Baltimore office market momentum continues post-riots

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April’s riots have not slowed the Baltimore area’s office market.

According to a report from MacKenzie Commercial Real Estate Services LLC, in partnership with Sage Policy Group LLC economist Anirban Basu, the riots did not cause any significant damage to that market in the second quarter. In fact the market picked up from the first part of the year.

Net absorption skyrocketed from 14,500 square feet in the first quarter of 2015 to 97,878 square feet in the second quarter of the year. Even in the areas hit by the riot the market produced positive results. In the last year City Center’s direct vacancy fell from 17.2 percent to 15.6 percent, while asking rents increased by more than $1 per-square-foot.

“For whatever reason, the economy seems to be driven increasingly by ultra-successful, rapidly expanding firms. This is likely a reflection of the impact of technology and globalization, which permits some firms to generate incredible rates of growth while suppressing the economic prospects of others,” according to the report.

Much of the growth in the City Center is being driven by high-end office space. That’s a trend that has remained steady for more than a year in the Baltimore market. In the past year Class A office space near downtown has seen asking rents go up by roughly $4 a square foot while Class B office space is about $1 from where it was the year before.

Basu said the good news in Baltimore is part of a larger economic resurgence in the state. The report also concludes that the negative impact of sequestration on the local economy is diminishing, which is also resulting in a rebound in the Washington, D.C, area.