Baltimore Office Market
| Average Asking Rent (Price/SF) | $24.13 |
| Vacancy Rate (%) | 13.7% |
| Net Absorption (SF) | -128,943 |
The Baltimore metro area’s office market continued to soften in the fourth quarter of 2020, as occupancy losses steadily mount and drive increased vacancy in most major submarkets. Market softening has become the expectation amid the pressures induced by the ongoing pandemic. Baltimore’s office occupancy has faced particularly strong pressure since second-quarter 2020. Net absorption in the fourth quarter registered -128,943 square feet, which is comparable to occupancy losses recorded in the second and third quarters. Net absorption for all of 2020 is -349,277 square feet, which is the lowest of the past two market cycles. This contraction in office occupancy over the last three quarters has predictably had a strong influence on the vacancy rate. The overall vacancy rate for Baltimore’s office market was 13.7% at the end of fourth-quarter 2020, up 70 basis points from one year ago. However, advancements regarding the coronavirus vaccine and its distribution began to materialize in the fourth quarter and the vaccine will be rolled out during the first half of 2021, boosting commercial activities and restarting quiet office markets.
Baltimore Industrial Market
| Average Asking Rent (Price/SF) | $5.49 |
| Vacancy Rate (%) | 10.4% |
| Net Absorption (SF) | -301,741 |
Baltimore’s industrial market fundamentals were shaped by the delivery of new product during the fourth quarter of 2020, with negative net absorption and an increased vacancy rate. However, the average asking rent continued to tick up. Vacancy rose by 60 basis points from the previous quarter to 10.4% and is 220 basis points higher than one year ago. A large portion of the increase in vacancy can be attributed to large buildings across the region that have delivered vacant over the past year. Average asking rental rates are 7.0% higher than a year ago, an increase partially driven by the recent top-of-the-market deliveries. The Baltimore industrial market registered -301,741 square feet of net absorption during the fourth quarter, bringing year-to-date absorption to positive 1.2 million square feet. The pandemic has brought disruption to the market but also opportunity, as e-commerce accelerated and modern last-mile distribution space is increasingly in demand. The industrial sector was better insulated from the impacts of the pandemic than many other property types but has still seen job losses this year.