MARKETBEAT

Baltimore
Industrial Q1 2019

BALTIMORE INDUSTRIAL Market Overview

The Baltimore Metro industrial market started 2019 with very
Economic Indicators healthy market fundamentals. The vacancy rate for the market
12-Month
Q1 18 Q1 19 rose 120 basis points (bps) year over year (YOY) to 7.1%. The
Forecast
growth in the market is not due to lack of activity, but the market
Baltimore Employment 1.41M 1.43M
adjusting to the additional 4.4 million-square-feet (msf) added to
Baltimore Unemployment 4.2% 4.1% the market in 2018. Direct rental rates decreased YOY in the first
U.S. Unemployment 4.1% 3.8%
quarter of 2019 3.9% to $5.49 per square foot (psf).

Numbers above are quarterly averages; October and November 2018 data used to represent Q4 2018 The Baltimore warehouse/distribution market netted a positive
64,101 sf of absorption with 162,348 sf falling into the Beltway
Market Indicators (Overall, All Property Types) Submarket of Baltimore. Warehouse direct rents in the first
quarter of 2019 sit at $4.99 psf a 3.9% decrease YOY. Landlords
12-Month
Q1 18 Q1 19 and tenants are adjusting to the additional swing in inventory to
Forecast
the market and as this space is leased expect a spike in rental
Vacancy 6.4% 7.1%
rates.
YTD Net Absorption (sf) 1.3M 225k

Under Construction (sf) 839k 5.9M Southern Glazers and UPS both signed new leases in the
warehouse sector of the Baltimore Industrial Market. The two
Average Asking Rent* $5.75 $5.51
.
deals totaled over 400,000 sf. Southern Glazers signed a deal at
*Rental rates reflect net asking $psf/year 7001 Quad Ave in the Baltimore County East submarket for
209,934 sf and UPS inked their deal at 600 Hickory Drive in
Harford County for 205,030 sf.
Overall Net Absorption/Overall Asking Rent
4-QTR TRAILING AVERAGE The office services market rebounded in the first quarter of 2019
with a 90 bps decrease in vacancy YOY to 6.9%. The first
2,000,000 $6.00
quarter also welcomed 161,318 sf of positive absorption a 27%
1,800,000
$5.75 increase YOY. Rental rates for the office services market
1,600,000
increased 2.5% YOY to $10.33 psf.
1,400,000 $5.50
1,200,000 1801 62nd Street in the Northeast Baltimore submarket was the
$5.25
1,000,000 only new project to deliver to the market, the 94,130 sf project
800,000 $5.00 delivered vacant. The Pipeline for the rest of 2019 continues to
600,000 be strong with an additional 3.9 msf slated to deliver, with 60% of
$4.75
400,000 this inventory preleased.
200,000 $4.50
2012 2013 2014 2015 2016 2017 2018 2019
Outlook
Net Absorption Asking Rent, $ PSF The Baltimore industrial metro market will continue to shine in
2019, as companies are attracted to the location and affordability
the region provides. Already in 2019 Floor & Décor, Home Depot
Overall Vacancy and Smithfield have inked new build-to-suit deals in the market.
Tenants are showing a lot of interest in the northern portion of
12%
the Baltimore Metro with new projects at Tradepoint Atlantic and
10% Principio. As these projects lease up there will be additional
pressure on tenants that will drive rental rates north. Investors
8% have also found the market attractive and will continue to invest
Historical Average = 8.3% in the market for 2019 as it offers an affordable alternative to the
6% Washington D.C. and Northern Virginia markets.

4%

2%

0%
2011 2012 2013 2014 2015 2016 2017 2018 2019
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 MARKETBEAT

