Market Overview - Baltimore / I-95 Corridor
Tenant activity in the Baltimore market remained robust despite economic headwinds starting to affect the market. Amazon and Lowes both signed at Harbor Logistics in Baltimore City for 241,963 and 104,647 square feet respectively in two of the largest deals of the quarter. Southside Logistics Center 2 at 4601 Curtis Avenue continued to be an attractive option as well when C-Care signed 63,250 square feet on the heels of Xpress Global Systems signing the previous quarter for 125,350 square feet.
Leasing activity remained restrained in Prince George’s County during the last quarter of the year. Baldor Specialty Foods, one of the largest distributors of produce and specialty foods, signed for 101,195 square feet at 4450 Hargrove Drive in Lanham Maryland. Baldor took the entire distribution center built in 2020.
Market Overview - Washington County / Hagerstown
The Washington County/Hagerstown market registered negative 207,500 square feet of absorption, marking the second quarter in a row of negative demand. Vacancy increased by 90-basis points during the quarter to end the year at 13.8 percent. Vacancy is up by over seven percentage points from the start of the year largely due to over 2 million square feet of new product which delivered in the first half of the year. The total square footage under construction ended the year at 5.1 million square feet, a new high watermark in Washington County. Overall asking rental rates in the Washington County/Hagerstown market increased slightly from last quarter to end 2022 at $5.83 on a triple net basis.
Market Overview - Frederick County
The Frederick County industrial market registered 31,380 square feet of positive absorption in the fourth quarter compared to 235,239 the previous quarter. That brings the 2022 net absorption to 320,562 square feet. The minimal positive absorption was offset by the delivery of 65,400 square feet of space bringing the vacancy up slightly to end the quarter 6.2 percent, up 20-basis points from the previous quarter. This brings the total square footage delivered for the year to 636,428 square feet in the Frederick market with just over 1.5 million square feet still under construction.
Market Overview - Montgomery County
In the fourth quarter the Montgomery County industrial market registered -76,627 square feet of absorption compared to -8,410 square feet in the third of 2022. The considerable amount of negative absorption caused a 30-basis point increase from the from the third quarter. The vacancy in the market has slowly ticked up over the last two quarters to end at 6.1 percent, exactly where it was to start the year, however, down from 2021 and 2020 where vacancy was 6.6 and 8.0 percent respectively. New construction continued to be absent with nothing delivering in 2022 and nothing currently under construction.