Baltimore’s 36.1- million-square-foot community-neighborhood shopping center market was flat in the second quarter of 2012 following a strong first quarter. Net absorption slowed to 20,000 square feet and the vacancy rate slipped 10 basis points to 7.4%, which is down just 20 from a year earlier. Both the average asking rent and the average effective rent edged down 0.1% to $21.40 psf and $19.10 psf, respectively. Rents were up a modest 0.4% asking and 0.4% effective from a year earlier. In July, the effective average edged up a penny but the vacancy rate moved up 10 basis points.
With the 130,500-square-foot second phase of McHenry Row in the city of Baltimore completed during the first quarter, no additional community-neighborhood space is under construction, and Reis predicts the vacancy rate will end 2012 at 7.2%. Net absorption is forecast at about double the pace of new supply for the 2013 to 2016 period, with the rate forecast to fall below 5.0% by the end of the latter year. Modest rent gains of around 1.0% for all of 2012 will be followed by improving annual gains, eventually reaching the vicinity of 4.0%.
The power center vacancy rate is just 4.3% according to Reis, down 50 basis points during the quarter and 70 from a year earlier. The average asking rent for power center space is $28.19 psf, up 0.7% year-over-year. The 540,000-square-foot first phase of Village South at Waugh Chapel, a power center project in Gambrills, has been under construction since 2010. In July another power center, the 600,000-square-foot The District at Canton Crossing in the City of Baltimore, broke ground.
“Greater Baltimore’s retail vacancy rate slightly declined to 6.0% during the second quarter,” according to MacKenzie Commercial Real Estate Services as cited by the Baltimore Business Journal. “The bad news for landlords, though, is the average rent prices also decreased to $17.36 psf.”