Suburban Maryland Industrial Figures Q1 2025

Industrial and logistics activity across the Mid-Atlantic picked up at the end of 2024, including in Suburban Maryland. The market posted strong occupancy gains following consecutive quarters of dampened leasing activity. This momentum did not continue into the first quarter of 2025, as headwinds in the economy have returned, causing industrial users to be more hesitant in real estate decision-making. That said, Suburban Maryland’s industrial market maintains some positive fundamentals.

Industrial tenants posted low occupancy gains totaling 22,500 sq. ft., however, absorption numbers are expected to grow in 2025 as fully preleased developments are scheduled to deliver later this year. The development pipeline remains active, with two properties delivering completely occupied and one additional project breaking ground. Some space delivered unoccupied, causing the vacancy rate to increase by 80 basis points (bps) quarter-over-quarter.

Leasing activity slowed after the strong activity seen in the fourth quarter of 2024. Despite the increase in vacancy and relatively low leasing totals, rental rates remain elevated, increasing marginally to $14.05 per sq. ft. per annum on a triple-net basis (NNN).