Market Reports

Why Multifamily Investors Need to Take a Deeper Dive Into Charm City

by John Nelson May 6, 2024

By Christine Espenshade of Newmark Baltimore is an often-overlooked gem of a city along the Northeast Corridor between Washington, D.C., and New York City. This waterfront town is home to two major sports teams, a world-class symphony and art museums that rival those in the best cities around the world. Baltimore is more often referenced as the location for various crime TV shows rather than being known as home to two of the top medical facilities in the world — Johns Hopkins Hospital and the University of Maryland Medical System — Johns Hopkins University, and headquarters for famous companies such as Under Armour, T. Rowe Price and McCormick Spices. The multifamily market in Baltimore is also often overlooked by investors in favor of larger cities. However, to spur the development of top-quality rental products, Baltimore City and Baltimore County offer lucrative property tax abatements for new developments. The region continually sees consistent population growth due to the “eds and meds” nature of the economy, and the lower cost of living when compared to D.C. or Philadelphia attracts a well-educated workforce looking to enjoy the live-work-play lifestyle. The popularity of Baltimore for employers and employees is evident when considering the 35,000 …

May 6, 2024

Market Reports Maryland Mixed-Use Retail Southeast Southeast Market Reports

Adaptive Reuse Projects, Value-Oriented Concepts Star in Baltimore’s Retail Story

by John Nelson April 29, 2024

Mirroring sentiments expressed at the year-end ICSC conference in New York City, with the national vacancy rate hovering around 5 percent and new concepts anxious to take a foothold in the area, there continues to be tremendous optimism for the retail sector in the greater Baltimore metropolitan region. Although ground-up development projects remain rare locally, several high-profile adaptive projects are in the works that are placing smiles on brokers’ faces because they have something to lease. Value-oriented retailers, together with quick-service restaurant (QSR) concepts, are showing the most activity. Adaptive reuse The redevelopment of the iconic Harborplace festival marketplace (more on that later) is grabbing all the headlines in Charm City, but the adaptive reuse of Baltimore’s Penn Station — the epitome of a transit-oriented development and the renovation of a historic industrial building at Riverside in South Baltimore — are happening now. Beatty Development Group and Cross Street Partners are partnering with Amtrak to transform the train station originally developed in 1911 into a mixed-use project combining 1 million square feet of commercial office, retail and residential space. Destination retail and restaurants are a central core of the program. Urban Pastoral and The Wilhide Family are transforming the 135-year-old …

April 29, 2024

Industrial Market Reports Maryland Southeast Southeast Market Reports

Despite Industrial Market Slowdown in Baltimore, Industry Pros Remain Optimistic

by John Nelson February 5, 2024

While there has been a discernible dip in the volume of industrial leasing activity occurring in the greater Baltimore metropolitan area this past year, optimism remains high among owners and investors of this asset class given the diminishing volume of new product under construction, the still low 7.4 percent overall vacancy rate, record high — yet stabilizing — average asking rents of $10.54 per square foot net and the fact that 10 million people are not likely to soon move away from the Baltimore-Washington, D.C. corridor, the fourth-largest combined metropolitan statistical area in the country. Oh yes, spirits remain high following the Baltimore Orioles’ underdog ride to the top of the American East standings this summer. Never underestimate the power of a professional sports franchise to energize an entire region. The metro Baltimore industrial market consists of more than 3,600 buildings, totaling more than 266 million square feet of space that includes flex and industrial Class A, B and C buildings. Year-to-date, the market has yielded negative absorption of approximately 1 million square feet of space, including nearly 300,000 square feet this past quarter. The bad news of GXO Logistics shuttering a 571,000-square-foot distribution center in Harford County and laying …

