Demand in the Baltimore/BWI region’s industrial market continued to be strong registering 731,373 square feet in the fourth quarter, bringing the 2020 total net absorption to 5.7 million square feet.
After strong absorption in the third quarter warehouse demand slowed in fourth quarter, ending with 184,783 square feet of absorption, down from just over 3 million the previous quarter. Warehouse space was also overwhelmingly positive for the year with over 5.3 million square feet of net absorption.
After 8.0 million square feet delivered in the first three quarters of 2020, the fourth quarter was decidedly slower with just over 66,000 square feet delivered. There is 3.6 million square feet currently under construction in the region with several other projects poised to break ground.
Vacancy & Rental Rates
The strong positive absorption in the fourth quarter decreased vacancy by 30 basis points to end the quarter at 8.3 percent. With less than half of the amount of square footage currently under construction than what delivered in 2020, vacancy is anticipated to further decrease if demand remains strong.
Overall asking rental rates increased $0.51 from during the quarter to end the year at $7.21 per square foot NNN. Both the flex and warehouse rents increased, the largest growth being in flex where rents ended at $10.31 per square foot up $0.78 from the previous quarter.