MacKenzie Commercial Real Estate Services, LLC is pleased to present the 2nd Quarter Office Market Report for the Baltimore Metropolitan Statistical Area which includes an overview from renowned economist, Anirban Basu, President of Sage Policy Group.
Snapshot:
Activity during the 2nd Quarter 2016 remained relatively consistent throughout the entire Baltimore Metropolitan Office Market. Total market vacancy was 13.58%, representing a mere decrease of 0.10% from the 1st Quarter rate of 13.68%. Most notable improvement was seen in Baltimore County East, a decrease of 2.62% for a rate of 11.74%. This positions the submarket as the second healthiest in the Northern Metro, falling behind the I-83 Corridor's rate of 9.01%. Columbia continues to lead the Southern Metro as the healthiest submarket with an average vacancy of 8.29%. After starting the year with a negative absorption, things returned positive for the Baltimore Metropolitan during the 2nd Quarter for a total of 357,954 sf. Columbia contributed approximately one-third of this total with 108,496 sf of positive absorption. Annapolis reported the largest negative absorption, 20,145 sf.
Average rental rates for the Baltimore Metropolitan Office Market remained flat from the 1st Quarter to the 2nd Quarter, increasing on average by a slight $0.05/sf for an average rate of $22.79/sf. This 2nd Quarter 2016 rate is $0.29/sf higher than the same time last year. The most notable change was among City Center's Class A+ product that saw a decrease of $1.04/sf for a rate of $28.17/sf. This remains the highest rate within the City Center (and total market), exactly $10/sf more than that of City Center Class B product. Other leading submarkets include Annapolis, $26.40/sf and Columbia, $25.60/sf. The best deals in town this quarter, Baltimore City where average rates are $20.41/ sf and also the Route 2 Corridor ($21.80/sf) and Reisterstown Road Corridor ($21.18/sf), areas that are proving to be more aggressive with rental rates and concessions to compete with neighboring favored submarkets.