February 5, 2024

Industrial Market Reports Maryland Southeast Southeast Market Reports

Reports of Industrial, Warehouse Slowdown in Baltimore Are Greatly Exaggerated

by John Nelson May 8, 2023

National headlines report Amazon, arguably the largest warehouse user in the country, curtailing demand and, in some cases returning space back to landlords. This is sandwiched by stories detailing rising interest rates and land prices, stricter entitlement guidelines and NIMBYs working to apply the brakes on new developments. But, in “The Land of Pleasant Living,” (a Baltimore nickname made popular by the smart advertising of a local beer), the industrial revolution continues. And, for good reason. More than 2.3 million square feet of industrial/warehouse space was leased in the greater Baltimore metropolitan region in fourth-quarter 2022, with a net absorption of more than 1.2 million square feet of space, contributing to an overall vacancy rate of 4.5 percent. Additionally, more than 13 million square feet of space is currently under construction and rents have soared more than 50 percent over the past two years, with an average rent of just under $8 per square foot in late 2022. Significant leases signed in fourth-quarter 2022 included Baltimore International Warehousing & Transportation’s 244,304-square-foot lease at 5250-5330 Holabird Ave.; Amazon’s 241,962-square-foot lease at 1713 E. Patapsco Ave. and the 168,655-square-foot lease executed by Transdev at 1610 Wicomico St. Baltimore is contained within …

May 8, 2023

Market Reports Maryland Retail Southeast Southeast Market Reports

Baltimore’s Retail Market Is Showing Resiliency Post-Pandemic

by John Nelson May 1, 2023

Retail is not dead. In fact, coming out of COVID-19, retail is arguably the strongest that it’s been in many years. According to S&P Global Market Intelligence data, in 2022 we saw a 13-year low in retail companies filing for bankruptcy. Here in Baltimore, we’re seeing extremely low vacancy rates and steady demand, which in turn, is cultivating a competitive environment. However, despite the challenges that retail has faced over the past several years, its resilience is where we continue to find plenty of reasons to be optimistic. A look back In March 2020, the phones stopped ringing and businesses shuttered for what was anticipated to be a few short weeks. We soon came to find that was not the case. Retail did struggle, significantly in some cases. Restaurants, service-based businesses, soft goods, fitness, entertainment and experiential concepts amongst many others, whether large corporate-owned or mom-and-pop users, struggled to stay afloat. And many did fail. Space came back on the market and concepts dwindled at an uncanny pace. But the so-called “retail apocalypse” — a common phrase that was originally coined because of the increased popularity of e-commerce — was, again, proved to be hyperbole. Retailers sought ways to enhance …

May 1, 2023

Market Reports Maryland Office Southeast Southeast Market Reports

Slowdown in Leases, Development Help Baltimore Office Market to Rightsize

by John Nelson April 24, 2023

Unprecedented development is underway across the Baltimore metro area with more than $6.6 billion of infrastructure and major development projects in the pipeline, and office-using employment remains strong. More than 574,000 people are employed in a diverse set of employment sectors that require offices, including professional and business services, government, financial services and tech and information. The past year, unemployment fell in each Maryland submarket, with Baltimore dropping 140 basis points, which is similar to the national unemployment rate that decreased 150 basis points. In the second half of last year, several public sector agencies relocated into the Central Business District (CBD) from Midtown and Mount Vernon locations, pushing net absorption positive and vacancy negative. This helped state and local government tenants lead all sectors in leasing activity in the fourth quarter of 2022, accounting for 56 percent of all leases signed. The Maryland Department of Health signed the largest lease of the quarter with its new 463,000-square-foot lease at 300 N. Greene St. Other State of Maryland relocations include Department of Labor, Office of the Comptroller, Department of Budget & Management, Department of Planning and Department of Aging. Combined, these state government tenants leased 761,000 square feet in the …

April 24, 2023

Affordable Housing District of Columbia Market Reports Maryland Multifamily Southeast Southeast Market Reports Virginia

More Affordable Housing Options Needed in Greater D.C. Region, Says Fossi of Enterprise Community Development

by John Nelson February 1, 2023

WASHINGTON, D.C. — In 2019, the Metropolitan Washington Council of Governments issued a report stating that the D.C. region — comprising the city, Northern Virginia and suburban Maryland — needed to add 320,000 more housing units between 2020 and 2030, and that at least 75 percent of this new housing should be affordable to low- and medium-income households. Rob Fossi, senior vice president of real estate development at Enterprise Community Development, says the figure has only climbed in recent years due to macroeconomic and local challenges. “In the three years since that report was issued, this demand has only intensified while supply chain interruptions, interest rate spikes and competing resource challenges precipitated by the COVID-19 pandemic have all been challenges to maintain pace,” says Fossi. Enterprise Community Development, an affiliate of Enterprise Community Partners, is the top nonprofit owner and developer of affordable homes in the Mid-Atlantic with a portfolio spanning about 13,000 apartments that house more than 22,000 residents. The firm is actively developing and preserving affordable housing across the region in order to address the demand, which Fossi says shows no signs of abating anytime soon. “There is little doubt that the demand for quality affordable housing will …

