Industrial space remaining in North I-95 Corridor dips to historic low, CBRE data shows

More than 11 million square feet of industrial space leased in the Baltimore North Interstate 95 Corridor in the fourth quarter of 2021 created a historically low 3.3% regional vacancy rate, according to data released Monday by CBRE, the world’s largest commercial real estate services and investment firm

CBRE, which operates a full-service location in Baltimore and defines the Baltimore North I-95 Corridor as the area encompassing Baltimore city Southeast, Baltimore County East and the entirety of Harford and Cecil counties. The leasing activity resulted in an overall net absorption of about 7 million square feet of space, which subsequently reduced the vacancy rate to a historic low.

CBRE also reported approximately 1.5 million square feet of space was leased in Baltimore County East, resulting in a vacancy rate of 2.4% at year-end 2021, the vacancy rate in Cecil and Harford counties ended the year at 4.3 %, based on the nearly three million square feet of space leased last year and with a limited speculative construction pipeline on the immediate horizon, the vacancy rate is expected to decrease in 2022 as demand continues to outpace supply which will also result in increased pressure on rents.

Significant leasing transactions in 2021 included a 1.2 million square-foot lease signed by Wayfair at 1500 Woodley Road; a 656,000-square-foot lease executed by WebstaurantStore at 1100 Woodley Road; Elite Comfort Solutions’ nearly 615,000-square-foot lease at 1900 Clark Road; a 500,000-square-foot lease signed by Fanatics at 811 Old Philadelphia Road and a 715,000 square-foot-lease executed by Bella + Canvas at 200 Nazarene Camp Road in North East.

Bulk occupiers continue to consider Maryland sites as part of a larger geographic region encompassing Pennsylvania, New Jersey, Virginia and West Virginia, leading to stiff competition for occupiers between various jurisdictions and states.

Changes in consumer shopping habits fueled by the pandemic resulted in U.S. e-commerce sales eclipsing the $1 trillion mark, which marks an all-time high, a trend that was edging up over the past five years but dramatically accelerated over the past 18 months. Real estate experts now consider shopping patterns permanently changed, and according to information released by the US Census Bureau, more than 13% of all retail purchases now come via digital orders.

According to a report in Forbes, the demand for warehouse logistics workers increased by 244% last year, while the search for new truck drivers expanded to 761%. Warehouse positions offer the opportunity for growth, flexibility and variety, with Maryland considered a fertile area to recruit highly skilled workers needed in warehouse positions.

The availability and quality of labor remains a significant driver of real estate decisions, according to Spencer Levy, global chief client officer and senior adviser for CBRE.

Over the next five years, nearly 1.5 billion square feet of logistics space will be added to the worldwide inventory of space in response to the surge in e-commerce, according to CBRE.