Q3 2020 Baltimore Market Report

The Baltimore office market continues to show softening as the effects of COVID considerably accelerated changes in the third quarter of 2020. Leasing activity continued to slow, with total leased square feet dropping nearly 58.4% from year-ago levels. Overall vacancy for Baltimore’s Q3 office market ended at 14.2%, up 70 basis points from year-ago levels. Market softening is expected to continue through 2021 as low demand and economic uncertainty have a lasting impact pre-vaccine. Average office asking rates recorded a $0.63/SF increase from year-ago levels, ending at $24.70/SF. Third-quarter asking rents recorded the first drop from previous quarter levels, further exhibiting market softness as COVID continues to pressure the market. Despite COVID’s negative impact on business activities, landlords continue to appear optimistic that underlying demand is strong. The coronavirus’s duration and scope will dictate Baltimore’s recovery timeline; however, its office market’s stability prior to COVID continues to provide some insulation against the severity of the initial market shock.