Strong activity led by ecommerce requirements result in net absorption of 1.6 million square feet
630 Hanover Pike, one million square foot warehouse/industrial building in Hampstead, MD
Nearly 4.3 million square feet of industrial/warehouse space was leased in the greater Baltimore metropolitan region in third quarter 2020, according to a report recently released by Lee & Associates | Maryland. The fully-integrated commercial real estate brokerage and management firm headquartered in Columbia also published data that indicates a net absorption of more than 1.6 million square feet of space in the past quarter, resulting in a current vacancy rate of 6.8%. To fuel the continuing demand of industrial/warehouse space currently required by end-users, more than 3.3 million square feet of space is presently under construction locally.
“The ongoing pandemic has acerbated demand among end-users for warehouse, logistics and last-mile delivery operations as consumers continue to bypass retail stores in lieu of on-line buying,” stated Tom Whelan, Principal for Lee & Associates. “This national trend, which has been steadily growing for the past decade, significantly accelerated in 2020 and the densely populated Baltimore-Washington metropolitan remains an attractive location for this real estate product. We see no let-up in the immediate future for this category as evidenced by the continued speculative development activity that is occurring.”
Significant leasing transactions in the third quarter included the more than one million square foot lease at 630 Hanover Road in Hampstead by Penguin Random House; Amazon’s more than one million square foot lease at Wesel Boulevard Building 1 in Hagerstown and the more than 110,000 square foot lease signed by Imperfect Foods at 7481 Crossroads Drive in Hanover.
Major deliveries were the more than one million square foot building completed by MRP Industrial in Aberdeen and Trammell Crow’s 700,000 warehouse/industrial project completed in Northeast.
The largest construction projects underway in the greater Baltimore metropolitan region include a one million square foot building in Hagerstown by Northpoint Development that will deliver in May 2021; Merritt Properties’ nearly 900,000 square foot in Perryman that will be completed shortly; and a 400,000 square foot industrial/warehouse project in Baltimore that will deliver in March 2021 by Trade Point Atlantic.
Notable building sales included the nearly 190,000 square foot industrial/warehouse building acquired by Atapco Properties for $15 million in Hyattsville; the 93,000 square foot structure purchased in Jessup by Fortified Property Group and Grander Capital for $15.8 million and the 76,000 square foot building acquired by Hop Brothers, LLC for $2.4 million in Baltimore City.
“Significant tenant demand has been offset by Pier One’s decision to depart from a 600,000 square foot building in Aberdeen, a project that we expect to backfill quickly,” Whelan added. “As supply continues to tighten throughout the region, we are seeing some companies leasing space in advance of specific requirements to assure its availability and avoid being shut out.”
Lee & Associates is a commercial real estate brokerage, management and appraisal services firm. Established in 1979, Lee & Associates has grown its service platform to include offices in the United States and Canada. Lee & Associates provides superior market intelligence in office, industrial, retail, investment and appraisal to meet the specialized needs of our clients. Visit https://www.lee-associates.com/offices/office/?id=1591.
