Maryland Aims To Spur Office Demand With New Tech Hub Between D.C. And Baltimore

Columbia, Maryland, a suburb with millions of square feet of office space roughly halfway between Baltimore and Washington, D.C., is being eyed by local officials as a new hot spot for tech companies to grow.

Last month, the Baltimore region was designated as a federal tech hub by the Biden administration, putting it in line to receive a portion of $10B in government funding aimed at creating new epicenters for various technological fields outside of the country’s leading tech markets.

The region — defined as Baltimore City and seven surrounding counties, including Howard County, which encompasses Columbia — was eyed as a hub for artificial intelligence and biotech.

The designation is critical for Downtown Columbia, a 391-acre mixed-use development led by Howard Hughes that has 1.8M SF of office space with another 3.5M SF planned.

Earlier this month, Maryland Technology Development Corp — or TEDCO, a state agency that supports tech companies — announced it would move its headquarters to a 9K SF space in Downtown Columbia’s Merriweather District.

“It's truly a defining moment for our region,” Howard Hughes Maryland President Kristi Smith, said at Bisnow’s Rise of Downtown Columbia event, held at 10440 Little Patuxent Parkway in the Merriweather District.  

“This announcement signals that our region will continue as a leader in emerging biotechnology and artificial intelligence,” Smith added. “The tech hub designation, along with our latest announcement this morning that TEDCO is joining us in Downtown Columbia, further cements the commitment we have to the ecosystem here.”

Several private and public sector leaders speaking at the event, including Gov. Wes Moore, pointed to these two recent milestones as signs that Columbia is poised to benefit from a growing tech sector. 

The market could use the boost. As of last quarter, Columbia’s 12.9M SF of office inventory had a 17.8% vacancy rate, according to CBRE. That is below the 20%-plus rates in nearby D.C. and Baltimore, but it still leaves the jurisdiction with roughly 2.3M SF of empty space amid a volatile time for the office sector. 

Some of that vacancy is at Columbia Gateway, a sprawling business park that Howard County Economic Development Authority CEO Jennifer Jones pointed to as a potential beneficiary of the region’s tech hub designation. Columbia Gateway and the adjacent Gateway Commerce Center total 920 acres and over 8M SF of commercial space, according to HCEDA's website.

“It opens up an opportunity for us in terms of real estate because we all know that the office market, maybe Class-B and Class-C isn't occupied like the Class-A space,” Jones said. “For instance, there’s Columbia Gateway, there's a lot of office space there. This [designation] could be an opportunity to work with a lot of the cyber and AI companies there, work with some excess space there to look at things like expanding an innovation hub.”

The tech hub program creates this opportunity by opening up a new funding source for local tech companies that otherwise have had a harder time raising capital than their peers in the largest U.S. tech markets.

“There are other regions in the country that have a venture capital system, they have access to other funding, but this region doesn't really have that,” Jones said. “So this does give us a funding stream where we can be on par with other regions.”

Moore said he is using the tech hub designation — along with another recent milestone, the selection of Greenbelt in Prince George's County for a new FBI headquarters — as selling points when trying to convince companies from across the country to relocate to Maryland.

“I am very clear to my other governor partners, many of whom I think are wonderful, many of whom are good people, I want to be very clear that every time I go to one of their states, I'm bringing three businesses back with me. Unapologetically,” Moore said. “And we're doing a pretty good job so far of it. Because it's our time.”

TEDCO, which is relocating to Downtown Columbia from Columbia Gateway, chose to make the move because of the amenities that the mixed-use development offers, CEO Troy LeMaile-Stovall said. 

“This community, this vibrancy that you see here and the ability for folks to come together, that's why we chose to come here,” he said. “We wanted a place where people are coming to. Where we were, you had to know to go there. But this is a place where people are already coming to, and to build that community of entrepreneurship, I just see it as even growing more around technology and innovation.”

LeMaile-Stovall, whose agency helps grow tech companies in Maryland, said the Baltimore area's designation as a federal tech hub will benefit the entire region. 

"It will allow us to get in line for the next round of funding," he said. "It will allow the Baltimore region to have preference for other programs that come along. And so the first one that we're going after right now is about a $70M of planning opportunity. And we've got to start thinking, again, just as we did collectively, about what of those things around AI around life sciences that we want to go after and become known for."

The heads of two businesses that occupy office space in Downtown Columbia say they were also drawn to its mixed-use environment and think more companies will follow suit. 

Evergreen Advisors LLC CEO Rick Kohr, whose firm had been based on Bendix Road in Columbia since its 2000 founding, had considered relocating to the Baltimore Peninsula development. But it ultimately decided to move to Downtown Columbia with an 11K SF lease. 

Evergreen, which does capital raising and merger and acquisition work for tech companies, has clients in D.C. and Baltimore, so Kohr said the location between the two was ideal. And he said the nearby restaurants and the view from the office's 12th-floor space help recruit talent. 

Kohr said he thinks more companies will be drawn to Downtown Columbia, especially after the TEDCO announcement.

"TEDCO coming into Downtown Columbia is not an unimportant fact," he said. "You look around, there's just a lot of companies, the Tenables and the Harkins and Medstars. Great companies that are growing and providing capital to the to the region and whatnot, it's great to have that in the in the downtown area."

Prescott HR founder and President Kimberly Prescott said she had previously been working remotely, bouncing between coffee shops, but she decided at the end of 2020 she wanted to open an office. 

"I'm so active in Howard County, I decided that Columbia was where I needed to be, and Downtown Columbia was where I needed to be," she said. "So it was really where I focused my efforts. And when I found my space, I knew it was perfect, because I can sit outside and hear concerts and I can walk over and visit all of my friends across the street, and just have easy access to everything."