Baltimore Industrial Market Figures Q4 2022

Following a record-setting year, 2022 was simultaneously an anxious and reassuring year for industrial real estate in Baltimore. Long material delays, labor challenges, and concerns of an impending recession put into question the resilience of the market. However, demand continues to outpace supply for the moment, and rents continue to climb. Despite the projections of persistent economic headwinds, CBRE has reported that global demand for e-commerce activity will drive an additional two billion sq. ft. of logistics space demand over the next 5 years.

More than 2.8 million sq. ft. of deliveries in Q4 brought the 2022 total to 5.8 million sq. ft. of newly delivered industrial product with a combined prelease rate of 78%. Gross leasing volume slowed moderately in Q4 at 1.3 million sq. ft., below the 5-year quarterly average of 3.5 million sq. ft., but this was expected due to the staggeringly low amount of available space in the market. Tenant demand across the metro has slowed, tempering the blistering pace of rent growth seen over the previous 8 quarters. The most significant leases this year have been renewals, although Q4 saw a flurry of fully-occupied deliveries, resulting in strong net absorption numbers despite a relatively stable vacancy rate quarter-over-quarter.