Baltimore Industrial Market Remains Tight Despite Economic Volatility – Trade Observer
More than 2.7 million square feet of industrial space was leased in the Baltimore metro area in the second quarter of 2022, according to the latest industrial report from Lee & Associates-Maryland.
This is a slight increase from the 2.6 million square feet leased in the first quarter, in addition to the nearly 15 million square feet of industrial space leased in the region last year.
“Demand from an investment and rental activity perspective makes the industry the hottest real estate sector, now and in the foreseeable future,” Tom Whelan, director of Lee & Associates-Maryland, told Commercial Observer. “The region has access to 8-12 million consumers in one of the richest regions in the country, as well as a competitive port.”
Net uptake rose to 1.7 million square feet of space from 930,000 square feet in the first quarter, as the overall vacancy rate rose from 3.7% to 3.95%, according to the report. Approximately 10.3 million square feet of industrial/warehouse space is available for lease locally, up from 10.9 million last quarter.
“While there has been a partial slowdown in demand for larger industrial space, the need for infill locations has increased and has been partly responsible for restricting vacancy,” Whelan said. “The Greater Baltimore Industrial Market continues to follow the growth pattern of the industrial sector nationwide and [we] expect the rental to remain constant for the rest of the year. Perhaps as a direct result of inflation, rental rates also continue to rise.
Indeed, average rents went from $7.28 to $7.66 per square foot. In addition, 66 sale transactions were completed for a cumulative value of nearly $517 million.
The largest leases in Q2 were the 598,000 square foot lease signed by Baltimore International Warehouse and Transportation at 2800 East Blvd. in Middle River; Closedthe 186,000 square foot lease to 8700 Robert Fulton Drive in Colombia; and Alconthe 142,000 square foot lease to 6740 Business Drive at Elkridge.
Major industry sales included the $104.8 million acquisition of 10900 Hopewell Road to Hagerstown by Fund raising and the $80.5 million acquisition of 1900 Clark Road to Havre De Grace by Apollo Net Lease Capital Corp.
Nearly 1.6 million square feet of space were delivered in the second quarter, bringing the total volume of space delivered in 2022 to approximately 3.6 million square feet of space. As for future industrial space, approximately 15 million square feet of space is currently under construction, surpassing the 12.2 million square feet of space reported in the first quarter.
These include a 1.8 million square foot building at Tradepoint Atlantic which will be delivered in the third quarter; a 1.2 million square foot building in 55 West Oak Ridge to Hagerstown scheduled for Q4 delivery; and another 1.2 million square foot building at 10440 Downsville Pike completion expected in the second quarter of 2023.
Keith Loria can be reached at [email protected]