Baltimore Commercial Office Space for Rent

Q4 2025

Baltimore Commercial Real Estate Market Report

Focus: Q4 2025 Market Trends

Executive Summary

The Baltimore commercial real estate (CRE) market is showing resilience and stabilization as 2025 draws to a close, with performance varying across sectors. The Office market is navigating a flight to quality, with trophy assets outperforming broader trends despite elevated vacancy [2]. Industrial fundamentals remain healthy, driven by the port's activity and steady logistics demand, though new supply is moderating rent growth [3]. Retail is a bright spot, boasting tight vacancy and positive absorption as consumer spending holds up [4, 5]. Multifamily is absorbing a significant wave of new deliveries, with occupancy stabilizing and rent growth poised to accelerate as construction slows [6, 7].

TenantBase Proprietary Data [8] highlights the distribution of active tenant demand over the last 90 days (192 total deals):

  • Retail/Storefront led market activity with 60.42% of all searches [8].
  • Warehouse was the second most active sector at 26.04% [8].
  • Office accounted for 14.06% of total search volume [8].

Office Market

Market Overview Baltimore's office market continues to face headwinds, with vacancy hovering near historical highs, but leasing activity in top-tier assets suggests a stabilizing core.

  • Vacancy & Availability: The overall vacancy rate stands at approximately 18.7% [2]. Class A vacancy is notably lower in prime submarkets like Harbor East and Fell's Point, reflecting tenant preference for high-quality environments [2].
  • Net Absorption: Net absorption remained negative in Q3 2025, driven by consolidations in the CBD [2]. However, suburban submarkets like Columbia and Towson are seeing more balanced demand [8].
  • Rental Rates: Asking rents have held relatively steady, averaging $24.50 per SF full-service, with Class A rates commanding a premium of over $30.00 per SF [2].
  • Market Drivers: Leasing activity is dominated by smaller requirements, as evidenced by TenantBase data showing strong interest in spaces under 2,500 SF [8].

TenantBase Activity [8]

  • Demand Share: Office accounted for 14.06% of total search volume [8].
  • Lease Term Preference: Tenants favor shorter commitments in the current climate:
    • Less than one year: 41.67% of deals [8].
    • 2-3 Years: 20.83% of deals [8].
    • 3-5 Years: 16.67% of deals [8].
  • Size Requirements: The average lower size requirement for office space is approximately 1,225 SF, reflecting the prevalence of small business activity [8].

Industrial & Warehouse Market

Market Overview Baltimore's industrial sector remains a pillar of the local economy, supported by the Port of Baltimore and robust regional logistics networks.

  • Vacancy & Rent: Vacancy has ticked up slightly to around 6.5% due to new deliveries, but remains healthy compared to national averages [3]. Asking rents are stabilizing after years of rapid growth [3].
  • Demand & Supply: Leasing activity is steady, with 3PLs and distribution users driving demand [3]. The construction pipeline is active but moderating, which should help keep vacancy in check moving forward [3].
  • Leasing Highlights: Demand is diverse, ranging from small bay users to larger distribution requirements [8].

TenantBase Activity [8]

  • Demand Share: Warehouse accounted for 26.04% of total search volume [8].
  • Lease Term Preference: Demand is strongest for mid-term leases:
    • 3-5 Years: 35.71% of deals [8].
    • 1-2 Years: 21.43% of deals [8].
    • 5+ Years: 17.86% of deals [8].
  • Size Requirements: The average lower size requirement for warehouse space is 2,206 SF, with larger requirements in the 5+ Year term category averaging 1,750 SF [8].

Retail Market

Market Overview The retail sector in Baltimore is outperforming expectations, with low vacancy and solid tenant demand across neighborhood and strip centers.

  • Vacancy & Availability: Retail vacancy is tight at 4.3%, one of the lowest rates among major asset classes [4]. Availability is scarce in high-traffic corridors [5].
  • Rental Rates: Rent growth has been positive, rising 2.5% year-over-year as landlords maintain pricing power [4].
  • Construction: New retail development is limited, which is supporting occupancy levels and driving competition for existing second-generation space [5].

TenantBase Activity [8]

  • Demand Share: Retail/Storefront activity dominated with 60.42% of all search volume [8].
  • Lease Term Preference: Retail tenants show a clear preference for longer terms:
    • 3-5 Years: 36.00% of deals [8].
    • 5+ Years: 30.00% of deals [8].
    • Less than one year: 10.00% of deals [8].
  • Top Locations: Tenant interest is highest in Baltimore (City) (18 deals) and Columbia (9 deals) [8].

Multifamily Market

Market Overview Baltimore's multifamily market is stabilizing as it absorbs a supply wave, with fundamentals poised to improve in 2026.

  • Vacancy & Occupancy: Vacancy is estimated at 6.8%, slightly elevated due to recent completions but trending downward [6].
  • Rents: Rent growth has been modest at 1.1% year-over-year, averaging $1,550 per unit, as the market works through supply [6].
  • Construction: The construction pipeline is thinning, with starts down significantly from their peak, setting the stage for tighter conditions ahead [7].
  • Investment: Sales activity is picking up, with investors drawn to Baltimore's yield premium compared to nearby D.C. markets [6].

2026 Outlook

Looking ahead to 2026, the Baltimore market is positioned for steady performance and gradual tightening.

  • Industrial Resilience: The port's expansion and ongoing logistics demand will keep the industrial sector strong, with vacancy expected to remain below 7% [3].
  • Multifamily Recovery: As new supply tapers off, multifamily vacancy is projected to compress, supporting stronger rent growth by mid-2026 [6].
  • Office Evolution: The office market will continue its slow recovery, with activity concentrated in flight-to-quality assets and potential conversions of obsolete stock [2].

Sources

  1. JLL: Baltimore Office Market Dynamics Q3 2025
  2. Newmark: Baltimore Office Market Overview Q3 2025
  3. Newmark: Baltimore Industrial Market Overview Q3 2025
  4. Marcus & Millichap: Baltimore Retail Market Report Q3 2025
  5. Cushman & Wakefield: Baltimore Retail MarketBeat Q3 2025
  6. Yardi Matrix: Baltimore Multifamily Market Report – August 2025
  7. Marcus & Millichap: Baltimore Multifamily Market Report
  8. TenantBase Proprietary Market Data (Baltimore - Last 90 Days)

Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.