As tenants are occupying newly delivered space, vacancy is increasing in Baltimore's industrial sector. In fact, vacancy (8.3 percent in the fourth quarter of 2025) is at levels not seen since the third quarter of 2016, according to a market report posted by CBRE.
"This increase is largely due to vacant deliveries, as 1.2 million sq. ft. of industrial construction delivered during the fourth quarter, most of which was vacant," the brokerage explained.
That comes as leasing activity was subdued, at 2.2 million square feet. This represents an 18 percent decline from the post-peak quarterly average. Third-party logistics firms were the most active in leasing up space last year in Baltimore's industrial sector, followed by wholesale and retail tenants.
Mako Freight had the largest signing, taking 470,019 square feet in Harford/Cecil County, followed by Thuma Retail's 275,744 square feet in Baltimore County East and Lineage Logistics's 247,860 square feet in the Baltimore City submarket.
Overall, CBRE noted that economic uncertainties have caused some issues for the industrial sector as a whole nationally, further explaining the weak results in Baltimore.
However, CBRE does point to some positives. While net absorption was negative at -442,000 square feet, 2025 finished with positive absorption of 398,000 square feet. This marks the 10th straight year that the market's demand finished in the green.
Additionally, supply is tapering.
"Year-over-year, deliveries are down about 50%, and the pipeline has only 1.0 million sq. ft. under construction," CBRE said.
That said, while only five properties remain in the pipeline currently, the brokerage predicts that development will "pick back up" this year.
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