Baltimore Industrial Market Slows Slightly in Second Quarter After experiencing almost 1.

2 million square feet of positive absorption in the first quarter, the Baltimore Industrial market slowed in the second quarter. Less than 65,000 square feet of positive absorption in the second quarter caused the vacancy rate to inch down from 11.67% to 11.59%. Overall average rents in the market have decreased and currently stand at $5.32 per square foot. The Northern Baltimore-Washington Corridor submarket continues to drive the bulk of the activity in the Baltimore Industrial market. Almost 240,000 square feet of positive absorption in the second quarter has reduced the Corridor vacancy rate to 11.70%. The submarket has experienced more than a half million square feet of positive absorption year-to-date. This activity has been well spread amongst the 29 industrial parks included in the submarket; 23 have experienced positive absorption in either the first quarter, second quarter or both. This submarket also continues to attract institutional investors. Several deals closed in the second quarter totaling almost $60 million in transactional volume. Harford and Cecil Counties continues to experience demand for bulk warehouse inventory. Pier One Imports, Inc. leased almost 350,000 square feet in Aberdeen, adding to the more than 800,000 square feet leased by U.S. Lumber Company and Kenco in the first quarter. Unfortunately, the Pier One lease was significantly offset by negative absorption in the Baltimore City East and Baltimore County East submarkets. Almost 250,000 square feet of negative absorption in these two submarkets contributed the most to the overall flat absorption experienced by the Baltimore Industrial market in the second quarter. Development activity continues in 2013 at a pace unseen in previous years. The two projects that delivered in the first quarter, totaling 734,275 square feet, are already fully leased. More than 1 million square feet is currently under construction, predominantly focused on the Corridor and Harford County submarkets. The submarkets closest to Baltimore City lack the available land to facilitate construction and developers have been satisfied with the opportunities available farther

2013 Q2 Industrial North Market Review Click to View

2013 Q2 Industrial South Market Review Click to View

2013 Q2 Industrial Interactive Map Click to View

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from the city. Speculative industrial development has proven successful early in 2013 and looks to continue well through this year and into 2014. Forecast Demand will rebound in the second half; market-wide positive absorption should return to levels between 750,000 and 1 million square feet. Additional land acquisitions and planned speculative development will occur as developers seek to capitalize on the tightening supply within the market. Rental rates will stabilize and begin to increase in submarkets where they have dipped recently.

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