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Clear heights distinguish the industrial landscapes of Baltimore and Metro DC

• Since 2010, the Mid-Atlantic industrial market has averaged 2.6 million s.f. of positive absorption annually; Baltimore has accounted for 1.7 million s.f. of that total, capturing more than 63% of the region’s occupancy growth this cycle.

• Baltimore demand in recent years has stemmed from retail & logistics users taking down warehouse space for regional distribution. These users are attracted to Baltimore for its proximity to major transportation infrastructure (I-95 & the Maryland Port Authority), talent, affordable land pricing and the market’s ability to accommodate bulk construction with functional clear heights. While industrial buildings with over 30’ clear heights account for only 34% of the Baltimore market, those buildings have absorbed 1.1 million s.f. annually (68% of the market’s occupancy growth). Developers have adapted to this shift: of the 19.1 million s.f. of new deliveries in Baltimore since 2008, 15.1 million s.f. have had clear heights of 30’ or greater, representing 79% of industrial space delivered.

• Conversely, Metro DC’s tenant base remains locally focused. Geared toward last mile and proximity to the consumer, logistics tenants in Metro DC, averaging 17,812 s.f., do not require ceilings heights above 30’. Metro DC’s industrial market has averaged 943,182 s.f. of annual positive absorption this cycle, yet only 34,329 s.f. (3.6%) has been accounted for by modern bulk warehousing, i.e. 30’+ clear heights. Consequently, developers have largely shied away from building bulk warehousing in Metro DC. Of the 9.2 million s.f of deliveries since 2008, only 2.4 million s.f. have 30’+ clears. As land pricing continues to constrain industrial supply and demand stems from last-mile users, Metro DC may be a candidate for multi-story warehousing to service the growing population base.

Source: JLL Research

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