With a historic downtown area and a constantly increasing population of both residents and tourists, there has never been a better time for Frederick commercial real estate.
- 39% of Frederick County’s population age 25 and older have a bachelor’s degree or higher, the 3rd highest among counties in Maryland.
- Maryland boasts the highest percentage in the country of technical and professional workers in the workplace (28%). Professional and business employment dominates Frederick County’s workforce.
- Frederick has more than 9,000 businesses, with 124,000 potential hires needed to fill positions in those businesses
On top of that, Frederick is hailed as one of the best places to live by publications like Livability.com, making it appealing as an office location.
At AushCo, we’ve owned, developed, constructed, leased, and sold Frederick commercial real estate for years. We understand the process, nuances, challenges, and victories that come with commercial real estate ownership, and we apply that knowledge so that our clients make the best decisions.
If you’re looking for commercial real estate services in Frederick, let’s talk.
If you’re looking to learn more about commercial real estate in Frederick, check out our resources below.
We walk through the entire process of commercial real estate – from market analysis through purchase and management all the way to divestment.
- The Current State of the Frederick Commercial Real Estate Market
- Frederick’s Top Areas for Commercial Property
- What Should You Look for in Frederick Commercial Real Estate?
- How to Finance Investment in Commercial Property
- How to Hold and Manage Frederick Commercial Property
- How to Sell Frederick Commercial Property
- How Long Does It Take to Sell Commercial Property in Frederick?
- Final Tips
- How to Get Started with Commercial Real Estate in Frederick
Ready? Let’s dive in.
The Current State of the Frederick Commercial Real Estate Market
As we’ve seen, Frederick is a thriving market for commercial real estate. And it’s poised for continued growth.
As more and more people who work in Washington, DC, and Montgomery County move to Frederick, more commercial real estate will be built and sold. The housing market is a leading indicator, and the growth there is substantial; take a drive around the city, and you’ll see new construction on townhomes, houses, and apartment complexes in nearly all corners.
New residential developments include:
- Additions to the Urbana Villages on the I-270 corridor.
- New home sites near Oakdale High School and Lake Linganore
- Apartment and home sites along East Church
- New construction along 340 West in the Ballenger Creek area
- New development along Route 26 and Clemson Corner
- Renewed construction along the Golden Mile
- Gambrill View home sites off of Shookstown Road
And more (with more slated to begin construction).
Again, the boom in residential development is a leading indicator that commercial development and commercial property values in Frederick are poised to follow (and they’re already following). The growth is ubiquitous — impacting North Frederick, South Frederick, East Frederick, and West Frederick — which is a strong indicator that commercial growth will be ubiquitous, as well.
For more discussion on the current state of the Frederick commercial real estate market, listen to the Frederick Advice Givers podcast episode featuring Blackwolf’s Justin Ausherman.
Frederick’s Top Areas for Commercial Property
While growth in Frederick has been nearly ubiquitous, there are focus areas that Frederick commercial real estate stakeholders would do well to consider when evaluating property. These include:
Thomas Johnson Drive
Thomas Johnson Drive is known for having business and physicians’ offices up and down the stretch of road. From specialized physicians’ offices, such as dentists, sports medicine, cosmetic surgery, women’s health, pediatrics, and more, to banks, spas, and restaurants, there’s a little bit of everything here – but the focus is on commercial medical space.
The Westview Area
Just off of I-270, the Westview area of Frederick continues to grow at a rapid pace, with new housing being built in several locations. Westview also has many shops, restaurants, and grocery stores within the area.
Running through the Westview area is Corporate Drive, which goes past Giant grocery store and several restaurants. A nice piece of commercial real estate here is the Westview Overlook, which is a 5.14-acre site located in the Westview Office Park. It offers Class A office buildings that are designed to easily accommodate tenants’ needs as small as 2,500 square feet.
This is an area with great potential for many commercial uses.
Located less than a mile from Ft. Detrick, and near ample stores and restaurants, Key Parkway also offers opportunity for a variety of commercial uses. The Keypark Center, for example houses Class A offices.
Georgia Pacific Boulevard
This area is ideal for warehouse and office space. Slightly removed from the most crowded areas of the city, commercial property in this area tends to be spacious, affordable, and equipped for multiple use.