Baltimore
Industrial Q1 2019

YTD YTD YTD Direct YTD Overall

Overall YTD Sales Under *Direct Weighted
Property Inventory Leasing Construction Net Net
SUBMARKET Vacancy Activity Construction Average Net
Type (SF) Activity Completions Absorption Absorption
Rate (SF) (SF) Rental Rate
(SF) (SF) (SF) (SF)
Howard County Flex 6,015,858 5.0% 79,795 84,514 0 0 3,094 3,094 $13.98
W/D 30,021,464 5.6% 1,821,727 0 0 0 -149,954 -149,954 $6.33
Anne Arundel County Flex 8,878,940 7.4% 166,181 0 0 0 3,667 3,667 $10.24
W/D 22,461,327 9.0% 1,174,929 257,706 135,000 0 42,305 42,305 $5.43
Baltimore City/County-Southwest Flex 2,985,135 8.8% 61,888 0 0 0 -11,693 -11,693 $12.00
W/D 20,507,313 8.8% 405,211 0 0 0 48,305 48,305 $4.01
Baltimore-Washington Corridor Flex 17,879,933 6.8% 307,864 84,514 0 0 -4,932 -4,932 $11.10
W/D 72,990,104 7.5% 3,401,867 257,706 135,000 0 -59,344 -59,344 $5.34
Total 90,870,037 7.2% 3,709,731 342,220 135,000 00 -64,276 -64,276 $6.24
Harford County Flex 2,264,780 7.4% 262,530 0 0 0 30,976 30,976 $14.08
W/D 21,115,922 7.5% 549,900 0 1,350,625 0 -6,853 -6,853 $4.54
Cecil County Flex 150,000 0.0% 0 0 0 0 0 0 N/A
W/D 10,843,351 1.6% 100,000 0 2,612,965 0 0 0 $2.97
Baltimore County East Flex 5,022,083 8.9% 446,717 0 0 0 22,937 22,937 $9.08
W/D 50,173838 8.9% 1,312,236 0 1,764,980 94,130 -32,050 -32,050 $4.41
I-95 North Corridor Flex 7,436,863 8.3% 709,247 0 0 0 53,913 53,913 $9.04
W/D 82,133,111 7.6% 1,962,136 0 5,728,570 94,130 -38,903 -38,903 $4.57
Total 89,569,974 8.2% 2,671,383 0 5,728,570 94,130 15,010 15,010 $4.96
Baltimore County-North/West Flex 9,808,101 6.5% 31,409 0 0 0 108,337 108,337 $9.35
W/D 6,038,925 4.8% 106,200 0 0 0 -11,227 -11,227 $8.00
Baltimore City Flex 1,311,097 2.3% 73,667 0 0 0 4,000 4,000 $6.85
W/D 5,837,966 4.7% 45,097 0 0 0 140,000 140,000 $4.64
Carroll County Flex 29,160 100.0% 0 0 0 0 0 0 N/A
W/D 7,203,249 3.1% 27,389 0 0 0 33,575 33,575 $5.65
Beltway Submarkets Flex 11,148,358 6.9% 105,076 0 0 0 12,337 12,337 $9.37
W/D 19,080,140 4.1% 178,686 0 0 0 162,348 162,348 $6.93
Total 30,228,498 5.1% 283,762 0 0 0 274,685 274,685 $8.24
TOTAL FLEX Flex 36,465,154 6.9% 1,122,187 84,514 0 0 161,318 161,318 $10.33
TOTAL W/D W/D 174,203,355 7.2% 5,542,689 257,706 5,863,570 94,130 64,101 64,101 $4.99
BALTIMORE TOTALS Total 210,668,509 7.1% 6,664,876 342,220 5,863,570 94,130 255,419 255,419 $5.49
FLEX = Flex Space W/D = Warehouse/Distribution *Rental rates reflect asking $psf/year

Key Lease Transactions Q1 2019

PROPERTY SF TENANT TRANSACTION TYPE SUBMARKET
7001 Quad Ave. 209,934 Southern Glazers New Lease Baltimore County East
600 Hickory Dr 205,030 SK Realty Management New Lease Harford
1901 Park 100 Dr 82,740 Towne Air Freight/Forward Air New Lease BWI/Anne Arundel

4611 Mercedes Dr 70,133 McCormick & Co. Inc New Lease Harford

Key Sales Transactions Q1 2019

PROPERTY SF SELLER/BUYER PRICE / $PSF SUBMARKET

Westmount Realty Capital/Kohlberg

7462 Candlewood Rd 357,706 $37,700,000 / $105 BWI/Anne Arundel
Kravis Robert & Co. L.P.

8970-8990 Route 108 84,514 Feldman Bergin Development $9,950,000 / $117 Howard County

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cushmanwakefield.com David.Spragg@cushwake.com ©2019 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources
believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as
to its accuracy.