MORE THAN 4.4 MILLION SF OF INDUSTRIAL SPACE LEASED IN GREATER BALTIMORE AREA IN 4TH QUARTER 2021, SAYS LEE & ASSOCIATES

More than 4.4 million square feet of industrial/warehouse space was leased in the greater Baltimore metropolitan region in fourth quarter 2021, according to a report recently released by Lee & Associates | Maryland. This brings to 15 million, the cumulative total of square feet of industrial/warehouse space leased in the region during last year. The fully-integrated commercial real estate brokerage and management firm headquartered in Columbia also published data that indicates a net absorption of nearly 3.7 million square feet of space and a current vacancy rate of approximately 3.4% for the final quarter of last year. In third quarter 2021, these figures were 4.3 million square feet of space absorbed and a vacancy rate of 4.70%. Consistent with the previous quarter, approximately 12 million square feet of space is presently under construction locally.

“The execution of several large leases in Harford County contributed to the healthy absorption total and the resultant drop in the market-wide vacancy rate, as well as starting rental rates that have now ticked $2 to $3 higher from this time last year,” stated Tom Whelan, Principal, Lee & Associates | Maryland. On the sales side, we are now seeing deals closing at cap rates below 4%. This activity is occurring most typically for buildings with just a few years left on the lease and are now being underwritten at current market rates.

“We foresee a long runway ahead for this asset class nationally and specifically among densely-populated submarkets including the greater Baltimore-Washington, D.C. area, as retailers and suppliers attempt to keep pace with the same day and next-day demands of consumers. Despite nearly 1.6 million square feet of space being delivered last quarter, the historically-low vacancy rate declined again and the average asking rent is now approaching $7.50 per square foot,” Whelan added.

On the sales side, 40 separate transactions were completed for a total transactional volume of approximately $667 million. This was led by the STAG Industrial purchase of 11835 and 11841 Newgate Road in Hagerstown for $139.5 million from Prologis. In addition, The Blackstone Group acquired 200 Gateway Drive in Northeast for $95 million, as well as 239 Belvidere Road in North East as part of a $2.6 billion portfolio. The seller in both instances was Medline Industries.

Last quarter’s largest leases were the WebstaurantStore 656,800 lease at 1100 Woodley Road in Aberdeen; the XPO Logistics 571,762 lease at 610 Chelsea Road in Aberdeen and the 506,003 lease by Lenox at 16507 Hunters Green Parkway in Hagerstown.

The largest construction projects underway in the greater Baltimore metropolitan region include a 1.8 million square foot building at Tradepoint Atlantic that will be delivered in June 2022; an 800,000 square foot building in Williamsport that will be completed in May 2022; and a 1.2 million square foot project in Hagerstown that is slated for delivery in December 2022.

The largest deliveries were the 520,000 square foot building at 1701 Finishing Mill Road by Tradepoint Atlantic; the 276,000 square foot project at 4901 Executive Court South in Frederick by Matan Companies and the 240,000 square foot building delivered at 4606 Appliance Drive by LBA Logistics.

Lee & Associates is a commercial real estate brokerage, management and appraisal services firm. Established in 1979, Lee & Associates has grown its service platform to include offices in the United States and Canada. Lee & Associates provides superior market intelligence in office, industrial, retail, investment and appraisal to meet the specialized needs of our clients. Visit https://www.lee-associates.com/offices/office/?id=1591