As with industrial just about every where — Baltimore's market faces challenges as the global trade war continues. The second quarter showed some poor fundamentals, while investors might be encouraged by other areas in the region, according to a report from JLL.
Baltimore during the three months through June negatively absorbed -1.68 million square feet of space in the sector. The figure was primarily exacerbated by "Class B inventory, with three tenants (BIW, IQS, and Classic Brands) accounting for the lion’s share of negative net absorption recorded YTD," according to JLL. Also, corporate restructuring coming from Frito-Lay and Rite Aid contributed to poor results in the segment.
Moreover, vacancy spiked to nine percent, compared to the six percent levels seen in 2024.
However, JLL does note that tenant demand remains, particularly in the Baltimore City East and Eastern Baltimore County areas. The brokerage points to some leases from BIW, RPM Logistics and SH Bell.
Another positive was the auto shipments, which surged by 18.9 percent year-over-year in April. Also, TEUs increased by 1.8 percent in the market.
In the near term, JLL warns of some volatility that could affect Baltimore's industrial sector.
"While recent move-ins and realignments offer positive signals, the market may experience some softness due to increased sublease availability," it said.
"Landlords may need to be flexible in negotiations to maintain occupancy rates, while tenants, particularly bulk users, could find opportunities to secure favorable terms."
But the brokerage does note bullishness about the long-term, highlighting investments going into Baltimore's transit and seaport infrastructure.
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