CBRE: Industrial Sector Hits Baltimore Market High Note
Industrial sales in the Baltimore market in 2012 are on a path to exceed sales from the previous year by 20 percent.
Although deferred federal action on sequestration will continue to drive an inclination toward short-term lease agreements, quarterly research released by CBRE Group also reports the first new industrial deliveries to the market in almost two years.
“With strong sales and a high rate of lease renewals, the industrial sector remains a bright spot in an otherwise hesitant market environment," said Chip Olsen, Senior Managing Director for CBRE’s Baltimore office. "We’re likely to see a continuation of users holding onto their cash longer and deals sometimes taking up to a year to execute,”
The overall vacancy rate in the Baltimore industrial market increased from 10.3 to 11.1 percent, largely due to move-outs by bulk users such as Giant Food, Signode, and Walgreens, and the delivery of a 692,000-square-foot speculative building at 521-A Chelsea Boulevard in Harford County, which was not preleased.
Yet the outlook remains optimistic because of new leases and expansions by larger warehouse users like Recall Total Information Management, AFP, Sleepy’s and Proctor & Gamble. A second 600,000-square-foot Restoration Hardware expansion site entered the market at 4000 Principio Parkway.
New users actively touring the Baltimore industrial market include bulk retailers like Kenco, Home Depot, and Sephora, who are seeking as much as 1.4 million square feet of space.
The CBRE Group report finds fourth-quarter capital focused on high quality investment opportunities, with investors demonstrating a willingness to purchase vacant buildings in anticipation of higher rents.
For the complete fourth quarter 2012 reports detailing the state of office leasing and industrial markets throughout the Greater Baltimore Region, go to http://www.cbre.com/USA/Research.
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