Cushman & Wakefield, Inc.

500 East Pratt Street, Suite 500

Baltimore, MD 21202
www.cushmanwakefield.com/knowledge
For more information, contact:
Paula Munger, Managing Director
+1 (703) 847 2785
paula.munger@cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No
warranty or representation, express or implied, is made to the accuracy or completeness
of the information contained herein, and same is submitted subject to errors, omissions,
change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals.
2014 Cushman & Wakefield, Inc. All rights reserved.
1

ECONOMIC OVERVIEW
According to the Bureau of Labor Statistics
(BLS), Marylands unemployment rate stood at
6.4%, as of August 2014. Despite the growth in
consumer confidence and the anticipated boost
in sales over the next 12 months, the
manufacturing sector continues to shed jobs, 4,300 jobs to be exact,
over the last year. Job loss can be attributed to the lack of highly
skilled workers coupled with the shift to automated manufacturing.
NEW CONSTRUCTION PUSHES VACANCY
The Baltimore industrial market continued its blistering run of
positive absorption, which increased by 1.0 million square feet (msf)
in the third quarter to 2.2 msf, year-to-date. Clorox Manufacturing,
Co. and Sephora USA, Inc. occupied 1467 Perryman Road (945,720
square feet (sf)) and 531 Chelsea Road (655,000 sf), respectively.
Overall vacancy as of Q3 stood at 8.3%. This returned 0.6 percentage
points (pp) to the 7.7% rate in Q2. Although overall net absorption
was in the black, vacancy climbed mainly due to the delivery of 2.7
msf, about 10% of which is vacant.
LEASING VELOCITY HIGH AMIDST SHIFTING DEMAND
In Q3, the Baltimore industrial market continued to see high levels of
transactional volume as tenants in the 30,000 to 70,000-sf range
dominated the demand for space. However, big-box retailers and
manufacturers still executed the largest deals of Q3. IKEA
Distribution Services, Inc. executed a lease at 1840 Clark Road
totaling 184,000 sf. HVAC distributor, Carrier, executed the second
largest deal totaling 180,000 sf at 7481 Coca Cola Drive while W.R.
Grace & Co. inked a 151,189-sf deal at 6610 Cabot Drive. The 6.5%
decline year-over-year, in total activity can be attributed to the shift
in demand from big-box tenants to mid-size tenants. Year-to-date,
tenants over 100,000 sf executed 2.4 msf in warehouse/distribution
deals, down 18% from the same period last year. Mid-size tenant
activity has ticked up 1.7% from the previous year totaling 1.2 msf,
year-to-date.
LACK OF PRODUCT DRIVES PRICING UPWARD
The demand for Baltimore industrial product continues to outpace
supply, compressing cap rates and pushing pricing on what little
product becomes available. The third quarter witnessed more than
$140 million in trades, the vast majority of which were Class B. TA
Realty Associates was responsible for more than half of the quarters
transactions dollars, with more than $73 million in acquisitions,
totaling more than 1.0 msf, including DCT Industrials I-95 Portfolio
sale, which included 532,000 sf in the Baltimore market. Industrial
Property Trust was also active in Q3, acquiring four buildings totaling
more than 550,000 sf for almost $37 million. The trust scooped up
8730 Greenwood Place from Atapco, Inc. for $9.9 million or $81 per
square foot (psf).

