real estate outlook Baltimore office market...2 REAL ESTATE OuTLOOk Baltimore office market Q4 2015 BaltiMORe Office MaRket FOuRT QuARTER 2015 office VAcAncy AnD DemAnD Net absorption

Real estate OutlOOk

Baltimore office marketfourth Quarter 2015

The Baltimore metro area office market experienced steady conditions during the fourth quarter, as net absorption was positive 172,000 SF due primarily to a handful of mid-sized deals. During all of 2015, net absorption totaled 1.0 million SF. Given this, the vacancy rate edged down to 10.4%, which is below the 10-year average of 11.5%. Landlords increased asking rents by 1.5% during the year, as the vacancy rate is low enough to justify rent increases. The construction pipeline is tame and holds a healthy pre-lease rate at 59%. We expect fundamentals will improve during 2016 driven by cybersecurity, cloud computing, and health care industries. Improving conditions will be felt more in the suburbs surrounding BRAC-related military bases compared to the Baltimore CBD.

economy

Robust year-over-year job growthPayroll employment increased 33,500 during the 12 months ending October 2015, which is over three times the 20-year annual average of 11,500. Baltimore City took 6,200 or 19% of these new jobs. The education/health sector was the leader in job growth during the past 12 months, adding 7,900 new jobs. Approximately 73% of these jobs were added to the health sub-sector. The trade/transportation/utilities sector followed with 6,200 new jobs, with 66% of these jobs added to the retail sub-sector.

The Baltimore metro area unemployment rate is 5.4% at October 2015, down from 5.7% one year ago. The unemployment rate is below the 10-year average of 6.0%. This compares to the national unemployment rate of 5.0% at October.

We expect the economy to pick up during 2016 and 2017. Through 2019, we expect job growth to average 18,500 per year with the peak of job growth occurring during 2016, but still remaining elevated during 2017. We project the strongest growth to occur in health, education, technology, and food services fields.

Office market steady during Q4 Leasing activity drives net absorption

Office tReNds

10-YEAR TREnd FouRTh QuARTER 2015

Direct VAcAncy

10.4%Vacancy rate edges down

ABSorPtion

1.0 Million sfHealthy absorption YTD

rentAL r AteS

$21.57 PsfAsking rents edging up

UnDer conStrUction

1.8 Million sfGrowing pipeline

JoB GroW tH

33,500 jobsDuring 12-months ending October 2015

2 REAL ESTATE OuTLOOk Baltimore office market Q4 2015

Baltimore office marketFourth Quarter 2015

office VAcAncy AnD DemAnD

Net absorption falls short of 2014 levelThe direct vacancy rate in the Baltimore metro area was 10.4% at December 2015, down 20 basis points from September 2015. This compares favorably to the 10-year average rate of 11.5%.

Baltimore South, which includes the submarkets of Columbia, Route 1 North, BWI, and Anne Arundel South, holds a lower direct vacancy rate at 9.6% at December 2015. This compares to Baltimore North at 10.8%, which is due in part to the elevated vacancy rate in Baltimore CBD and Harford County.

Net absorption totaled positive 172,000 SF during the fourth quarter of 2015 as demand was limited. Net absorption for Class A space totaled positive 45,000 SF during the fourth quarter of 2015, while Class B/C totaled positive 128,000 SF.

Net absorption totaled 1.0 million SF during 2015, which was just below the 1.2 million SF achieved during 2014. This compares to the 10-year average of 1.4 million SF.

The BWI submarket experienced the strongest positive net absorption during the fourth quarter, contributing positive 100,000 SF. One of the bigger deals in the BWI submarket was Teksystems expanding by 12,000 SF at 999 Corporate Boulevard. It is important to note that most of the positive trends in BWI are attributed to the National Business Park, as its vacancy rate is very low at 2.9% at December 2015 while the balance of BWI is 13.4%. The National Business Park is made up almost entirely of government contractors and subcontractors and its proximity to Fort Meade makes it a highly desirable destination for these tenants.

