Baltimore Multifamily Market Report Q2 2024
Download the Market Report Q2 2024 (PDF)
Market Report 2024 Q2 Baltimore
Steady Demand and Robust Absorption
The market has absorbed approximately 4,300 units, surpassing the 10-year historical average. This strong demand indicates a promising trajectory for 2024, with this year likely ranking among the highest in terms of multifamily absorption in recent history. Both urban and suburban submarkets, including Canton, Downtown Baltimore, and surrounding counties, have experienced significant positive absorption, highlighting the city’s continued appeal to renters.
Even with th e addition of over 7,500 new units in the past three years, the vacancy rate has remained stable, reflecting the market’s ability to balance supply with demand effectively. This stability is a testament to Baltimore’s resilience and its position as a desirable market for multifamily investments.
The Baltimore multifamily market continues to show impressive strength, with the demand for apartments surging over the past year 3,825 12 Mo Delivered Units 4,692 12 Mo Absorption Units 6.7% Vacancy Rate 2.6% 12 Mo Asking Rent Growth
E Key Indicators © 2024 CoStar Group - Licensed to Midfield Properties
Improving Vacancy Rates & Rent Growth
This reduction in vacancy is particularly notable given the substantial new supply entering the market. The market’s stability has also supported a rebound in rent growth, which is currently outpacing the national average. As demand continues to outstrip supply, rents are expected to maintain their upward trajectory, particularly in sought- after areas like East and North Baltimore.
In addition, rent growth has been robust across various market segments, with the most significant gains observed in high-demand submarkets such as East Baltimore and North Baltimore City. This trend is indicative of a market that is not only stabilizing but also evolving, with strong prospects for continued growth in the coming quarters.
Baltimore’s vacancy rate has seen a favorable decline, now standing at its lowest since early 2023
E Vacancy © 2024 CoStar Group - Licensed to Midfield Properties 2,000 1,500 1,000 500 -500 -1,000 -1,500 9% 8% 7% 6% 5% 4% 3% 2% 14% 12% 10% 8% 6% 4% 2% 0%
© 2024 CoStar Group - Licensed to Midfield Properties E Vacancy 14% 12% 10% 8% 6% 4% 2% 0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5%
E Rent Growth $2,000 $1,900 $1,800 $1,700 $1,600 $1,500 $1,400 $1,300 14% 12% 10% 8% 6% 4% 2% 0% $1.90 $1.85 $1.80 $1.75 $1.70 $1.65 $1.60 $1.55 $1.50 $1.45 $2,200 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 © 2024 CoStar Group - Licensed to Midfield Properties
E 4 & 5 Star Expenses Per SF (Annual) Expenses are estimated using NCREIF, IREM, and CoStar data using the narrowest possible geographical definition from Zip Code to region.
© 2024 CoStar Group - Licensed to Midfield Properties
Active Construction, Strategic Development & Strong Sales Activity
Baltimore’s construction landscape remains dynamic, with around 2,700 units under development Primarily in key areas like Downtown Baltimore, Canton, and Federal Hill. A standout project is Harbor Point, a mixed-use development set to deliver nearly 600 luxury apartments in 2024, reflecting the trend toward vibrant live-work-play environments.
Sales activity in the mult ifamily sector remains robust, highlighted by the Q2 2024 sale of the 414 Light Street apartments, a luxury high-rise in Downtown Baltimore, for approximately $240 million. This transaction underscores strong investor confidence in Baltimore’s multifamily market.
Add itionally, at Midfield, we recently sold an 18-unit building near Johns Hopkins for a little over $180,000 per unit. Our ongoing listing of a 244-unit property as a recapitalization further demonstrates that, with creativity, deals are still achievable even in a higher interest rate environment.
These de velopments and transactions underscore the vibrancy and potential of Baltimore’s multifamily market, with strategic focus ensuring continued momentum.
E Sales Volumen & Market Sale Price Per Unit $300,000 $280,000 $260,000 $240,000 $220,000 $200,000 $180,000 $160,000 $140,000 $120,000 $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% Market Cap Rate © 2024 CoStar Group - Licensed to Midfield Properties
E Sale Comparable Sale Comparables $124 Avg. Price/Unit (thous.)
$9.4 Avg. Price (mill.)
