Baltimore Industrial Demand Spurs New Construction: Report
By Keith Loria April 30, 2021 2:32 pm
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A new report by Lee & Associates ofLee & Associates | Maryland revealed that approximately 4 million square feet of industrial and warehouse space was leased in the greater Baltimore metropolitan region during the first quarter of 2021, with the heightened demand spurring a pipeline that has grown to 6.5 million square feet of space.
“The velocity of rental growth is the highest I have experienced during my 30-year real estate career,” Allan Riorda, Lee & Associates of Maryland’s president, told Commercial Observer. “Even though speculative construction remains active, companies are securing space for both immediate and long-term needs for fear they will be shut out of space down the line. A local landlord took a hardball ‘take-it-or-leave it’ attitude in a recent transaction based on the number of end-users in the market.”
The research also indicated a net absorption of nearly 2.9 million square feet of space, representing a large increase from 1.5 million square feet in the previous quarter, per The Daily Record. During the fourth quarter of 2020, nearly 6.1 million square feet of space was leased in the region.
Current vacancy in the area is now 5.45 percent, down from 6.26 percent at the end of last year.
Much of this quarter’s absorption connects to three lease transactions in the I-95 north corridor. Wayfair leased 1.2 million square feet of space at 1500 Woodley Road in Aberdeen; Bella + Canvas inked 716,400 square feet of space at 200 Nazarene Camp Road in North East; and Warehouse Services signed for nearly 460,000 square feet of space at 515 Fletchwood Road in Elkton.
The report noted that e-commerce spending grew by approximately 33 percent nationwide last year across all retail categories, and as nearly two-thirds of the U.S. population hesitates to visit shopping areas, the trend is likely to continue.
Given the ongoing sector demand, more than 6.5 million square feet of space remains under construction in the Baltimore area, including a 1.8 million-square-foot building at Tradepoint Atlantic that will be delivered in June 2022.
Looking ahead to the remainder of 2021, Rioda projects continued demand.
“Maryland remains a highly sought-after location based on activity at the port, an enviable transportation network and access to among the most affluent demographics in the country,” he said. “Companies want buildings delivered yesterday and developers are scrambling to find viable development sites.”
The report also noted that overall asking rents for industrial and warehouse space has increased from $6.20 per square foot at year-end 2020 to $6.44 per square foot in the first quarter.
Update: This story originally misattributed source material. This has been corrected. We apologize for the error.
