News

Regional Industrial Market Ends 2014 on a Strong Note

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Both Warehouse and Flex Markets Sustain Momentum into the New Year
The Baltimore region’s industrial market remains vibrant as various economic actors continue to leverage the region’s strategic location
and intermodal transportation infrastructure. Net absorption in the regional warehouse segment totaled 1.2 million square feet (msf)
during the fourth quarter, with the Baltimore City market amassing 604,530 square feet (sf) of positive net absorption.

In previous years, the Harford/Cecil market had dominated regional net absorption, but that has changed, with Baltimore City’s industrial sites increasing making their mark. That said, the Harford/Cecil market continues to progress in conjunction with other sub-markets. The Harford/Cecil and Annapolis markets net absorbed 297,000 and 205,000 sf, respectively, during 2014’s final quarter. The BW Corridor chipped in another 125,000 sf of positive net absorption.

Regional direct vacancy fell from 8.52 percent a year ago to 8.27 percent over the past four quarters. However, despite impressive and
consistent positive net absorption and steadily declining vacancy, warehouse asking rent has actually slipped over the past year, from
$4.74 per square foot (psf) to $4.68 psf more recently. This is likely a reflection of shifting uses and also the market power of a number
of rapidly expanding users of space.

The pace of improvement in the regional fl ex market stalled during the fourth quarter of 2014, net absorbing -2,594 sf. However, year-to date, the market has net absorbed more than half a million square feet. The Harford/Cecil market leads the way, with net absorption of
171,054 sf over the past year. Currently, Harford/Cecil’s availability stands at 12 percent, slightly less than regional average availability of
13.3 percent. The BW Corridor has net absorbed more than 130,000 sf over the past year, while Baltimore City has net absorbed more
than 82,000 sf. As with the warehouse market, asking rent has slipped, from $10.99 psf a year ago to $10.74 psf today.