Although Baltimore’s suburbs continue to outperform the city, Downtown Baltimore surprisingly reported positive rent growth in 2020. In addition, Downtown also led in absorption and recorded the lowest vacancy rate in Baltimore City. Despite the pandemic, absorption increased over the year and stabilized vacancy decreased in the metro area, including in Baltimore City. Rents continue to rise in the suburbs, especially in the Northern Suburbs where growth in 2020 outperformed the five-year average. Meanwhile, rents in Baltimore City continue to decline. The development pipeline remains in check with little change from a year ago.

FOURTH QUARTER 2020 HIGHLIGHTS

• Stabilized vacancy for the Baltimore metro area decreased from 5.9% a year ago to 4.5%. Vacancy in the suburbs decreased by 180 basis points to 3.2% and by 40 basis points in Baltimore City to 7.4%.
• Average effective rents in the metro area are $1,751 ($1.84 per SF). Rents are down over the year by 0.3% metro-wide. Rent growth was strongest in the Northern Suburbs – up by 3.3%. The Southern Suburbs had a rent increase of 1.0%. Meanwhile, rents decreased by 5.2% in Baltimore City.
• Absorption increased in 2020 to 3,227 units, more than double from 2019. Baltimore City also experienced an increase in absorption, up 58%.
• The supply pipeline metro-wide is basically unchanged compared to December 2019. There are 6,994 unleased units under construction or planned for delivery in the next 36 months in the metro area after attrition. In Baltimore City, the 36-month development pipeline is down by 4%.
• Per project lease-up pace for the 16 actively marketing projects in the Baltimore metro area currently averages 12 units per month, consistent with last year’s number. 

Delta Associates, the research affiliate of Transwestern, is a firm of experienced professionals which has been providing consulting and subscription data services to the commercial real estate industry for over 40years.

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