Mid-Atlantic Research Reflections 2021 - Baltimore
November 10, 2021
The technology sector has remained one of the most resilient and dynamic industry in 2021, both in terms of business performance and office leasing demand—despite the continued effect from remote and hybrid work. This trend is well reflected in the Baltimore metro region—a leading tech talent market in the U.S. As of September 2021, professional and business services employment (which tech firms are grouped under) is the region’s only industry to exceed its pre-pandemic employment level (+4% from January 2020). Tech tenants contributed more than 700,000 sq. ft. of office leases across the region so far this year, representing 40% of total leasing demand. Microsoft, Rekor Systems, L3Harris and Klas Government are all examples of tech firms that have expanded their regional office footprint year-to-date.
The BWI Corridor has been the most active submarket so far this year, with 694,000 sq. ft. of signed leases which represents 39% of total activity, while the submarket only comprises 13% of the building inventory. Access to the BWI Airport, Fort Meade and the NSA Headquarters makes the area attractive, especially to government contractors. The Corridor’s 12.1% vacancy is lower than any other submarket, and 440 basis points lower than the market overall vacancy. With the proposed defense budget for FY2022 expected to increase—including for cybersecurity, R&D, and technology—the Baltimore region is poised for continued growth in the coming months as a new normal emerges post-pandemic.