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News release

BALTIMORE, MD

Vacancy Rate in Baltimore’s Skyline Market Falls to Historic Low of 8.7 Percent as Space Commands Top Dollar


BALTIMORE, June 29, 2016 – Vacancy rates in Baltimore’s Skyline market have fallen to 8.7 percent and rents in have climbed to $25.26 per square foot, 18.3 percent higher than the Baltimore City average $21.35 per square foot for the overall office market. JLL’s 2016 Skyline report shows that Baltimore market conditions are now landlord favorable, particularly along the Pratt Street Corridor where vacancy for Class A buildings has dropped to 5.5%.

Baltimore's Skyline includes Class A and Trophy office buildings that meet one or more of the following criteria: greater than 200,000 total square feet, built or significant renovations since 1985, high-profile location, and recognized-tenant profile and/or architectural significance.

According to the report:

  • Occupancy in Baltimore’s Skyline has been boosted by a long-standing flight to quality and the removal of 1.3 million square feet of office inventory for residential conversion in the CBD;
  • There are only three blocks of space greater than 30,000 square feet in Baltimore’s Skyline and very limited development in the pipeline; and
  • Tenants in the market can expect to see asking rental rates rise.

“A lack of new deliveries over the past several years and a shrinking office inventory in the CBD due to residential conversions have contributed to record low vacancy for the Baltimore Skyline group of buildings,” noted Baltimore Market Director, Mark Levy.

Exelon’s 477,336-square-foot regional headquarters at Harbor Point, which is currently under construction and set to deliver in the second half of the year, will be the first addition to the skyline since 2010. The relocation from its current space on Pratt Street will create a potentially 152,833-square-foot block of vacancy of Class A space at 750 E Pratt Street.

Investment sale volume in the Skyline market was robust in 2015 and saw a year-over-year increase in activity of 84.4 percent. The momentum has carried into 2016 with the sale of 100 E Pratt Street and an additional skyline building hitting the market, 111 S Calvert Street.

“Given the projected increase of the labor and residential bases within the CBD as a result of the conversions, and the resulting elimination of functionally obsolete office inventory, the ingredients for occupancy and rental rate growth are in place for downtown Baltimore,” said JLL’s Jay Wellschlager, who oversees investment sales in Baltimore. “The CBD continues to attract new sources of capital that see this potential and can acquire properties at attractive yields compared to primary markets.”

About the Skyline Review

Investors and tenants alike can access JLL’s Skyline via a digital platform. The fully interactive website will feature JLL’s proprietary market insights regarding office supply, demand, rents, leverage and investment into 52 markets across the United States and Canada, with the ability to compare and contrast individual markets or multiples of markets as well as individual properties or portfolios. In addition, the site will offer videos and infographics. All information will also be available via mobile access.

About JLL

JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $5.2 billion and gross revenue of $6.0 billion, JLL has more than 280 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $58.3 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.