(To read more on the industrial market, click here.)
BALTIMORE, MD-Under Armour Inc., an apparel manufacturer based here, has inked a 6-year, 308,220-sf flex/industrial lease with ASB Capital Management LLC. The company is expanding into the class A facility from a near-by builidng.
Transwestern agents Tommy Gentner, Brian Watts and Austin Curtis represented ASB Capital Management while Mike Bender, with AGM Commercial Real Estate Services in Baltimore, represented Under Armour.
Built in 2003, the facility, which is located at 1040 Swan Creek Dr., is located in Anne Arundel County, which is still within the heavily trafficked Baltimore-Washington corridor. The deal is significant because it, along with a similarly-sized lease nearby, took more than 660,000 sf of bulk/distribution space off of the market, Gentner tells GlobeSt.com.
A federal government agency recently leased 352,860 sf from Metro Logistics in a building very close to Swan Creek Drive, he says. "Over several weeks we just saw the vacancy rate in the Baltimore-Washington corridor fall by two percentage points from a mid year 12% vacancy rate."
The going rates for B grade industrial product in this region range about $5 per sf triple net, Gentner says. Rates for class A product usually are slightly higher. Under Armour is paying for B grade space because of the building's secondary location in the corridor, although the exact rent the company is paying is unknown.
Outside of these two transactions, vacancies in the warehouse sector, both flex/office and bulk/distribution, have been tightening, especially in areas near local airports at Dulles and Baltimore. But these fundamentals are quick to shift. Gentner notes that the corridor typically delivers 1 million sf a year in new construction and now there is 1.4 million sf under construction. "So one could argue there is a slight imbalance in demand-supply coming up," he says.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
