Washington, D.C., Industrial Investment Forecast
Distributors Expand Their Presence in Maryland to Service the Nation's Growing Capital
Expedited delivery schedules spur leasing. Since the onset of the pandemic more e-commerce companies started offering same-day or next-day shipping to gain market share amid surging demand for goods purchased online. This spearheaded leasing in the metro as many of these firms were unable to distribute goods to the region from neighboring markets in this expedited time frame. Tenants absorbed over 6 million square feet in 2021 compressing vacancy to the lowest level in over two decades entering this year. The surge in demand also stimulated construction activity with over 5.6 million square feet slated to deliver across the region in 2022. Land constraints near primary population hubs have developers targeting outlying submarkets in the region like Washington County and Fredericksburg. Although the rise in development will cause a slight uptick in vacancy this year the rate will remain 140 basis points below the trailing 10-year average.