Some other mid-sized deals include the 20,000 SF Advanced Radiology lease at 9409 Philadelphia Road in Baltimore County East and the 17,000 SF CyberReliant lease at 180 Admiral Cochrane Drive in the Anne Arundel South submarket. Notably, during 2015, the tech sector represented the largest share of leasing activity at 30%. We expect continued activity from this sector during 2016, as cybersecurity and cloud computing expand in the Baltimore area.

uNeMPlOYMeNt Rate

PaYROll JOB GROWtH

-4%

-3%

-2%

-1%

0%

1%

2%

3%

06 07 08 09 10 11 12 13 14 15*

UNITED STATES BALTIMORE METRO AREA

BaltiMORe MetRO aRea Office Net aBsORPtiON aNd VacaNcY

6%

7%

8%

9%

10%

11%

12%

13%

14%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

06 07 08 09 10 11 12 13 14 15*

NET ABSORPTION IN MILLIONS DIRECT VACANCY RATE

* At October 2015 SOURCE Bureau of Labor Statistics, Transwestern.

0%

2%

4%

6%

8%

10%

12%

06 07 08 09 10 11 12 13 14 15*

UNITED STATES BALTIMORE METRO AREA

* 12 months ending October 2015 SOURCE Bureau of Labor Statistics, Transwestern.

* At fourth quarter 2015 SOURCE CoStar, Transwestern.

REAL ESTATE OuTLOOk Baltimore office market Q4 2015 3


office SUPPLy AnD DeVeLoPment

Well pre-leased pipeline due to deliver in 2016There were no deliveries during the last three months. During 2015, deliveries totaled 912,000 SF and came online at 72% pre-leased.

There is 1.8 million SF of office space under construction or renovation at December 2015. Projects are 59% pre-leased, above the 10-year average pre-lease rate of 47%. All pipeline projects are currently on pace to deliver during 2016. The Balance of Baltimore City submarket has the greatest amount of space under construction, totaling 821,000 SF in the pipeline at 88% pre-leased. This is highlighted by 477,000 SF at 100 Block Street currently being constructed for Exelon.

office ProJecteD SUPPLy VS. DemAnD

Vacancy rate to declineWe project the overall Baltimore metro area office vacancy rate to decline to the low-9% range by December 2017, from 10.6% today. Demand will be boosted by pre-leased deliveries and from the growing cyber security field. We project the vacancy rate in the Baltimore metro area will decline steadily, as demand gradually rises and construction is held in check.

office rentAL r AteS

Asking rents rise 1.5% during 2015The average rental rate in the Baltimore metro area increased to $21.57 PSF during the fourth quarter, a 1.5% rise from year-end 2014. Class A office rents averaged $24.68 PSF, while Class B/C rents averaged $20.33 PSF. Baltimore South holds a higher asking rate at $23.81 PSF at December 2015, compared to Baltimore North at $20.65 PSF.

We expect asking rents to rise 2.0% to 2.5% during 2016, as the vacancy rate continues to decline.

BaltiMORe MetRO aRea Office askiNG ReNtal Rates

$10

$12

$14

$16

$18

$20

$22

$24

$26

$28

06 07 08 09 10 11 12 13 14 15*

CLASS A CLASS B/C


BaltiMORe MetRO aRea Office deVelOPMeNt PiPeliNe MILLION SF

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

06 07 08 09 10 11 12 13 14 15 16*

COMPLETED UNDER CONSTRUCTION PRE-LEASED UNDER CONSTRUCTION AVAILABLE

* Completed YTD SOURCE CoStar, Transwestern.

4 REAL ESTATE OuTLOOk Baltimore office market Q4 2015


office inVeStment mArKet

Investment sales rise above the 2014 level Investment sales volume totaled $645 million or $156 PSF in the Baltimore metro area. This compares to $634 million in sales closing at $168 PSF during all of 2014. Investors focused capital on Class A and B assets equally, as each class represented 50% of the total sales volume in 2015. Not surprisingly, 59% of the total capital YTD was focused on assets located in highly walkable neighborhoods with access to transportation, retail, and other amenities.

