In response to this market dynamic, industrial rents have climbed 19.9% over the past eight years to $5.95-per-square-foot, triple-net, beyond their prior cycle peak of $5.63.

Sargis relates that continued limited land opportunities and higher rents have also pushed land pricing to new heights, further impacting future pro-forma rents.

He points to DCT's 2016 purchase of 7200 Dorsey Run Road, a raw piece of land in Jessup, MD, came at a land basis of $28 per FAR. In order to justify the development, Prologis (who recently acquired DCT) is asking north of $7.25-per-square-foot NNN in rents.

Some developers and tenants, who are unwilling to shell out the funds for the corridor's premium properties, are looking to other neighboring markets to invest or locate their operations.

North of Baltimore, Harford and Cecil counties, have quickly matured into viable industrial markets that offer the ability to access I-95 while providing a cheaper alternative to the corridor, the report notes.

At Principio Business Park, Trammell Crow developed a 1.1 million-square-foot speculative warehouse in 2017 at a land basis of $7 per FAR (one-quarter the land value of the corridor). With rents striking near $5.00-per-square-foot NNN, the development provides a nearly 30% rent discount to the corridor.

“As supply runs thin in the corridor, Prince George's County also acts as an alternative with similar access to highway infrastructure and population as the corridor,” Sargis states.

Developers have built more than 2.2 million square feet since 2014, with rents averaging $8.03-per-square-foot NNN. He adds that tenants with requirements in the corridor may look south to these vacancies if they can afford the DC premium especially as the rent gap between corridor and Prince George's County for new construction has shrunk from 19.3% in 2010 to just 10.7% today.