The McKinney Business Center, for example, is set up to handle research and development, production, manufacturing, as well as supporting office, flex, warehouse, and industrial uses.
What Should You Look for in Frederick Commercial Real Estate?
By this point, we’ve established that the commercial real estate market in Frederick is thriving. So, what should you look for as you consider Frederick properties?
The specifics to that answer will, of course, depend upon your situation. But here are a few general guidelines for maximizing value in the city:
Look for a Well-Suited Location (Location, Location)
You can’t write a commercial real estate guide without including the age-old axiom. Location is the primary consideration. Always.
Frederick is a diverse city with industrial and medical parks, a corporate campus here and there, and, of course, the downtown full of thriving shops and various small businesses. Where you choose to buy a building will vary greatly based on what you’re looking for. Just as you wouldn’t put an industrial property in downtown, you also wouldn’t pick out a medical park as the perfect spot to build a small shop.
Location also plays into your budget. Historic downtown buildings are prime real estate for stores and small businesses; they will come at a premium.
And pay attention to zoning laws. Frederick commercial real estate is subject to a strict set of regulations that enforce where businesses can operate.
Analyze the Building’s History
Frederick is teeming with historic properties. Even properties outside of downtown often have histories.
Analyze the past for insight into the future. How much has it rented for in the past? What maintenance needs has it required? How often is it vacant?
Be wary of buildings that have been vacant for long periods of time. While you will get one for a lower price, it may not be in the optimal location and you could have a hard time filling it. If you work with a broker who knows Frederick commercial real estate, you’ll have an experienced voice of reason helping you figure out what’s worth it and what isn’t.
If you’re planning to own and rent the building, ensure that buildings nearby are of good quality, too. You don’t want to have the only nice building on the block, or you’ll find that your rates are lower due to your surrounding area.
Analyze the Area’s Demographics
This could fall under “location,” but we’ve broken it out to elaborate on its importance: the demographics of the area near your building can have a big impact on the success of your new venture.
If your new building is housing your business or the businesses of others, you’ll need a good source of talent. Dig into the demographics of your area to see how many people nearby have the skills you require. Is the surrounding area mostly college-educated? Of the right age? Are they ambitious and young or nearing retirement? If the clientele will be local, is there enough an audience to sustain the business?
Examine the Building’s Utilities
How much does it cost to run and maintain your building?
Older buildings can cost a fortune in maintenance and energy efficiency. A drafty industrial property that hasn’t been updated since the 90s will need significant upgrades to cut down on energy costs. However, while you may spend more up front, a newer building that has had recent updates to its HVAC, electric, and water systems will cost you less in monthly maintenance.
Frederick has a long history of manufacturing properties that are currently being repurposed into shops or offices for local businesses. This could be an interesting route for you to take if you’re looking at Frederick commercial real estate with the goal of repurposing the building.
How to Finance Investment in Commercial Real Estate Property
If you’ve identified an ideal commercial property, the next logical step is to begin consolidating the capital required for investment.
The good news: you don’t need all of the cash up front to purchase a million-dollar property. You will put money down, but most of the time investors borrow a majority of the funds via one or several of many options.
The most common route is to get a bank loan. This is a great option for a majority of investors. You will need to have a well-defined plan for what you are going to do with the property, and it comes with the rigidity of any other bank loan.
Another option is to compile your money alongside other investors. This can be done in a variety of ways, but is generally done through a simple partnership or real estate syndication. There is more flexibility with this option and agreements differ, but risk becomes harder to calculate.
How to Hold and Manage Commercial Property in Frederick
Once you’ve purchased commercial real estate, the next step is to hold and manage the property in a way that maximizes its value.
The idea behind this commercial real estate investment strategy is that, if you hold the property for several years, it will increase in value. While the market fluctuates (sometimes significantly), over a longer period of time you will see a steady increase in market value due to factors like population growth, infrastructure, and inflation. A few tips to do this well:
Choose Quality Property Management Services
If you take this approach, you’ll likely benefit from property management. The best property managers will optimize the value of your property and make your life as an owner easy (although property management itself is no walk in the park).
To select a quality property manager, ask these questions:
- How many rental units do you manage?
