Top Mid-Atlantic Markets 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 4.3 percent decline from the $14.2 billion recorded during the same period last year and a substantial 54.4 percent drop from the $29.8 billion of two years ago.

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

1. Washington, D.C.

Despite being the largest market by sales volume in the Mid-Atlantic, Washington, D.C., saw both sales volume and price per square foot decline, indicating a cooling market, coupled with slowing demand and industrial space being delivered vacant.

The metro has experienced a significant decline in industrial sales, the volume dropping to $192.6 million year-to-date through May, CommercialEdge data shows. This represented 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 in May 2024, falling to $156.66 from $235.66 last year and $289.25 two years ago, reflecting a downward trend in property valuations.

In the market's largest industrial sale in the first five months of the year, 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

Industrial sales volume in Baltimore reached $142.6 million year-to-date through May, showing minimal fluctuation compared to the $145.8 million recorded during the same timeframe last year but a significant decline from the $717.36 million recorded 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 slightly down from the $129.10 two years ago, according to CommercialEdge. This increase indicates a recovery in property values, while also suggesting of the sales volume.

Notable transactions included 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.

In April, NorthBridge Partners sold a 121,800-square-foot industrial asset at 2701 Wilmarco Ave. in Baltimore. Goodwill paid $25.1 million, or an impressive $206.28 per square foot.

3. Richmond-Tidewater

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. That pointed to a minimal rebound in market activity, though the amount still was significantly lower than the $277.6 million recorded two years ago.

The price per square foot has also shown a positive trend in May 2024, increasing 37.4 percent to $115.88 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 included 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.

In another significant deal, B&D Holdings acquired an industrial campus 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.