Jim Lighthizer

If there was one asset class that came out a winner in the pandemic, it was industrial. And Chesapeake Real Estate Group, a Hanover, Md.-based company specializing in industrial, was among the most active in the D.C. region over the past year.

Jim Lighthizer, principal and managing partner of the firm, noted that investor interest, tenant demand and fundamentals remain unprecedented for industrial real estate in the area, and space is at an all-time premium.

“Tenants are snatching up available spaces as quickly as developers can build them, and they are also making leasing decisions with the fear that space will not be available down the line,” he said. “I never expected to see the available inventory to be as limited as it is now. Nor did I expect to see the rental rate and property values to be as high.”

The industrial business is the lion’s share of what Chesapeake Real Estate Group does, and at no time has Lighthizer ever seen things so popular from all sides — investors, tenants and landlords.

“People are selling things online and the e-commerce business has fueled an enormous amount of growth, especially since COVID, with 20 to 30 percent of all goods being bought online now,” he said. “It has a trickle-down effect. Those e-commerce companies are taking Class A space that other companies might have ordinarily taken. So, some of those companies take Class B spaces, and former Class B companies are being forced to find Class C spaces.”

Further evidence of the hot D.C.-area industrial market comes via some recent Chesapeake trades. Lighthizer’s company has historically found land sites to build industrial space in order to lease and manage, but the market is so hot that the company has been selling its positions in the land before even breaking ground.

For instance, in March, the company unloaded its interest in the up-and-coming Abingdon Business Park to Black Creek, Md., after spending three years planning and permitting the project located near Interstate 95. A few months earlier, Chesapeake Real Estate sold its interest in the 600,000-square-foot Route 100 Logistics Park in Severn, Md., with the new owner planning an Amazon building.

“We also have a couple of other projects we are finishing for Amazon in Anne Arundel County,” Lighthizer said of the Maryland location. “We’ve built three properties for them and acted as a fee-based developer for another.”