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The Maryland condominium market had another lousy year in 2008, but the shrinking supply of new unsold units is nearing a point where prices could start to increase by the end of this year in some areas, according to the latest report cosponsored by Delta Associates and McWilliams|Ballard.

At least that's the case in Washington's close-in suburbs, where prices for new units fell by 8.1 percent last year. But with few new buildings coming to market, the current inventory-to-sales ratio for new units was near the golden three-year mark as 2008 ended. Historical data show that prices begin to climb at that level.

Regionwide, the ratio had declined to 5.9 years, compared with 8.2 years in the third quarter of 2008. Montgomery and Prince George's counties fared better, with ratios of 3.4 years and 3.5 years, respectively.

"We are projecting the inventory-sales ratio to decline to three years of supply by the end of 2009, at which time price traction should emerge in select submarkets," the report said.

Farther outside the Beltway, the picture remains bleak. The ratio stood at 9.6 years in the Anne Arundel-Howard counties submarket, 8.8 years in Baltimore's northern suburbs and 9.6 years in the city's southern suburbs.

The ratio was literally off the charts in Baltimore itself because of buyers backing out of deals.

The report said that "for the third time in the last four quarters, there were more contract cancellations than sales in Baltimore City. For the year, there were a total of just 48 net sales in the metro area, a reduction of more than 90 percent from 2007."

After incentives, effective new condo prices fell 11.4 percent in the Baltimore region last year.

Delta forecast that a recovery in the Baltimore market would not occur until 2010-11 and said developers and investors should stick to converting properties to rentals "or pursue niche condo deals at exceptional locations of extraordinary design."

Greenbelt office building adds three tenants

Three new tenants have signed leases totaling 52,723 square feet at the Golden Triangle complex in Greenbelt, bringing occupancy up to 86 percent, according to landlord Washington Property Co.

The Maryland-National Capital Park & Planning Commission will move in next month, taking 29,944 square feet on three floors at Golden Triangle I, at 7833 Walker Drive. The U.S. General Services Administration signed a lease for an additional 9,459 square feet in the same building and Ricoh Americas Corp. is leasing 13,320 square feet on the first floor of Golden Triangle II next door at 7855 Walker Drive.

"Golden Triangle has experienced strong leasing activity from tenants eager for Class A office space in Prince George's County," said Charles K. Nulsen III, president of Washington Property.

Each of the two office buildings at Golden Triangle has six stories, totaling about 122,000 square feet, offering quick access to the Beltway, Baltimore-Washington Parkway and Interstate 95.

KLNB does $1.1B of business in 2008

Real estate company KLNB LLC of Baltimore said it made $1.1 billion in commercial real estate transactions in the Maryland, Washington and Northern Virginia markets in 2008.

The company said it leased or sold more than 1 million square feet of commercial office, warehouse, industrial and retail space in the region, covering 900 separate transactions.

Commercial real estate news items may be mailed to: Steve Monroe, The Business Gazette, 9030 Comprint Court, Gaithersburg, MD 20877; e-mailed to smonroe@gazette.net; or faxed to 301-670-7183.