LLC 0350 3,748sf| LXD 12/31/28 | BR $25.00 Vacant 0360 1,889 Aziyo Biologics, Inc. 0370 3,032sf| LXD 05/31/24| BR $26.50 2 16,331 sf THRIVE BEHAVORIAL HEALTH, LLC 0200 7,356sf| LXD 05/31/31 | BR $26.00 Randeep Sidhu … 0220 2,657 | 03/31/26 | $36.37 Dr. Leonard … 0250 2,333 | 06/30/25 | $27.2 THE DOCT… 0260 1,499 | 06/30/26 | $22.1 T… | LCD 07/01/26 Carmen Prat… 0275 1,806 | 02/28/27 | $25.9 USA՞Halal C… 0280 2,235 | 07/31/24| $23.0 1 16,331 sf Heymann Realty, LLC & Avalon Settlements 0100 2,797sf| LXD 01/31/26 | BR $25.49 Physiotherapy Associates, Inc. 0120 2,220sf| LXD 07/31/27 | BR $26.14 Argor Business Solutions … 0140 1,513 | 12/31/25 | $20.88 L. EDWARD O'H… 0150 1,129 | 12/31/24| $24.76 Delta Analytical Corporation 0160 1,999sf| LXD 01/31/33 | BR $26.65 Mike and Barrys Deli, I… 0170 1,062 | 05/31/25 | $14.12 Destiny Management Services LLC 0180 1,879sf| LXD 09/30/26 | BR $24.50 Brosnan Risk … 0185 786 | 06/30/26 | $26.27 Meadows Corp Park I 12510 Prosperity Drive 24
INFORMATION SHARING & REPORTING Suite 215- 1,432 SF E-Infosol LXD:05/25 2nd Floor Suite 220- 2,474 SF Metropolitan Practice LXD: 02/28 Suite 210- 1,432 SF Denobile Law LXD: 10/26 Suite 205- 2,184 SF VACANT Suite 200- 8,512 SF Prosperity Group, LLC LXD: 03/24 Suite 295- 8,261 SF VACANT Suite 250- 9,809 SF Dealeron LXD: 02/28 Suite 225- 2,708 SF Hirschel LXD:12/27 Suite 120- 4,874 SF VACANT 1ST Floor Suite 150- 6,726 SF Telaforce LLC LXD: 08/24 Qtech Suite 102- 6,098 SF LXD: 11/28 Suite 140- 2,602 SF Cardinia LXD: 06/26 Suite 160- 591 SF Cardinia LXD: 06/30/24 Building Amenities Suite 100- 5,623 SF Ameritel Communications LXD:10/29 ACCURATE FLOOR PLANS 25
CASE STUDY METRO EAST • Represented Seller on three building portfolio sale to Polinger Company in 2016. • Immediately spun out and sold 20,000 sf one story building (8300 ) to user/investor. • 12 months later sold a fully leased 10,000 sf one story building (8200) to an investor • Still maintain listing on 8400 Corporate Drive today • Successfully leased 98% of the building in an 18-month period for Advance Realty Group to excellent credit tenants • Advance Realty sold the building in 2011 for what was then the highest price paid for an office building in Prince George’s county ($169 per sf) • KLNB Capital Markets Client purchased the building in 2021 from Persimmon Capital. • We secured the listing and have since leased 20,000 sf to bring the building back to 93% leased M E T R O E A S T B U S I N E S S P A R K 8 2 0 0 - 8 3 0 0 - 8 4 0 0 C O R P O R AT E D R I V E - N EW CA R R O L LTO N M D WINTHROP INVESTMENT GROUP 8301 PROFESSIONAL PLACE N EW CA R R O LTO N M D 26
• Portfolio • 2 Single Story office/medical buildings • 2 Mid-rise office buildings • 8100 Professional Place- secured long term lease with WMATA (Washington Metropolitan Area Transit Authority) • $28.00 FS Rate • 8200 Professional Place • Currently working on 2 transactions • 16k SF in total • Longer term leases (10 + years) • $27.50 FS rate • CAP Tenant Improvement • 8300 Professional Place • 60,860 SF • Secured long-term lease CASE STUDY METRO EAST BRISTOL CAPITAL (2016) 8100 - 8300 PROFESSIONAL PLACE 27
• KLNB was hired by DSC Partners in 2019 • Portfolio • 9 Single Story office/flex buildings • 3 Mid-rise office buildings • Over 55K SF leased to Montgomery College. • A total of 7 office/flex buildings were sold from the portfolio. • 26K SF Sold to an owner-use (Darcars in 2022) • 6 Buildings totaling 250,588 SF sold to an investor (ESJ Partners) • Our team retained the leasing for all 6 buildings and have been able to complete transactions at high rates. • Rates were increased from $15 NNN to $21 NNN (within 18 months) CASE STUDY NORTH SILVER SPRING W E S T E C H B U S I N E S S P A R K & MEADOWS CORPORATE PARK 28
CASE STUDY ROCKVILLE • KLNB was hired to lease a two-building portfolio totaling 337,000 sf • As the seller (DSC Partners) put 15400 under contract to a developer, KLNB relocated several tenants over to 7361 Calhoun. • One building (18,810 SF) is currently under contract to an owner user • Four Buildings are currently under contract with a developer • Negotiating a lease with a long-term,16K SF tenant • Our team continues to push rates on renewals and new deals 7361 CALHOUN & 15400 CALHOUN METRO PARK NORTH - 443K SF (OFFICE & FLEX PORTFOLIO) 29
STRONG RELATIONSHIPS WITH BROKERS & LANDLORDS Michael Alcamo Direct: (301) 754-6172 | Cell: (410) 227-2871 [email protected] LOCAL BROKERS LANDLORDS Michael Gillman T 301 215-4138 | C 301 537-8402 [email protected] Marc Solomon Office - 301-915-9460 C 3019104300 [email protected] Dave Sislen (301) 442-6099 [email protected] John Gordon O 3019689161 C 2405084606 [email protected] Adam Schindler Direct: +1 202.534.3604 | Mobile: +1 301.787.0845 [email protected] Niel Beggy O +1 301 215 4105 | C +1 301 254 4105 [email protected] Brandon Copeland Direct: +1 202 261 2239| Mobile: +1 240 449 9668 [email protected] Susan Kay direct 202.925.4599 mobile 301.674.2387 [email protected] Bill Singer O 3016567790 c 2407931961 [email protected] Larry Diamond O 3019471770 c 3013991108 [email protected] Alan Lederman Cell: 301-370-0968 [email protected] Austin Herndon 2023636301 2022628053 [email protected] 30
Our clients rely on us for our nuanced understanding of market dynamics and delivering uniquely lucrative real estate strategies. We listen, we advise, and we deliver honest perspective. If a decision is not in the best interest of our clients, it’s not in ours. BUILDING TRUST WITH EVERY TRANSACTION. klnb.com