OUTLOOK
Over the next 12 months leasing activity is expected to hold steady.
Asking rents will remain relatively flat, except in the mid-size pocket
where landlords are already executing deals in the range of $6.00 psf.
Occupancy growth will remain steady as tenants like Amazon.com,
Inc. and B&E Storage take occupancy in Q4. Strong positive market
fundamentals will continue to spur construction. A shift from build-
to-suit projects to more speculative projects can be expected.
STATS ON THE GO
Q3 2013 Q3 2014

Y-O-Y
CHANGE
12 MONTH
FORECAST
Overall Vacancy 8.4% 8.3% -0.1pp
Direct Asking Rents (psf/yr) $5.15 $5.23 1.6%

YTD Leasing Activity (sf) 6,837,956 6,395,606 -6.5%


OVERALL RENTAL VS. VACANCY RATES


OVERALL OCCUPIER ACTIVITY

7.2%
7.4%
7.6%
7.8%
8.0%
8.2%
8.4%
8.6%
$5.05
$5.10
$5.15
$5.20
$5.25
$5.30
$5.35
$5.40
Q3 13 Q4 13 Q1 14 Q2 14 Q3 14
p
s
f
/
y
r
OVERALL NET RENTAL RATE OVERALL VACANCY RATE
6
.
6
5
.
9
5
.
5
1
0
.
8
6
.
4
0
.
2
1
.
6
1
.
2
0
.
9
1
.
2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2010 2011 2012 2013 Q3 14
m
s
f
LEASING ACTIVITY USER SALES ACTIVITY
Q3 2014
BALTIMORE, MD
INDUSTRIAL SNAPSHOT

MARKETBEAT
A Cushman & Wakefield Research Publication

Cushman & Wakefield, Inc.
500 East Pratt Street, Suite 500
Baltimore, MD 21202
www.cushmanwakefield.com/knowledge
For more information, contact:
Paula Munger, Managing Director
+1 (703) 847 2785
paula.munger@cushwake.com
The market terms and definitions in this report are based on NAIOP standards. No
warranty or representation, express or implied, is made to the accuracy or completeness
of the information contained herein, and same is submitted subject to errors, omissions,
change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals.
2014 Cushman & Wakefield, Inc. All rights reserved.
2


MARKET HIGHLIGHTS
SIGNIFICANT Q3 2014 LEASE TRANSACTIONS SUBMARKET TENANT PROPERTY TYPE SQUARE FEET
1840 Clark Road, Havre De Grace Harford County IKEA Distribution Services, Inc. Warehouse/Distribution 184,000
7481 Coca Cola Drive, Hanover Howard County Carrier Warehouse/Distribution 180,000
6610 Cabot Drive, Glen Burnie
Anne Arundel
County
W. R. Grace & Co. Warehouse/Distribution 151,189
SIGNIFICANT Q3 2014 SALE TRANSACTIONS SUBMARKET BUYER PURCHASE PRICE / $PSF SQUARE FEET
504 Advantage Way, Aberdeen Harford County SK Realty Management $31,000,000/$58 530,308
Portfolio Sale ** Howard County Industrial Property Trust $27,000,000/$63 429,100
Portfolio Sale
Harford & Howard
County
TA Associates Realty $20,200,000/$58 347,245
SIGNIFICANT Q3 2014 CONSTRUCTION
COMPLETIONS
SUBMARKET MAJOR TENANT COMPLETION DATE
RENTABLE BUILDING AREA
(% LEASED)
1467 Perryman Road, Aberdeen Harford County Clorox Manufacturing, Co. Q3 2014 945,720 (100%)
531 Chelsea Road, Perryman Harford County Sephora USA, Inc. Q3 2014 655,000 (100%)
SIGNIFICANT PROJECTS UNDER CONSTRUCTION SUBMARKET MAJOR TENANT COMPLETION DATE
BUILDING SQUARE FEET
(% LEASED)
2010 Broening Highway, Baltimore Baltimore City Amazon.com, Inc. Q4 2014 1,150,000 (100%)
** SALE NOT INCLUDED IN STATISTICS REPORTED POST CLOSE