February 1, 2023

District of Columbia Market Reports Maryland Restaurant Retail Southeast Southeast Market Reports Virginia

Grocery Chains and Other Retail Categories are Making Hay in Mid-Atlantic Region

by John Nelson January 11, 2022

The Washington, D.C., and Baltimore markets, when combined, represent the fourth-largest metropolitan region in the nation by population, and retailers are taking notice again. Grocery-anchored projects are the most prevalent in the headlines. For example, the first of nearly 20 Amazon Fresh locations has opened in the area. Additionally, Wegmans’ smaller format rollout plan is active with its first location in Stonebridge’s Carlyle Crossing in Alexandria opening spring 2022, along with Roadside Development’s City Ridge Project at the former Fanny Mae Headquarters in Northwest D.C. Former Shoppers Food Warehouse boxes also continue to get absorbed by new grocers. A less-covered sector of the grocery market is the international markets category, which remains very active in the region. There are 29 different banners across the region that exceed 10,000 square feet in size, with the newest entrant being Oh! Markets in Northern Virginia. Other international market newcomers, including 99Ranch and Enson Market, are also searching for space. With the immense ethnic diversity of the region, we expect investors to start taking notice of this sector with their acquisition appetite, just as they have in other regions like Texas and Florida. Publix, a customer favorite, is in the early stages of identifying …

January 11, 2022

Market Reports Maryland Office Southeast Southeast Market Reports

Maryland Governor Hogan’s Good News for Baltimore’s CBD, Demand Rises for Mental Health Space

by John Nelson June 21, 2021

Among Maryland’s hardest hit submarkets the past 12 months is the Baltimore Central Business District (CBD), where the vacancy rate has risen to 16 percent, according to CoStar Group. Notable departures from companies such as T. Rowe Price and Legg Mason have accelerated during the pandemic due to aging infrastructure and rising crime, coupled with the expansion of sexy nearby submarkets, Inner Harbor East and Harbor Point. Combined these factors have stressed property owners and businesses trying to survive. Downtown restaurants in particular have suffered even more from the double whammy of the area’s rising pre-pandemic vacancies followed by the crushing hit from the spread of COVID-19 and government shutdowns. State government swoops in But Baltimoreans just received some good news from Maryland Gov. Larry Hogan that is sure to spur economic and social revitalization of its CBD. Over time the State of Maryland will be relocating 12 agencies and approximately 3,300 employees to available properties throughout the CBD from an aging Midtown office complex known as State Center. The first agency on the move will be the Department of Human Services (DHS), which has an RFP out for approximately 105,000 square feet of office space. The Department of Health …

June 21, 2021

Market Reports Maryland Multifamily Single-Family Rental Southeast Southeast Market Reports

Baltimore’s Stable Apartment Market Attracts New, Returning Buyers

by John Nelson June 14, 2021

Consistent with much of the nation, the Mid-Atlantic region locked down at the onset of the COVID-19 pandemic in March 2020. However, by late August 2020 and throughout the first quarter of 2021, activity in the multifamily asset class picked up considerably. As operations stabilized and investors could better determine valuations, regional transaction volume quickly heated up as investors returned with pent-up demand. Aided in part by the continued government stimulus and rent regulation in the Mid-Atlantic, Baltimore’s durable “meds and eds” employment bases, anchored by the life sciences, medical, higher education and technology sectors, bolstered the region’s stability. The Baltimore multifamily market has performed in-line with comparable metropolitan areas in the Mid-Atlantic, with flat to moderate rent growth. Rents are expected to stagnate or struggle in response to heightened development occurring in Downtown Baltimore, Owings Mills and Towson, and the new supply may surpass demand in the near-term. Despite muted rent growth projections, transaction volume has returned with an expanded pool of multifamily investors, driving cap rates down and valuations up. Shifting east “Charm City” boasts blue-chip Downtown employers such as T. Rowe Price, Pandora, University of Maryland Medical Center, Johns Hopkins Hospital and Under Armour. In theory, this …

June 14, 2021

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