The most notable deal during the fourth quarter of 2015 was when True North Management Group purchased 1 South Street for $64.3 million or $134 PSF in the Baltimore CBD submarket. This asset is 89% leased. We expect investment sales to increase during 2016 as investors chase yield.

office mArKet oUtLooK

Improving conditions projected in 2016 We expect the Baltimore metro area office market to improve during 2016. With a controlled pipeline that is well pre-leased and rising demand, we expect the vacancy rate will decline to the low-9% range by year-end 2017. As the vacancy rate declines, asking rents should rise 2.0% to 2.5% during 2016. n

Baltimore Metro Area Office Market Indicators

suBMaRket iNVeNtORYuNdeR

cONstRuctiONQ4 Net

aBsORPtiON2015 Net

aBsORPtiONdiRect

VacaNcYsuBlease

sPaceOVeRall

VacaNcYaVeRaGeRate Psf

Harford County 3,668,302 99,000 15,000 33,000 20.9% 0.1% 21.0% $22.47

Baltimore County West 13,059,476 223,600 (39,000) 13,000 11.1% 0.2% 11.3% $20.52

Baltimore County North 16,297,276 45,000 65,000 224,000 9.1% 0.1% 9.2% $20.98

Baltimore County East 2,782,972 108,790 11,000 70,000 10.4% 0.2% 10.6% $19.18

Baltimore CBD 20,786,551 0 (42,000) (249,000) 12.7% 0.0% 12.7% $20.33

Balance of Baltimore City 20,119,565 821,456 (20,000) 132,000 8.3% 0.2% 8.5% $20.38

Baltimore county North 76,714,142 1,297,846 (10,000) 223,000 10.8% 0.1% 10.9% $20.65

Columbia 15,130,849 330,900 45,000 319,000 7.5% 0.4% 7.9% $23.58

Route 1 North 1,145,773 0 1,000 (15,000) 11.9% 1.6% 13.5% $20.35

BWI 11,111,990 100,000 100,000 373,000 10.0% 0.2% 10.2% $24.47

Anne Arundel South 7,201,279 65,424 36,000 106,000 12.9% 0.2% 13.1% $23.89

Baltimore county south 34,589,891 496,324 182,000 783,000 9.6% 0.3% 9.9% $23.82

total 111,304,033 1,794,170 172,000 1,006,000 10.4% 0.2% 10.6% $21.57

SOURCE CoStar, Transwestern.

Copyright © 2016 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

BALTimoRE oFFicE mARkETfourth Quarter 2015

t 443.285.0770www.transwestern.com

7160 Columbia Gateway Drive, Suite 210Columbia, Maryland 21046

Baltimore Metro Area Office Market Indicators

PROPeRtY class iNVeNtORYuNdeR

cONstRuctiONQ4 Net

aBsORPtiON2015 Net

aBsORPtiONdiRect

VacaNcYsuBlease

sPaceOVeRall


Class A 35,301,882 1,498,356 45,000 696,000 9.7% 0.2% 9.9% $24.68

Class B/C 76,002,151 295,814 128,000 186,000 10.7% 0.2% 10.9% $20.33

total 111,304,033 1,794,170 172,000 1,006,000 10.4% 0.2% 10.6% $21.57


Baltimore Metro Area Office Market Notable Lease Transactions

teNaNt deal tYPe addRess suBMaRket sQuaRe feet

BAE Systems Renewal 6315 Hillside Court Columbia 25,000

Advanced Radiology New Lease 9409 Philadelphia Road Baltimore County East 20,000

CyberReliant New Lease 180 Admiral Cochrane Drive Anne Arundel South 17,000

International Youth Foundation New Lease 1 E. Pratt Street Baltimore CBD 17,000

Teksystems, Inc. New Lease 999 Corporate Boulevard BWI 12,000

TEDCO New Lease 7021 Columbia Gateway Drive Columbia 12,000

CalAtlantic Group, Inc. New Lease 9710 Patuxent Woods Drive Columbia 11,000

SOURCE CoStar, County Newsletters, Baltimore Business Journal, Transwestern.

