Strong activity led by ecommerce requirements result in net absorption of nearly 1.5 million square feet
601 Chelsea Road in Harford County
Approximately 6.1 million square feet of industrial/warehouse space was leased in the greater Baltimore metropolitan region in fourth quarter 2020, according to a report recently released by Lee & Associates | Maryland. This adds to the 4.3 million square feet of space that was leased in the region during third quarter 2020, representing an increase of more than 40%. The fully-integrated commercial real estate brokerage and management firm headquartered in Columbia also published data that indicates a net absorption of nearly 1.5 million square feet of space, representing a slight increase from the 1.4 million level the previous quarter. The current vacancy rate at year-end was 6.29%, which is a slight drop from 6.8% at the end of third quarter. In response to the continuing demand of industrial/warehouse space currently required by end-users in numerous sectors, more than 6.3 million square feet of space is presently under construction locally.
“Consumers and business were forced to go and remain inside for the majority of 2020, which resulted in the unprecedented surge of ecommerce spending and the resultant need for the additional demand of warehouse space to store and subsequently deliver products,” stated Tom Whelan, Principal, Lee & Associates | Maryland. “This activity is especially prevalent in densely-populated areas such as the Baltimore-Washington metropolitan region. Continued strong demand has fueled the increase in new construction, an upward trend that we expect to continue in the immediate future.”
Significant transactions in the fourth quarter included McCormick & Co.’s 1.8 million square foot lease at Tradepoint Atlantic in Baltimore County, and the sale of an 890,000 square foot building at 601 Chelsea Road in Harford County, with Lee & Associates | Maryland and Lee & Associates of Eastern Pennsylvania representing the buyer. Other large warehouse leases included the 400,000 square foot lease with Pompeian Oils at 1800 Sparrows Point Boulevard and the 360,000 square foot lease with Nash Finch at 8024 Telegraph Road.
The largest construction projects underway in the greater Baltimore metropolitan region include a 1.8 million square foot building at Tradepoint Atlantic that will be delivered in June 2022; a more than one million square foot building in Hagerstown by Northpoint Development that will deliver in May 2021; and Merritt Properties’ nearly 900,000 square foot in Perryman that will be completed shortly.
The overall asking rent has increased from $5.91 in third quarter 2020 to $6.31 by year-end.
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
