Regional Industrial Market Carries Momentum into 2015
Both Warehouse and Flex Markets Begin 2015 on Positive Note
The Baltimore regional industrial market maintained its momentum during 2015’s initial quarter. Once again, net absorption in the warehouse segment topped one million square feet. The flex market absorbed more than 45,000 square feet after slipping during 2014’s final quarter.
Though many who read these reports are largely focused on real estate transactional volume and development activity, the importance of space used to inventory and distribute merchandise stretches well beyond real estate commissions and net operating income. Leveraging the Port of Baltimore and the balance of the region’s intermodal transportation network is key to reducing unemployment, increasing incomes and rendering Baltimore a more prosperous and cosmopolitan community.
Baltimore City paced the regional warehouse market by absorbing more than 1.2 million square feet. The implication is that the balance of the region sustained negative net absorption, including in the Harford/Cecil market, which over the past several years has represented the region’s strongest sub-market. The Harford/Cecil warehouse market suffered negative net absorption of 262,198 square feet during the quarter. The BW Corridor experienced negative 46,899 square feet of net absorption.The regional warehouse vacancy rate stands at 8.54 percent, up from 8.33 percent at the same time last year.
Flex market performance was a mirror image of warehouse market dynamics. Harford/Cecil led the area’s flex segment with positive net absorption of 28,140 square feet, while Baltimore City’s net absorption totaled negative 23,247 square feet. Regional direct vacancy stands at 9.0 percent, down from 9.6 percent a year ago and 9.1 percent during last year’s final three months. Asking rent has actually dipped in the regional flex market over the past quarter and year, and presently stands at $10.62 per square foot.Asking rents have been roughly flat in most submarkets, with Annapolis representing a prominent exception. There, asking rent is up by nearly $1.50/square foot from a year ago.