Baltimore Metro Area Office Market Construction Activity

suBMaRket sQuaRe feet uNdeR cONstRuctiON PeRceNt PRe-leased

Harford County 99,000 89%

Baltimore County West 223,600 0%

Baltimore County North 45,000 100%

Baltimore County East 108,790 2%

Balance of Baltimore City 821,456 88%

Columbia 330,900 56%

BWI 100,000 0%

Anne Arundel South 65,424 13%

total 1,794,170 59%


MetHOdOlOGY

The information in this report is the result of a compilation of information on office properties located in the Baltimore metro area. This report includes single-tenant, multi-tenant and owner-user office properties 15,000 SF and larger, excluding properties owned by a government agency.

cONtact

Elizabeth NortonManaging Research Director | Mid-Atlantic [email protected]

Ben FishResearch Associate | Mid-Atlantic [email protected]

Real estate OutlOOk

The Baltimore metro area flex/industrial market experienced strong conditions during the fourth quarter of 2015, as the direct vacancy rate decreased 20 basis points and net absorption was positive 1.0 million SF due to several tenants leasing large blocks of space. Due to these conditions, landlords increased asking rents by 2.0% during the past three months and 3.5% during all of 2015. The age of the current inventory suggests future ground breakings, as tenants are showing preference for newer product with efficient floor plates and adequate loading docks. We expect continued growth in the Baltimore flex/industrial market during 2016.

economy

Robust year-over-year job growthPayroll employment increased 33,500 during the 12 months ending October 2015, which is over three times the 20-year annual average of 11,500. Baltimore City took 6,200 or 19% of these new jobs. The education/health sector was the leader in job growth during the past 12 months, adding 7,900 new jobs. Approximately 73% of these jobs were added to the health sub-sector. The trade/transportation/utilities sector followed with 6,200 new jobs, with 66% of these jobs added to the retail sub-sector.

The Baltimore metro area unemployment rate is 5.4% at October 2015, down from 5.7% one year ago. The unemployment rate is below the 10-year average of 6.0%. This compares to the national unemployment rate of 5.0% at October.

We expect the economy to pick up during 2016 and 2017. Through 2019, we expect job growth to average 18,500 per year with the peak of job growth occurring during 2016, but still remaining elevated during 2017. We project the strongest growth to occur in health, education, technology, and food services fields.

Flex/Industrial rebounds in Q4Large lease deals drive net absorption

flex/iNdustRial tReNds

10-YEAR TREnd FouRTh QuARTER 2015

Direct VAcAncy

8.7%Vacancy rate up in 2015

ABSorPtion

563,000 sfPre-leased deliveries drive absorption

rentAL r AteS

$5.98 PsfAsking rents rise 3.5% during 2015

UnDer conStrUction

1.3 Million sfPipeline will deliver in 2016

JoB GroW tH

33,500 jobsDuring 12-months ending October 2015

Baltimore flex/industrial marketfourth Quarter 2015

BALTimoRE FLEx/indusTRiAL mARkETfourth Quarter 2015

2 REAL ESTATE OuTLOOk Baltimore flex/industrial market Q4 2015

fLeX /inDUStriAL VAcAncy AnD DemAnD

Robust market conditions during Q4The direct vacancy rate in the Baltimore metro area was 8.7% at December 2015, down from 8.9% the quarter prior. This compares favorably to the 10-year historical average of 9.1%. Flex/warehouse has the lowest vacancy rate among the three product types at 7.1%, down 20 basis points from third quarter.

Net absorption totaled positive 1.0 million SF in the Baltimore metro area during the fourth quarter of 2015, well above the 10-year quarterly average absorption of positive 406,000 SF. Even after a weak third quarter of negative 419,000 SF, net absorption has totaled positive 563,000 SF during 2015. This compares to the 10-year annual absorption average of 1.6 million SF.

The Route 1 North submarket contributed the strongest positive net absorption during the fourth quarter, accounting for positive 369,000 SF. This was due in large part to AEX Group signing for 112,000 SF at 7951 Oceano Drive as well Hills Pet Nutrition leasing 65,000 SF at 6745 Business Parkway. The delivery of 7775 South Chesapeake Bay Court to MP Seafood Ventures also contributed positive 88,000 SF. The Harford County submarket experienced the weakest quarter as net absorption was negative 145,000 SF, which was driven by Pier 1 Imports vacating 349,000 SF at 400 Old Post Road but offset slightly by Natural Animal Nutrition leasing 121,000 SF at 151 Bata Boulevard.

fLeX /inDUStriAL SUPPLy AnD DeVeLoPment

Pipeline tame with healthy pre-lease rate Four projects delivered during the fourth quarter of 2015 totaling 1.1 million SF at 17% pre-leased. Notably, Chesapeake Real Estate Group delivered 571,500 SF at 610 Chelsea Road in Harford County and Redgate Real Estate Advisors delivered 300,000 SF at 4803 Hollins Ferry Road in the Baltimore County West submarket. Both projects delivered vacant. During 2015, 2.5 million SF of flex/industrial space has delivered at 31% pre-leased.

BaltiMORe MetRO aRea flex/iNdustRial Net aBsORPtiON aNd VacaNcY

BaltiMORe MetRO aRea flex/iNdustRial askiNG ReNtal Rates

BaltiMORe MetRO aRea flex/iNdustRial deVelOPMeNt PiPeliNe MILLION SF

4%

5%

6%

7%

8%

9%

10%

11%

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

06 07 08 09 10 11 12 13 14 15*

NET ABSORPTION IN MILLIONS DIRECT VACANCY RATE

$0

$2

$4

$6

$8

$10

$12

$14

06 07 08 09 10 11 12 13 14 15*

BULK WAREHOUSE FLEX/WAREHOUSE FLEX/R&D

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

06 07 08 09 10 11 12 13 14 15 16*

COMPLETED UNDER CONSTRUCTION PRE-LEASED UNDER CONSTRUCTION AVAILABLE



* Completed YTD SOURCE CoStar, Transwestern.


REAL ESTATE OuTLOOk Baltimore flex/industrial market Q4 2015 3

Projects under construction or renovation total 1.3 million SF at December 2015. The pipeline is currently 44% pre-leased, which is above the 10-year average pre-lease rate of 27%. All pipeline projects are due to deliver during 2016. Baltimore City has the greatest amount of space under construction, with two projects totaling 576,000 SF. They are located at 5300 Holabird Avenue and 1921 62nd Street and are 496,000 SF and 80,000 SF respectively. As of December 2015, they have no tenants in place.

Tenants are in the market for upgraded space with a focus on efficient building design and site layout, which includes better trailer loading, clear heights, column spacing, and parking. As a result, we anticipate spec construction to ramp up to satisfy the undersupply of upgraded space during 2016.

fLeX /inDUStriAL ProJecteD SUPPLy VS. DemAnD

Overall vacancy rate to decline We project the overall vacancy rate will decline in the Baltimore metro area flex/industrial market from 8.8% today to the high-7% range by December 2016. We expect leasing activity to pick up pace and pre-leased deliveries will add a slight boost to net absorption.

fLeX /inDUStriAL rentAL r AteS

Asking rents rise 3.5% during 2015Flex/industrial asking rents increased 2.0% during the last three months to $5.98 PSF. During all of 2015, asking rents increased 3.5%, compared to declining 1.2% during 2014. Flex/warehouse experienced the greatest rise in rent at 5.1% during 2015, followed by bulk warehouse rising 3.3%. We expect asking rents to rise 3.0% to 3.5% during 2016.

fLeX /inDUStriAL inVeStment mArKet

Investment activity slightly off pace compared to 2014Investment sales totaled $443 million or $61 PSF in the Baltimore metro area during 2015. This compares to $552 million in sales recorded at $79 PSF during all of 2014.

The Route 1 Corridor accounted for 34% of the total sales volume in 2015, followed by Harford County at 21%. In addition, investors focused capital on bulk warehouse assets, representing 59% of the total investment sales volume.

The most notable deal during the fourth quarter of 2015 was First Industrial Realty Trust’s purchase of two bulk warehouse properties at 400 & 500 Old Post Road in Harford County for $61.9 million or $62 PSF. In addition, Lion Industrial Trust bought a bulk warehouse at 6650 Business Parkway in the Route 1 North submarket for $15.3 million or $98 PSF.

We expect the investment sales market to pick up pace during 2016, as flex/industrial market fundamentals improve.

fLeX /inDUStriAL mArKet oUtLooK

Demand and rents projected to riseWe expect demand for flex/industrial product in the Baltimore metro area to rise during 2016. As demand increases, we expect the vacancy rate to decline to the high-7% range by year-end 2016. We anticipate spec ground breakings during 2016 as market conditions improve, driven by demand for newer space. As the vacancy rate declines, we expect asking rents to rise 3.0% to 3.5% during 2016. n

Baltimore flex/industrial marketFourth Quarter 2015

4 REAL ESTATE OuTLOOk Baltimore flex/industrial market Q4 2015

Baltimore Metro Area Flex/Industrial Market Indicators

suBMaRket iNVeNtORYuNdeR

cONstRuctiONQ4 Net

aBsORPtiON2015 Net

aBsORPtiONdiRect

VacaNcYsuBlease

sPaceOVeRall


Bulk Warehouse 16,573,845 0 (110,000) 162,000 10.0% 0.0% 10.0% $4.94

Flex/Warehouse 6,466,216 0 (33,000) (84,000) 4.7% 0.0% 4.7% $8.37

Flex/R&D 518,210 0 (2,000) 52,000 16.8% 0.0% 16.8% $10.15

Harford county 23,558,271 0 (145,000) 131,000 8.7% 0.0% 8.7% $5.99

Bulk Warehouse 3,260,056 0 15,000 33,000 11.0% 0.0% 11.0% $4.26

Flex/Warehouse 12,902,243 0 26,000 158,000 7.3% 0.2% 7.5% $6.27

Flex/R&D 3,001,887 0 (51,000) 6,000 14.2% 0.5% 14.7% $10.47

Baltimore county West 19,164,186 0 (10,000) 198,000 9.0% 0.2% 9.2% $6.59

Bulk Warehouse 1,169,658 0 37,000 (13,000) 7.5% 0.0% 7.5% $5.79

Flex/Warehouse 7,899,634 0 9,000 37,000 1.9% 0.0% 1.9% $11.88

Flex/R&D 1,507,350 0 (15,000) 8,000 7.3% 0.0% 7.3% $10.50

Baltimore county North 10,576,642 0 32,000 32,000 3.3% 0.0% 3.3% $11.01

Bulk Warehouse 14,185,242 120,000 326,000 600,000 19.8% 0.0% 19.8% $4.08

Flex/Warehouse 14,272,459 306,016 (26,000) (8,000) 3.9% 0.0% 3.9% $2.98

Flex/R&D 670,966 40,080 (9,000) 87,000 6.9% 0.0% 6.9% $7.44

Baltimore county east 29,128,667 466,096 291,000 679,000 11.7% 0.0% 11.7% $3.62

Bulk Warehouse 10,905,560 0 33,000 (16,000) 4.5% 0.0% 4.5% $4.75

Flex/Warehouse 40,507,022 576,000 196,000 (1,309,000) 9.1% 0.0% 9.0% $4.45

Flex/R&D 1,279,787 0 17,000 55,000 8.2% 0.8% 9.0% $7.24

Baltimore city 52,692,369 576,000 245,000 (1,270,000) 8.1% 0.0% 8.1% $4.58

Bulk Warehouse 2,776,253 0 36,000 133,000 4.8% 0.0% 4.8% $7.15

Flex/Warehouse 7,386,375 0 92,000 142,000 9.0% 0.1% 9.2% $8.87

Flex/R&D 3,165,250 0 (69,000) (110,000) 8.0% 0.1% 8.1% $12.60

columbia 13,327,878 0 59,000 165,000 7.9% 0.1% 8.0% $9.40

Bulk Warehouse 17,306,362 219,400 208,000 172,000 11.5% 0.4% 11.9% $5.78

Flex/Warehouse 11,131,000 0 149,000 26,000 6.1% 0.2% 6.2% $6.74

Flex/R&D 536,163 0 12,000 23,000 5.0% 0.0% 5.0% $9.63

Route 1 North 28,973,525 219,400 369,000 221,000 9.3% 0.3% 9.6% $6.22

Bulk Warehouse 12,918,980 0 112,000 215,000 8.9% 0.0% 8.9% $6.02

Flex/Warehouse 12,958,745 0 24,000 218,000 8.9% 0.3% 9.2% $5.14

Flex/R&D 2,311,489 0 16,000 (44,000) 12.6% 0.7% 13.3% $7.82

