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Maryland Industrial Report Q1 2021

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Demand & Supply

The Baltimore/I-95 Corridor industrial market delivering 1.1 million square feet in the first quarter of 2021. All of the new construction came in the popular warehouse/distribution segment of the market. The largest delivery was at 1225 S Philadelphia Boulevard in Perryman where 860,000 square feet delivered vacant. Additionally, several ground breakings restocked the pipeline to end the quarter with 3.5 million square feet under construction ensuring the continued increase in inventory.

Demand in the region continues to be strong with 1.4 million square feet of positive demand in the first quarter. This is slightly above the five year quarterly average of 1.1 million square feet, although below the single quarter demand of 3.1 million that occurred one year ago. The majority of demand this quarter came from the warehouse sector which registered 1.5 million square feet with flex and manufacturing accounting for 116,278 and -199,315 square feet, respectively.

Vacancy 

Strong demand has outpaced the significant amount of new product coming online over the past three quarters to end the first quarter of 2021 at 8.4 percent. Vacancy has been relatively stable averaging 8.5 percent over the last three years. With a considerable amount of product currently under construction and more in the pipeline, vacancy is likely to remain stable even with the strong tenant demand currently in the market.

Rental Rates

As demand continued to be positive and new high-end product delivered to market, rental rates have risen considerably. Over the last year asking rental rates rose by more than a dollar to end the first quarter of 2021 at $7.58 on a triple net basis. In several specific instances owners have become so embolden as to push rental rates by as much as 70 percent when negotiating renewals. In many cases tenants have very few options to move and coupled with costs associated with changing locations the increased renewal costs are still the best option.


Port of Baltimore

Maryland Industrial Report Q1 2021

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