March 29th - April 12th, 2013

Maryland Sees Slight Dip in Commercial Real Estate Lending

4/1/2013, Baltimore Business Journal, Gary Haber Commercial real estate lending in Maryland fell slightly in 2012, according to a report by SNL Financial. Loans for projects such as office buildings, stores and hotels fell by 0.15 percent last year, said SNL, which looked at commercial banks headquartered in each state whose commercial real estate lending accounts for at least 10 percent of their loans. One good sign for the banking industry is that the delinquency rate for commercial real estate loans fell to 4.29 percent as of Dec. 31, the lowest level in five years. The delinquency rate was 3.1 percent at the end of 2007. Click here for more...

Like Employment, Demand for Office Space Improves

4/2/2013, Reuters, Ilaina Jonas The office vacancy rate fell only slightly during the first quarter, as a lack of significant job growth continued to impede demand for space, according to a quarterly report released on Tuesday. At the same time, U.S. office construction during the first quarter reached a 14-year low as developers remain spooked by soft demand and meager rent growth, according to real estate research firm Reis Inc. Persistent lackluster U.S. job growth was behind the 0.1 percentage point U.S. office vacancy rate decline. Demand for office space hinges on hiring workers to fill it. Although hiring in February reached 236,000, that level has not yet been consistent enough to convince employers to commit to leasing more space. In areas where the growing technology and energy industries are dominant employers, rents are increasing much faster than the national average. Much of the vacancy decline can be attributed to a lack of new supply and not a strengthening of demand for space. Click here for more...

Say Goodbye to the Office Cubicle

4/2/2013, The Wall Street Journal via Yahoo! Finance, Ben Kesling As the nation's economy recovers, office-furniture makers, who were hit hard by the recession, are racking up sales by persuading companies that newer office layouts can encourage collaboration and, in some cases, shrink their space requirements and costs. Postcubicle offices began to crop up in earnest about a decade ago, inspired by changes in the way people worked. They feature lower walls between desks, or even no walls, and more areas designed

for conversation, to encourage impromptu problem-solving sessions. At the time, private offices were a symbol of rank and privilege. But the new partitions, some of them six feet tall, could be arranged to provide similar privacy for rank-and-file workers, who had largely labored in open areas called "bullpens," with their desks placed in rows. In the decades that followed, cubicles became ubiquitous. In recent years, as electronic communications supplanted paper and flat-screen monitors and laptops replaced unwieldy desktops, businesses found that workers were left with unused space. Some of them also were feeling isolated. Click here for more...

Service Sector Growth Weakest in Seven Months: ISM

4/3/2013, Reuters via CNBC The pace of growth in the vast U.S. services sector slowed in March to the lowest level in seven months as new orders and employment measures pulled back, an industry report showed on Wednesday. The Institute for Supply Management said its services index fell to 54.4 last month from 56 in February, falling short of economists' forecasts for 55.8. It was the weakest reading since August. The forward-looking new orders index slipped to 54.6 from 58.2, while employment dropped to its lowest level since November at 53.3 from 57.2. Click here for more...

Tech, Energy Add Pop to Commercial Real Estate Rise

4/4/2013, Investor's Business Daily, Jason Ma Growth in the technology and energy industries is adding extra pop to the commercial real estate rebound in the biggest U.S. cities as well as smaller ones. Meantime, tech and energy companies aren't just driving sales of real estate for server farms and drilling. Their activity boosts demand for multifamily housing, warehouses and offices as well. More funds are available for deal making too. In search of higher yields, institutional investors are pouring money into top commercial properties. Pension funds and overseas sovereign wealth funds are also piling in, real estate investment trusts are raising record amounts of capital, and commercial mortgage-backed securities are recovering.Click here for more...

U.S. Construction Employment Hits Three-Year High, but Worries Remain

4/8/2013, Baltimore Business Journal, Damon Scott The number of construction jobs in the U.S. rose for the 10th straight month as companies added about 18,000 employees in March, surpassing the 5.8 million mark for the first time since late 2009. The unemployment rate for the industry now sits at 14.7 percent, its lowest since 2008. Part of the decline in the unemployment rate was due to more than 1.5 million in the industry leaving to take other jobs, retiring or stepping out of the workforce, Associated General Contractors of America Chief Economist Ken Simonson noted. Most categories of construction employment experienced a jolt, while infrastructure hiring lagged, according to the AGC's latest analysis of government data. Officials cautioned that layoffs could occur unless policymakers in Washington, D.C., boost infrastructure investment and allow importation of

needed workers as part of immigration reform. Click here for more...

Lots of Federal Property to Sell, but It's Not That Easy

4/9/2013, The New York Times, Eugene L. Meyer As government agencies are forced to do more with less, the General Services Administration has stepped up its efforts to dispose of surplus government buildings across the country in new and more profitable ways, instead of simply auctioning them off. The federal government owns about 14,000 excess buildings and other structures, and the G.S.A. is working to dispose of them. Before a federal property can be offered for sale, several hurdles must be cleared. One major constraint is a requirement that federal, state and local government agencies must first be given the opportunity to acquire it. Then, under the 1987 McKinney-Vento Act, the property must also be made available to shelter the homeless. In addition, federal environmental and historic preservation reviews are required. Only then can properties be sold to private entities. Click here for more...

Obama Budget Would Have Big Impact in Md.

4/10/2013, The Baltimore Sun, John Fritze Labor unions representing federal employees reacted angrily to the $3.8 trillion budget unveiled Wednesday by President Barack Obama, who proposed trimming $20 billion from federal retirement benefits - reopening a debate many Democrats felt had been resolved last year. The 2014 spending plan - which arrived months late - would reduce annual budget deficits by an additional $1 trillion over a decade, according to the administration's estimates; raise the federal minimum wage to $9; curb Social Security spending; increase the federal cigarette tax and close tax loopholes the Obama administration has pursued for years without success. For Maryland, the proposal would increase the administrative budget at Woodlawn-based Social Security by 7 percent to $12.3 billion to improve enforcement of disability eligibility requirements - an effort the White House said would ultimately save money. And the administration repeated calls for a 1 percent pay increase for the federal workforce. Click here for more...

Maryland Small Business Owners Tell Congress to Reform Taxes

4/11/2013, Cecil Daily, Nicole Macon WASHINGTON - Two Maryland business owners pushed their tax reform proposals to help companies succeed and plan for the future at a House Committee on Small Business hearing Wednesday. Small businesses are affected more by the country's tax code than larger companies because they pay 67 percent more to comply with the tax code, according to a study by the Small Business Administration's Office of Advocacy. Some of the tax reform proposals that the Small Business Administration is considering include making the Section 179 Equipment Deduction permanent; expanding cash accounting; changing filing dates for S corporations, partnerships and corporations; and changing requirements for partnerships and corporations. Click here for more... Click here to download a printable version

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This newsletter is a summary of articles related to commercial real estate finance news in the Baltimore/Washington market, collected from local publications as noted above. Should you require specific information, please refer to the publication source or call one of our professionals at 410.821.8585. All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon.