Cushman & Wakefield’s Washington, D.C. area and Baltimore research teams have released the Industrial MarketBeat Reports for the second quarter 2012. A summary of these reports is below:
The greater Baltimore industrial market continued to improve as the overall vacancy rate dipped into the single digits. Positive absorption of 1.3 million square feet (msf) for the year reflects demand for warehouse/distribution space in both the I-95 and Baltimore-Washington Corridors. While the largest deals of the second quarter were renewals, strong first quarter leasing and subsequent occupancies by companies such as Elite Spice, Inc. kept absorption healthy.
Portfolio sales totaling over 2 msf closed during the second quarter. IndCor Properties picked up 11 industrial buildings in Maryland and 7 in Virginia as part of a larger national purchase from DEXUS. Cabot Properties, out of Boston, purchased a 5-building portfolio in Howard County from Invesco Real Estate for $35.2 million, about $52 psf. Strong market fundamentals throughout the Corridors are attracting both regional and national investors to industrial product in the area.
The largest new lease in years closed during the second quarter as Amazon.com, Inc. took 179,250 sf at the new Dulles Summit Court, improving market fundamentals somewhat in the Northern Virginia industrial market. Leasing is up from last year at this time and absorption is positive. However, the market has remained relatively flat overall with no change in the vacancy rate over the past twelve months and renewals accounting for 43.3% of all activity in 2012.
The industrial market in Prince George’s County is holding its own in 2012, with positive absorption of 154,737 sf and a vacancy rate which has declined by 1.2 percentage points since year-end. Tenants such as Mattress Discounters and Scope Services, a Pepco subcontractor, have been active in the market this year. On the investor side, Morgan Stanley purchased a 3-building portfolio from American Realty Advisors for approximately $27.5 million or $96 psf.