Top Mid-Atlantic Metros for Industrial Transactions

Amid rising economic uncertainty, investors are becoming increasingly cautious about transacting assets, leading to a slowdown in sales activity and Mid-Atlantic metros have done little to buck that trend. Additionally, high interest rates and capital costs are maintaining wide bid-ask spreads in commercial real estate markets, further contributing to the decline in transaction volumes. Nationally, there has been a notable decrease in sales volume during the first five months of 2024, with industrial investment totaling $13.6 billion, according to CommercialEdge data. This represents a 4.4 percent decline from $14.2 billion during the same period last year and a substantial 54.3 percent drop from $29.8 billion two years ago.

The Mid-Atlantic region follows this national trend with a 21 percent drop in sales volumes, decreasing to $458.1 million year-to-date in May from $581.5 million last year. This is a stark contrast to the $1.7 billion recorded two years ago, marking a dramatic 73 percent decline. The region’s price per square foot decreasing was $398.48 as of May. This marked a 3.8 percent drop from $414.20 last year and a significant 23.5 percent dip from $520.02 two years ago.

Using CommercialEdge data, we’ve outlined industrial real estate transaction trends across the Mid-Atlantic markets, with specific insights into the Washington, D.C., Baltimore and Richmond-Tidewater metros.

1. Washington, D.C.

In 2024, Washington, D.C. has experienced a significant decline in industrial sales volume, dropping to $192.6 million year-to-date in May, CommercialEdge data shows. This represents a 40 percent decrease from $318.7 million during the same period last year and a 72.2 percent drop from $692.7 million two years ago.

The price per square foot also decreased, falling to $156.66 as of May 2024, from $235.66 last year and $289.25 two years ago, reflecting a downward trend in property valuations. Despite being the largest market by sales volume in the Mid-Atlantic, Washington, D.C. is seeing both declining sales volume and price per square foot, indicating a cooling market, coupled with slowing demand and industrial space being delivered vacant.

In the largest industrial sale within the metro year-to-date in May, Terreno Realty made an $84.3 million purchase of the Fleet Industrial Park, a four-building, 357,000-square-foot logistics campus in Alexandria, Va. The seller was State Teachers Retirement System of Ohio, which owned the complex since 1993.

2. Baltimore, Md.

Industrial sales volume in Baltimore reached $142.6 million during the first five months of 2024, showing minimal fluctuation compared to the $145.8 million recorded during the same timeframe last year and a significant decline from $717.36 million two years ago.

Meanwhile, the price per square increased to $125.94 by May 2024, up 33.6 percent from $94.23 last year, but a slight decline from the $129.10 two years ago, according to CommercialEdge. This increase indicates a recovery in property values, suggesting that while the volume of sales has stabilized, the value of the properties being sold is rising.

Notable sales include Stoltz Real Estate Partners’ purchase of 10000 Franklin Square Drive, a Class A warehouse in Nottingham, Md., totaling approximately 383,000 square feet. TA Realty sold this property for $41 million. Last April, NorthBridge Partners sold a 121,800-square-foot industrial asset at 2701 Wilmarco Ave. in Baltimore to Goodwill for $25.1 million, or an impressive $206.28 per square foot.

3. Richmond-Tidewater, Va.

As of May 2024, Richmond-Tidewater’s sales volume has slightly increased to $122.9 million, marking a modest 5.1 percent rise from the previous year’s $116.9 million. Although small, that still points to a minimal rebound in market activity, though still significantly lower than the $277.6 million recorded two years ago.

The price per square foot has shown a positive trend, increasing to $115.88 in May 2024, up 37.4 percent from $84.31 last year. Two years ago, the price per square foot was $101.67, reflecting a consistent upward trajectory in property valuations. Overall, the metro posted a slight recovery in sales volume and a steady increase in PSF, suggesting an improving market.

Notable transactions include Portacool’s acquisition of Willis Commerce Center in Richmond, Va., for $54.5 million. The 405,000-square-foot spec warehouse was sold by BentallGreenOak, which had purchased it from Scannell Properties two years prior. Another significant sale involved B&D Holdings acquiring an industrial portfolio in Chesapeake, Va., consisting of 3732 Cook Blvd. and 1400 Cavalier Blvd. Link Logistics paid $53.9 million for this nearly 400,000-square-foot property.

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