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Market Report

Baltimore Office Investment Forecast

2020 Outlook

Vacancy, Asking Rent Adjust Marginally; Suburban Office Hubs Propel Employment Growth and Deal Flow

 

Existing floor plans benefit from reduction in office development. Spanning the past three years, Baltimore represented a locale of stable office fundamentals, bolstered by its sizable medical sector and expanding tech industry. During the 36-month stretch, metro vacancy hovered in the mid-12 percent to low-13 percent range thanks largely to increased demand for Class B and C space. In 2020, renewals and new leases inked at these properties, spurred by the addition of more than 8,000 traditional office positions, will continue to support a level of absorption that translates to stable vacancy. A subdued volume of construction will also support sturdy demand for existing floor plans as deliveries fall to a cycle low, highlighted by Wills Wharf, a 233,000-square-foot property in Harbor Point. Minimal construction activity coupled with a nominal shift in office availability is not expected to significantly impact asking rents, with the metro’s rate holding roughly $9 per square foot below the national average.

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