BWi 28,189,214 0 153,000 389,000 9.2% 0.2% 9.4% $5.76

Bulk Warehouse 163,727 0 0 0 0.0% 0.0% 0.0% N/A

Flex/Warehouse 3,284,088 0 (3,000) 28,000 3.8% 0.0% 3.8% $12.49

Flex/R&D 1,028,437 0 12,000 (10,000) 10.5% 0.0% 10.5% $15.41

anne arundel south 4,476,252 0 9,000 18,000 5.2% 0.0% 5.2% $13.18

Bulk Warehouse 79,259,683 339,400 657,000 1,286,000 10.9% 0.1% 11.0% $5.18

Flex/Warehouse 116,807,782 882,016 434,000 (792,000) 7.1% 0.1% 7.1% $5.99

Flex/R&D 14,019,539 40,080 (89,000) 67,000 10.4% 0.3% 10.7% $10.40

total 210,087,004 1,261,496 1,003,000 563,000 8.7% 0.1% 8.8% $5.98



Copyright © 2016 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Transwestern from CoStar and other primary and secondary sources believed to be reliable. Transwestern, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

MetHOdOlOGY

The information in this report is the result of a compilation of information on flex/industrial properties located in the Baltimore metro area. This report includes single-tenant, multi-tenant and owner-user office properties 15,000 SF and larger, excluding properties owned by a government agency.

cONtact

Elizabeth NortonManaging Research Director | Mid-Atlantic [email protected]

t 443.285.0770www.transwestern.com

7160 Columbia Gateway Drive, Suite 210Columbia, Maryland 21046

Baltimore Metro Area Flex/Industrial Market Indicators

PROPeRtY tYPe iNVeNtORYuNdeR

cONstRuctiONQ4 Net

aBsORPtiON2015 Net

aBsORPtiONdiRect

VacaNcYsuBlease

sPaceOVeRall


Bulk Warehouse 79,259,683 339,400 657,000 1,286,000 10.9% 0.1% 11.0% $5.18

Flex/Warehouse 116,807,782 882,016 434,000 (792,000) 7.1% 0.1% 7.1% $5.99

Flex/R&D 14,019,539 40,080 (89,000) 67,000 10.4% 0.3% 10.7% $10.40

total 210,087,004 1,261,496 1,003,000 563,000 8.7% 0.1% 8.8% $5.98


Baltimore Metro Area Flex/Industrial Market Notable Lease Transactions

teNaNt deal tYPe addRess suBMaRket sQuaRe feet

Sephora Renewal 4622 Mercedes Drive Harford County 317,000

G. Cefalu & Bro, Inc. Pre-lease 7540 Assateague Drive Route 1 North 160,000

Natural Animal Nutrition New Lease 151 Bata Boulevard Harford County 121,000

AEX Group New Lease 7951 Oceano Drive BWI 112,000

Max Finkelstein Inc. New Lease 1425 Magellan Road BWI 94,000

Harmon Glass New Lease 1904 Park 100 Drive BWI 80,000

Bell Nursery Holdings Renewal 7111 Troy Hill Drive Route 1 North 68,000

SOURCE CoStar, County Newsletters, Baltimore Business Journal, Transwestern.

Baltimore Metro Area Flex/Industrial Market Construction Activity

suBMaRket sQuaRe feet uNdeR cONstRuctiON PeRceNt PRe-leased

Baltimore County East 466,096 71%

Baltimore City 576,000 0%

Route 1 North 219,400 100%

total 1,261,496 44%


Ben FishResearch Associate | Mid-Atlantic [email protected]

Documents

real estate outlook Baltimore office market...2 REAL ESTATE OuTLOOk Baltimore office market Q4 2015 BaltiMORe Office MaRket FOuRT QuARTER 2015 office VAcAncy AnD DemAnD Net absorption