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Market Report

Baltimore Office Investment Forecast

2022 Outlook

Speculative Building and Return-to-Office Uncertainty Prolong Recovery in Baltimore's Office Sector

Development pipeline accelerates while leasing activity lags. Lingering impacts from the health crisis are still hindering office fundamentals in Baltimore. Many companies decided to reduce their office footprints while overall leasing activity has softened, resulting in five consecutive quarters of negative net absorption. Although mild relative to other Northeastern markets, rising vacancy is still impeding rent growth. Many landlords are offering tenant improvement allotments and concessions to boost or maintain occupancy during this period of uncertainty. While the number of jobs that typically utilize office space returning to pre-pandemic levels provides optimism in the metro, a few headwinds remain that may affect conditions in the short term. The rising concern of COVID-19 variants continues to delay return-to-office timelines for many major employers. Additionally, over 85 percent of space scheduled to deliver in 2022 is available for lease entering this year, which will likely result in a modest uptick in availability. However, despite the expected rise in vacancy, the rate will still remain well below the national average.
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