The Baltimore/BWI industrial market topped 2.7 million square feet of absorption during the third quarter of the year, even as COVID-19 continued to further impact the economy.
Warehouse rebounded dramatically registering over three million square feet of positive absorption after accounting for negative 831,814 square feet of demand during the previous quarter. This was overwhelmingly focused in the Baltimore County East submarket where Amazon moved into nearly 1.5 million square feet of space alone.
Another 746,490 square feet delivered in the third quarter on the heels of delivering 2.1 million square feet in the previous quarter. Construction levels have dropped due to recent deliveries, however, demand in the market may drive that number up again as tenants seek more space.
Vacancy & Rental Rates
With over three million square feet of demand, the vacancy rate fell noticeably from 9.3 percent in the second quarter to 8.4 percent in the third quarter. While still above the three-year average of 7.9 percent, it is the exact same as the five-year average. Little construction and strong demand in the market should keep vacancy on a downward trajectory in the near term.
Asking rents increased for the fourth straight quarter, ending the third quarter at $6.70 per square foot on a triple net basis. Warehouse had the largest increase, rising $0.26 to end the quarter at $6.08 per square foot.