BALTIMORE, MD
SSUBMARKET

PROPERTY
TYPE
INVENTORY OVERALL
VACANCY
RATE
YTD LEASING
ACTIVITY
YTD USER
SALES
ACTIVITY
UNDER
CONSTRUCTION
YTD
CONSTRUCTION
COMPLETIONS
YTD DIRECT
NET
ABSORPTION
YTD OVERALL
NET
ABSORPTION
DIRECT
WEIGHTED
AVERAGE NET
RENTAL RATE
Howard County Flex 6,761,557 7.5% 363,774 0 0 0 (113,968) (117,038) $9.31
W/D 29,539,743 11.6% 1,266,981 222,490 156,140 241,457 336,289 309,467 $5.25
Anne Arundel County Flex 9,399,446 9.5% 358,877 54,965 0 0 14,308 (292) $10.00
W/D 21,129,249 10.8% 802,371 0 291,000 243,000 (363,866) (487,696) $5.91
Baltimore City/County -
Southwest
Flex 3,050,135 15.3% 141,010 0 0 0 56,471 45,871 $7.29
W/D 20,444,680 9.3% 415,221 357,886 0 0 82,173 82,173 $3.76
BALTIMORE-
WASHINGTON
CORRIDOR
Flex 19,211,138 9.7% 863,661 54,965 0 0 (43,189) (71,459) $9.11
W/D 71,113,672 10.7% 2,484,573 580,376 447,140 484,457 54,596 (96,056) $5.07
Total 90,324,810 10.5% 3,348,234 635,341 447,140 484,457 11,407 (167,515) $5.57
Harford County Flex 2,204,780 11.3% 85,907 0 0 0 126,534 124,352 $10.08
W/D 19,887,622 5.5% 466,627 175,200 0 1,600,720 1,153,535 1,153,535 $4.52
Cecil County Flex N/A N/A N/A N/A N/A N/A N/A N/A N/A
W/D 9,759,156 2.9% 0 32,000 0 0 8,600 8,600 $2.70
Baltimore County East Flex 4,804,571 9.7% 206,934 73,541 70,000 0 65,698 50,240 $8.99
W/D 42,077,150 7.4% 1,432,839 270,268 1,889,528 449,299 501,250 501,250 $3.69
I-95 NORTH CORRIDOR Flex 7,009,351 10.2% 292,841 73,541 0 0 192,232 174,592 $9.57
W/D 71,723,928 6.3% 1,899,466 477,468 1,959,528 2,050,019 1,663,385 1,663,385 $3.87
Total 78,733,279 6.6% 2,192,307 551,009 1,959,528 2,050,019 1,855,617 1,837,977 $4.19
Baltimore County
North/West
Flex 9,734,521 9.3% 470,529 0 0 30,120 83,758 84,508 $9.76
W/D 8,038,925 4.6% 85,649 0 0 0 114,678 121,678 $9.76
Baltimore City Flex 1,483,889 10.4% 0 0 0 0 (38,927) (38,927) $11.06
W/D 5,873,867 5.4% 31,700 0 0 0 55,704 55,704 $5.90
Carroll County Flex** N/A N/A N/A N/A N/A N/A N/A N/A N/A
W/D 7,236,817 3.9% 267,187 22,000 0 0 267,189 267,189 $4.30
BELTWAY
SUBMARKETS
Flex 11,218,410 9.5% 470,529 0 0 30,120 44,831 45,581 $10.03
W/D 21,149,609 4.6% 384,536 22,000 0 0 437,571 444,571 $6.43
Total 32,368,019 6.3% 855,065 22,000 0 30,120 482,402 490,152 $8.19
TOTAL FLEX FLEX 37,438,899 9.7% 1,627,031 128,506 0 30,120 193,874 148,714 $9.49
TOTAL W/D W/D 163,987,209 8.0% 4,768,575 1,079,844 2,406,668 2,534,476 2,155,552 2,011,900 $4.61
BALTIMORE TOTAL TOTAL 201,426,108 8.3% 6,395,606 1,208,350 2,406,668 2,564,596 2,349,426 2,160,614 $5.23
* RENTAL RATES REFLECT ASKING $PSF/YEAR **FLEX INVENTORY DOES NOT EXIST IN THIS MARKET