- Do I have to sell my property with you if I want to list it?
- What steps do you take to market properties?
- How many years have you been managing commercial properties?
- Can I talk to some of your customers?
Property managers handle maintenance and upkeep for the building, navigate vendor relationships, and manage tenant acquisition and relationships.
Make Your Commercial Property Efficient
Streamlining your building’s costs through efficiencies will increase your return on investment, and one impactful way to do this is to capitalize on energy savings. Two quick to-dos:
Check for Air Leaks
Whether through a door or window, air leaks in your building can be one of the primary causes for unnecessary energy costs. Examine all windows, doors, walls, roofs and even the foundation of your commercial building in Frederick MD for leaks. When you find leaks (and you will), use weather stripping and caulking to seal them.
Window replacement may help, as well; according to the National Institute of Building Sciences, window improvements can cut your lighting and HVAC costs by 10-40%.
Lighting represents about 25-30% of the energy used in commercial real estate buildings. Installing high-efficiency lighting is an easy way to make in immediate cut in energy costs. Switch out incandescent bulbs with compact fluorescent lights (CFLs). LEDs can provide an even more significant savings.
In many cases, of course your property manager will play a role in streamlining your building’s energy usage.
How to Sell or Divest Frederick Commercial Real Estate
While it’s a great time to invest in Frederick commercial property, it’s also a good time to sell to capitalize on current market growth.
Whether you bought to flip or have owned a property for 20 years, when you are ready to move on, here’s what to do.
Revisit the Property Loan
Many commercial real estate loans (especially those on investment properties) have prepayment penalties, some of which can be as large as 20% of the balance. Talk to your loan provider to make sure you are aware of any repercussions due to early payment.
Evaluate the Condition of the Property
Take a look at your property and look for anything that needs fixed or freshened up. If the paint on the walls is starting to look old and chipped, it is probably a good idea to pay the relatively small fee to make the property look nicer.
Do you have a warranty on your roof? Maybe a service contract on your HVAC units? Things like this bring additional value to the buyer, so you need to have records to show them. Even simple documents like floor plans and monthly operation costs will make the property easier to sell.
Find an Agent
One of the most valuable benefits that a commercial-centric agent can bring to the table is their Rolodex and proprietary access to sales channels. In addition to the buyers they know are looking for properties just like yours, they have access to resources that you may not, including membership to commercial real estate associations, email lists, and proprietary software.
How Long Does It Take to Sell Commercial Real Estate in Frederick?
Time and cost are frequently underestimated. It takes at least 2-4 months to move offices, for example, and even more if construction is needed. Expect a sale to take at least that long – and likely longer. The process varies greatly, but there is a lot to work through.
Final Tips (Based on Decades of Experience as a Frederick Commercial Realtor)
Last but not least, we’ll leave you with a few practical tips to navigating commercial real estate.
Pick Property for Your Purpose, Not Your Pride. If you run a business that doesn’t involve foot traffic to your office, don’t overpay for aesthetics.
Don’t move hastily but don’t miss out. Don’t let good opportunities pass you by while you wait for better ones that never come.
Aesthetics are alluring. There is a lot of commercial real estate in Frederick that is getting up there in age. Some are even protected by the Historical Society because of their age. People love old buildings that look updated. People don’t love old buildings that look outdated. Aesthetic refinishes (floors, carpets, lighting) matter.
Ready to Start Your Frederick Commercial Real Estate Journey?
At AushCo, we offer deep local expertise. We’ve worked with businesses to craft some of Frederick’s most successful real estate deals, from creating advanced technical offices and medical spaces to coordinating the area’s biggest commercial real estate projects.
Using decades of experience, we provide professional communication and expert guidance to ensure results from leasing to purchase. We manage a portfolio of commercial properties in Frederick and help our clients to find the best fits.
See our Frederick commercial property listings here. Categories include:
- Childcare properties in Frederick
- Class A office space in Frederick
- Industrial properties in Frederick
- Medical and professional properties in Frederick
- Retail and office properties in Frederick
- Warehouse properties in Frederick
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If you’re ready to get started with Frederick commercial real estate, let’s talk. It’s time to make this process the joy that it should be.