Duke Realty Tops Off Baltimore Portfolio Occupancy

Duke Realty Corp. has nary a square foot available for lease in its Baltimore portfolio, now that the REIT has signed Ace Logistics to a second lease expansion at Chesapeake Commerce Center, its 2.4 million-square-foot industrial park, for the second time in three years.

Ace has just entered into a new lease agreement that increases its occupancy at Chesapeake Commerce Center by 41,900 square feet, for a total presence at the campus of approximately 393,000 square feet.

Chesapeake Commerce Center, 5901 Holabird. Image courtesy of James Oesch Photography

Located practically a stone’s throw from the Port of Baltimore on the site of a former General Motors plant, the 177-acre Chesapeake Commerce Center is a Duke development project and consists of seven state-of-the-art industrial facilities, the first of which delivered in 2008. Ace began its occupancy at the park with its lease of the 169,000-square-foot facility at 5900 Holabird Ave.

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In a 351,000-square-foot lease transaction at Chesapeake Commerce Center in 2019, the warehouse and logistics services provider renewed its commitment at 5900 Holabird and expanded its footprint with a deal for a 182,000-square-foot build-to-suit warehouse at 6000 Holabird Ave.

Ace’s new lease will give the company additional elbow room with space in the building at 5901 Holabird Ave. One of the original buildings developed at Chesapeake Commerce Center, 5901 Holabird made its debut in 2008. The facility, which consists of a total of 117,600 square feet, is one of the closest buildings in the park to the Port’s Dundalk Marine Terminal and is within steps of Ace’s existing space at 5900 and 6000 Holabird.

Primed for positive performance

With its Baltimore portfolio filled to the brim, Duke needn’t concern itself too much with local market fundamentals for the time being. However, the market happens to be performing well. The metropolitan Baltimore industrial market expanded significantly in 2021, closing the year with 2.5 million square feet of positive net absorption, according to a fourth quarter 2021 report by Transwestern. Additionally, the vacancy rate dropped 60 basis points to 5.5 percent year-over-year, and asking rental rates continued their upward climb, increasing 80 basis points from 2020.

Baltimore’s forecast is equally bright. “The industrial market will remain on a healthy growth path,” according to the Transwestern report. “Online ordering will remain heightened through 2022 and beyond, as consumers of all ages have embraced the convenience. Therefore, industrial buildings that focus on distribution of product, specifically grocery and household items, will likely outperform. We expect the vacancy rate to remain low, which will put upward pressure on rents and potential spikes in select submarkets.”

JLL’s Ben Meisels represented Ace in the lease transaction with Duke, which relied on Battista Orcino, vice president of leasing and development with the REIT, to facilitate the transaction in-house.