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Despite the continued doldrums in commercial real estate, demand for medical office and laboratory space remains strong, especially in Maryland, according to real estate company Cushman & Wakefield's recent reports and transactions.

Demand for space will increase due to the new federal health insurance reform law, which is expected to extend insurance coverage to more than 30 million Americans, according to a Cushman & Wakefield report. Nationally, with limited construction, the vacancy rate is expected to dip more than 100 basis points to roughly 11 percent by the end of 2011.

The ultimate impact of the bill is unknown, due to the fact that many currently uninsured patients simply show up at hospital emergency rooms.

But the suburban market closest to Washington already fares much better than national market trends, with overall vacancies in the second quarter at 8.1 percent, up from 7.8 percent in the prior three months. The rate was 7.5 percent in Montgomery County and 10.7 percent in Prince George's County.

The average rental rate for medical space in suburban Maryland was $28.87 per square foot, down $0.89 from the same time last year but up $0.78 from the first quarter of 2010.

Second-quarter figures are not yet available for the Baltimore-area market but a flurry of recent deals shows strong demand. Most recently, Windsor Healthcare Equities of Hanover bought a former Giant Food store at 1734 York Road in Lutherville for $4.8 million last month, according to state property records. The 43,000-square-foot space in Ridgely Plaza Shopping Center is being converted into a medical office building due to deliver in the first quarter of next year, according to CoStar Group, the Bethesda real estate information company.

That follows the $10.4 million sale of the St. Agnes Healthcare Center in Catonsville to JAG Associates of Frederick and the $2.7 million sale of Pine Heights Medical Center in Baltimore, both in March, and the $11.25 million sale of Good Samaritan Hospital's Smyth Professional building in the fourth quarter of 2009.

Gill-Simpson breaks ground on new Owings Mills HQ

Gill-Simpson, a Baltimore energy industry electrical engineering and construction company, announced that it broke ground July 14 on its new two-story headquarters in Owings Mills, part of a 180,000-square-feet office complex it plans to develop.

The first 40,000-square-foot Class A building, which is planned for gold certification under the U.S. Green Building Council's Leadership in Energy and Environmental Design program, will house 50 of the company's project management, engineering and estimating staff. Its remaining 500 staff and field employees will continue to work from offices in Baltimore, Hagerstown and Cumberland and job sites across the mid-Atlantic, according to company information.

The new headquarters building is scheduled for completion in May. Eventually it is to be joined by two other buildings at the 13-acre site on Red Run Boulevard. The company plans to lease 25 percent of the headquarters building and all of the second and third buildings.

"The current energy market is very dynamic," said Christopher Odell, president of Gill-Simpson, in a statement. "We're seeing tremendous opportunity for a company with our expertise in renewable generation and large-scale energy usage and our investment in this project reflects our accelerated growth in those areas."

Since its founding in Baltimore in 1932, the company has grown from a provider of industrial and commercial electrical contracting services to an authority on renewable generation and critical power projects.

Noteworthy projects include the Staples Distribution Solar Project in Hagerstown and the Aberdeen Proving Ground's C4ISR facility, one of the nation's largest electrical installations.

"The fact that Gill-Simpson is currently providing large-scale electrical services to major construction projects throughout Maryland is another signal that the economy is turning around," said David S. Iannucci, executive director of the Baltimore County Department of Economic Development.

Annapolis incubator building fetches $10 million

The Chesapeake Innovation Center building, an Anne Arundel County business incubator in Annapolis, sold for $10 million, according to broker MacKenzie Cos., which represented the buyers, 175 Admiral Cochrane Drive LLC.

The 56,000-square-foot building is in the West Woods Business Park adjacent to Route 50. The five-story class A office property is home to the county incubator and other tenants including SIDUS and Northwestern Mutual.

MacKenzie will continue to provide landlord advisory and leasing for the building, which is to have 4,000 square feet available this fall.

Integrated BioTherapeutics moving HQ to Gaithersburg Accelerator

Integrated BioTherapeutics of Germantown, which specializes in the infectious disease and biodefense markets, plans to move to new headquarters in Gaithersburg, according to real estate company Scheer Partners of Rockville.

Integrated BioTherapeutics will move to the Gaithersburg Accelerator at 21 Firstfield Road, a building that is receiving more than $6 million in lab-related renovations.

"Having a promising company like Integrated BioTherapeutics join Zyngenia and other biotech companies at the Accelerator is a testament to the capabilities and resources available at this premiere facility," Gaithersburg Mayor Sidney Katz said in a press release.

The new headquarters is almost 60 percent bigger than Integrated's current space. The company will occupy 10,500 square feet of laboratory and office space on the first floor.

Scheer Partners and the city of Gaithersburg agreed this year to jointly market and promote the Gaithersburg Accelerator, a 53,000-square-foot research building.

Host Hotels & Resorts pays $97M for London hotel

Lodging real estate investment trust Host Hotels & Resorts of Bethesda has acquired the 266-room Le Meridien Piccadilly in London for $97.2 million.

The hotel is in the prestigious Mayfair district of London, a central location for both business and leisure travelers, and has 12,000 square feet of meeting space plus a large health club with one of the largest indoor pools in the London hotel market, according to Host information.

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.