More than 2.2 million square feet of space, accounting for 28 buildings, is currently under construction in the greater Baltimore area. The breakdown of asset classes includes two flex/office buildings, 11 warehouse/industrial projects, and 15 commercial office buildings.
Rossville Industrial Park. Photo courtesy of Knott Realty.
“It is a tale of two stories,” explained Chesapeake Real Estate Group Managing Partner Jim Lighthizer. His company broke ground on a speculative, 170,000-square-foot Class A industrial/distribution facility at 1621 Clark Road, in partnership with Sagard Real Estate, last fall.
“Rental rates for this asset class have steadily increased in recent years and are holding steady now, which is a good thing,” he said, “but the challenging issue is a relatively low level of demand.”
Lighthizer is not concerned about the lack of tenants searching for space.
“It is not a question of if our Harford County building will be leased, rather, when, especially since delivery is not expected until later this spring,” he said. “Fundamentals in the greater Maryland region have not changed – led by a prime mid-Atlantic location, access to major population centers and a strong labor market – and high barriers to entry have reduced the number of new projects coming out of the ground.”
Lighthizer added that “there is some blood in the water now” – a general malaise due to slow leasing activity and the overall competitiveness in the market.
“The projects started three to four years ago and are coming to fruition now have major advantages over those on the drawing table.” Lighthizer said, “There are many reasons to be optimistic about the real estate market locally,” while adding that Chesapeake Real Estate Group continues to chase some “big, high-profile projects.”
Knott Realty Group delivered two industrial/warehouse buildings at 9107 and 9115 Yellow Brick Road in Rossville Industrial Park, comprising approximately 276,000 square feet of space, last year.
Knott Realty Group Vice President of Leasing Taylor Fields agrees that 2026 is off to a relatively slow leasing start, but, like Lighthizer, is not overly concerned. In fact, the company is monitoring local conditions with the goal of possibly starting construction on three new flex buildings in Timonium before year-end.
“Last year also started slowly due to the installation of the new administration, tariff talk, and other issues, and businesses took a wait-and-see attitude before activity ramped up significantly,” he said. “In the current environment, we are finding companies searching for better deals, particularly among groups with space in New Jersey, where rental rates are higher. We firmly believe that this is the year where businesses will gain confidence about the economy and start making decisions.”
Fields stressed that Knott Realty Group’s success with newly delivered industrial/warehouse product in Florida adds to the company’s belief in the asset class.
“People had a lot of fear last year, but 2026 is sharply different, and businesses are more positive,” he added.
Featured in this article: Knott Realty Group, Chesapeake Real Estate Group