8/2/2019 Baltimore AMERICAS Market Beat Industrial Q12012 (1)

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Cushman & Wakefield of Maryland, Inc.500 East Pratt Street, Suite 500

Baltimore, MD 21202www.cushmanwakefield.com/knowledge

The market terms and definitions in this report are based on NAIOP standards. No warranty or representation, express or implied, is made to the accuracy orcompleteness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawalwithout notice, and to any special listing conditions imposed by our principals.

© 2012 Cushman & Wakefield, Inc. All rights reserved.

ECONOMIC OVERVIEW

According to the Bureau of Labor Statistics, a

total of 120,000 jobs were created in March

2012. The national unemployment rate, at 8.2%,

decreased 0.1 percentage points from February

2012. Although recent job growth figures fell

short of market expectations, the overall steady improvements in the

labor market continued to increase consumer confidence as

consumer spending has ticked up in recent months. The preliminary

unemployment rate for Maryland was 6.5% in February 2012, flat

from January 2012. However, the state has added a total of 47,000 jobs from February 2011 to 2012 and its unemployment rate

continued to remain below the national rate.

MARKET CONDITIONS AND ACTIVITY STAY STRONG

The Baltimore industrial market in the first quarter of 2012 continued

to perform strongly as its overall vacancy rate, at 9.8%, decreased 1.2

percentage points and its direct asking rental rate, at $4.99 per square

foot (psf), increased 3.7% from the first quarter of 2011. Year-to-date

overall net absorption was positive at 1.0 million square feet (msf)

with positive absorption concentrated in the Corridor markets. The

I-95 North Corridor had a positive year-to-date overall net

absorption of 766,017 square feet (sf), which was driven by

Restoration Hardware, Inc.’s 600,000-sf occupancy at 4000 PrincipioParkway East (Bldg 1) in Cecil County. Other notable I-95 North

Corridor occupancies included: the 98,659-sf Knight Takes King

Production, Inc. and the 59,853-sf Bizerba Label Solutions, Inc at 1804

Fashion Court in Harford County. The Baltimore-Washington

Corridor also remained active as its year-to-date overall net

absorption was positive at 249,197 sf primarily due to Zust

Bachmeier’s 129,232-sf occupancy at 1349 Charwood Road in Anne

Arundel County and Elite Spice’s 158,400-sf occupancy at 7751

Waterloo Road in Howard County.

INVESTOR SALES IN THE CORRIDOR MARKETS

A total of 1.1 msf of investor sales transactions were closed in the

first quarter, with warehouse/distribution product accounting for

95.7% of the investor sales activity. Portfolio sale offerings remained

active in the market as two major portfolio sales transactions were

closed in the quarter: AEW Capital Management LP’s fifteen building

portfolio sale for $290 million, which included 7630 Gambrills Cove

Road and 4622 Mercedes Drive, and Harwood Business Center,

LLC’s portfolio sale of 6350 and 6360 South Hanover Road for $4.0

million, or $84.85 psf. Aside from portfolio sales, another notable

investor sale transaction was Preston Scheffenacker Properties, Inc.’s

purchase of 8000 Telegraph Drive for $7.1 million.

OUTLOOK

Activity levels in the Baltimore industrial market are expected to

largely hold in the first half of 2012 as supply will stay constant and a

tightening of prime warehouse/distribution space continues. Two

construction projects, 521 A Chelsea Road and 4000 Principio

Parkway East (Bldg 2), in the I-95 North Corridor are expected to

deliver during the second half of 2012. Tenant occupancies in the

second quarter of 2012, such as the 227,976-sf M&D Logistics

occupancy at 8901 Snowden Parkway, are expected to yield positive

absorption for the market and modestly decrease its vacancy rates.

STATS ON THE GO

1Q11 1Q12 Y-O-Y

CHANGE

12 MONTH

FORECAST

Overall Vacancy 11.0% 9.8% -1.2pp

Direct Asking Rents (psf/yr) $4.81 $4.99 3.7%

YTD Leasing Activity (sf) 1,115,980 1,307,503 17.2%

OVERALL RENTAL VS. VACANCY RATES

OVERALL ACTIVITY

9.0%

9.5%

10.0%

10.5%

11.0%

11.5%

$4.70

$4.80

$4.90

$5.00

$5.10

$5.20

1Q11 2Q11 3Q11 4Q11 1Q12

    p    s     f      /    y    r

OVERALL NET RENTAL RATE OVERALL VACANCY RATE

     5 .     9

     5 .     4

     6 .     6

     5 .     9

     1 .     3     4

 .     0     2 .     3

     3 .     2

     4 .     8

     1 .     3

0.0

1.5

3.0

4.5

6.0

7.5

2008 2009 2010 2011 2012 YTD

    m    s     f

LEASING ACTIVITY SALES ACTIVITY

Q1 2012BALTIMORE, MD

INDUSTRIAL SNAPSHOT MARKETBEAT

A Cushman & Wakefield Research Publication

8/2/2019 Baltimore AMERICAS Market Beat Industrial Q12012 (1)

http://slidepdf.com/reader/full/baltimore-americas-market-beat-industrial-q12012-1 2/2

 

Cushman & Wakefield of Maryland, Inc.500 East Pratt Street, Suite 500Baltimore, MD 21202

www.cushmanwakefield.com/knowledge

The market terms and definitions in this report are based on NAIOP standards.

No warranty or representation, express or implied, is made to the accuracy or completeness of theinformation contained herein, and same is submitted subject t o errors, omissions, change of price, rental orother conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.

© 2012 Cushman & Wakefield, Inc. All rights reserved.

BALTIMORE, MD

SUBMARKET PROPERTY

TYPE

INVENTORY OVERALL

VACANCY

RATE

YTD LEASING

ACTIVITY

YTD USER

SALES

ACTIVITY

UNDER

CONSTRUCTION

YTD

CONSTRUCTION

COMPLETIONS

YTD DIRECT

NET ABSORPTION

YTD OVERALL

NET ABSORPTION

DIRECT WEIGHT

AVERAGE N

RENTAL RAT

Howard County Flex 4,740,035 8.4% 66,254 0 0 0 1,726 1,726 $8.

W/D 28,894,528 14.0% 565,101 0 0 0 85,570 102,470 $4.7

Anne Arundel County Flex 9,257,438 10.3% 117,179 0 0 0 (70,655) (73,402) $11.

W/D 21,064,275 8.6% 56,325 10,985 0 0 169,560 169,560 $5.2

Baltimore City/County - Southwest Flex 3,080,135 15.2% 37,686 0 0 0 9,868 9,868 $5.6

W/D 20,501,213 11.9% 38,500 96,980 0 0 38,975 38,975 $4.0

Baltimore-Washington Corridor Flex 17,077,608 10.7% 221,119 0 0 0 (59,061) (61,808) $8.3

W/D 70,460,016 11.8% 659,926 107,965 0 0 294,105 311,005 $4.6

Total 87,537,624 11.6% 881,045 107,965 0 0 235,044 249,197 $5.0

Harford County Flex 2,176,255 8.4% 0 0 0 0 (5,164) (5,164) $8.4

W/D 17,758,599 10.7% 116,640 0 692,000 0 264,355 264,355 $4.

Cecil County Flex** N/A N/A N/A N/A N/A N/A N/A N/A N/

W/D 8,402,466 4.4% 0 0 600,000 0 588,000 588,000 $3.

Baltimore County East Flex 4,830,416 15.2% 9,837 0 0 0 (26,127) (26,127) $7.

W/D 41,204,587 8.5% 212,600 38,025 0 0 (55,047) (55,047) $4.

I-95 North Corridor Flex 7,006,671 13.1% 9,837 0 0 0 (31,291) (31,291) $7.6

W/D 67,365,652 8.6% 329,240 38,025 1,292,000 0 797,308 797,308 $4.2

Total 74,372,323 9.0% 339,077 38,025 1,292,000 0 766,017 766,017 $4.5

Baltimore County – North/West Flex 9,737,241 8.7% 81,161 0 0 0 34,319 41,105 $9.4

W/D 7,958,925 3.6% 6,220 0 0 0 (31,518) (31,518) $5.2

Baltimore City Flex 1,520,889 12.0% 0 0 0 0 0 0 $6.0

W/D 5,932,867 5.4% 0 0 0 0 (2,201) (2,201) $3.7

Carroll County Flex** N/A N/A N/A N/A N/A N/A N/A N/A N/

W/D 7,236,817 7.5% 0 0 0 0 (10,900) (10,900) $4.

Beltway Submarkets Flex 11,258,130 9.2% 81,161 0 0 0 34,319 41,105 $8.8

W/D 21,128,609 5.4% 6,220 0 0 0 (44,619) (44,619) $4.4

Total 32,386,739 6.7% 87,381 0 0 0 (10,300) (3,514) $6.3

TOTAL FLEX FLEX 35,342,409 10.7% 312,117 0 0 0 (56,033) (51,994) $8.3

TOTAL W/D W/D 158,954,277 9.6% 995,386 145,990 1,292,000 0 1,046,794 1,063,694 $4.5

BALTIMORE TOTAL TOTAL 194,296,686 9.8% 1,307,503 145,990 1,292,000 0 990,761 1,011,700 $4.9* RENTAL RATES REFLECT ASKING $PSF/YEAR ** FLEX INVENTORY DOES NOT EXIST IN THIS MARKET

MARKET HIGHLIGHTS

Significant 1Q12 Lease Transactions  SUBMARKET TENANT/BUYER PROPERTY TYPE SQUARE F

8901 Snowden River Parkway Howard County M&D Logistics, Inc W/D 227,9

1200 S Newkirk Street* Baltimore County East Henry Bath Inc W/D 227,0

2010 Reservoir Road Baltimore County East White Marsh Transport, Inc W/D 200,0

7751 Waterloo Road Howard County Elite Spice, Inc W/D 158,4

Significant 1Q12 Sale Transactions  SUBMARKET BUYER PURCHASE PRICE / $PSF SQUARE F

AEW Capital Portfolio Sale – 15 Bldgs

(Includes 7630 Gambrills Cove & 4622 Mercedes Drive)

Anne Arundel County &

Harford County

Verde Corp Realty Services $290,300,000 /$73.98 psf & $69.61 psf 

695,5

8000 Telegraph Drive Anne Arundel County Preston Scheffenacker Properties, Inc $7,100,000 / $32.11 psf   221,1

Significant 1Q12 Construction Completions  SUBMARKET MAJOR TENANT COMPLETION DATE SQUARE F

N/A

Significant Projects Under Construction  SUBMARKET MAJOR TENANT COMPLETION DATE SQUARE F

521 A Chelsea Road Harford County N/A 3Q12 692,0

4000 Principio Parkway East (Bldg 2) Cecil County Restoration Hardware, Inc 4Q12 600,0

* RENEWAL - NOT INCLUDED IN LEASING ACTIVITY STATISTICS