5.8% Avg. Vacancy at Sale 2.4 © 2024 CoStar Group - Licensed to Midfield Properties
3602 Monterey Rd Sale Price $3,000,000 Price per Unit $83,333 36 Units 1810 McCulloh St Sale Price $205,000 Price per Unit $34,166 6 Units 615 N Carrollton Ave Sale Price $900,000 Price per Unit $150,000 6 Units 300 E 30th St Sale Price $3,250,000 Price per Unit $180,555 18 Units N Calvert Sale Price $1,700,000 Price per Unit $94,444 18 Units Station North Sale Price $1,980,000 Price per Unit $165,000 12 Units 1700 Madison Sale Price $350,000 Price per Unit $38,888 9 Units Recently Closed Transactions
Multifamily Auction Offerings 3612 Eldorado Ave Baltimore, MD 21207 18 Units 1611-1613 Gwynns Falls Pkwy Baltimore, MD 21217 17 Units | Under Contract 4901 York Rd Baltimore, MD 21212 13 Units 14-16 E Madison St Baltimore, MD 21202 20 Units | Under Contract
Exclusive Offerings 2107-2111 Park Ave Baltimore, MD 21217 Hillside Manor Baltimore, MD 21216 16 Units | Multifamily 244 Units | Multifamily 2620-2630 E Northern Pkwy Baltimore, MD 21214 15 Units | Multifamily 201 E North Ave Baltimore, MD 21202 499 Beaumont Ave Baltimore, MD 21212 12 Units | Multifamily 18 Units | Multifamily 2800 N Calvert St Baltimore, MD 21218 9 Units | Multifamily
Exclusive Offerings 5109 York Rd Baltimore, MD 21212 3,750 SF GLA | Retail 6515 Belair Rd Baltimore, MD 21206 316 N Paca St Baltimore, MD 21201 19,442 SF RBA | Retail 8 Units | Multifamily 6200 Harford Rd Baltimore, MD 21214 201 Milford Mill Rd Pikesville, MD 21208 6,400 SF GLA | Retail 14,077 SF RBA | Retail 5900 York Rd Baltimore, MD 21212 17,100 SF GLA | Retail
Local Economic Recovery & Long-Term Stability
E The reopening of the Port of Baltimore has been a significant boost, helping to stabilize the local economy. Job growth, especially in sectors like Professional Services, Government, and Transportation, is contributing to the overall economic recovery, which bodes well for the multifamily market.
Looking ahead, Baltimore’s multifamily sector is expected to benefit from steady population growth and a continued influx of educated professionals. With the region’s population stabilizing and projected to grow through 2028, the demand for quality housing is likely to remain strong. This growth, coupled with ongoing efforts to preserve affordable housing, underscores Baltimore’s potential for long-term stability and prosperity in the multifamily sector.
The economic landscape in Baltimore has shown resilience, particularly following the challenges earlier in the year
E Baltimore Employment by Industry in Thousands Industry Jobs LQ Market US US Market US Market © 2024 CoStar Group - Licensed to Midfield Properties
E Economy 10% 5% 0% -5% -10% -15% 100K 50K -50K -100K -150K -200K © 2024 CoStar Group - Licensed to Midfield Properties E
E Economy © 2024 CoStar Group - Licensed to Midfield Properties 14% 12% 10% 8% 6% 4% 2% 0% $110K $100K $90K $80K $70K $60K
E © 2024 CoStar Group - Licensed to Midfield Properties 10K 8K 6K 4K 2K -2K -4K -6K -8K -10K 0.8% 0.6% 0.4% 0.2% 0.0% -0.2% -0.4%
E Demographic Trends © 2024 CoStar Group - Licensed to Midfield Properties 0.4% 0.2% 0.0% 0.6% 0.4% 0.2% 0.0% 4% 2% 0% © 2024 CoStar Group - Licensed to Midfield Properties
Global Economy & Debt
The reopening of the Port of Baltimore has been a significant boost, helping to stabilize the local economy. Job growth, especially in sectors like Professional Services, Government, and Transportation, is contributing to the overall economic recovery, which bodes well for the multifamily market.
Looking ahead, Baltimore’s multifamily sector is expected to benefit from steady population growth and a continued influx of educated professionals. With the region’s population stabilizing and projected to grow through 2028, the demand for quality housing is likely to remain strong. This growth, coupled with ongoing efforts to preserve affordable housing, underscores Baltimore’s potential for long-term stability and prosperity in the multifamily sector.
The economic landscape in Baltimore has shown resilience, particularly following the challenges earlier in the year Conventional Multifamily Loans Rates are 6.25% to 7.00%, depending on credit and property specifics.
Fannie Mae & Freddie Mac Loans GSE loans rage from 5.75% to 6.50%, ideal for larger, stable properties.
HUD/FDA Loans Offer some of the lowest rates at 4.75% to 5.50%, especially for affordable housing projects.
Bridge Loans Short-term financing at 7.50% to 9%, useful for renovations or quick acquisitions.
CMBS Loans Used for large projects, with rates between 6.50% and 7.25% Mezzanine Financing Higher leverage with rates from 9.00% to 12.00%, sitting behind primary debt.
Estimated Debt Rates for Multifamily & Commercial Real Estate (August 2024)
Disclaimer The statements an d information provided in this quarterly review by Midfield Realty are intended as a general market overview based on our research and analysis. These statements are not necessarily factual and should not be relied upon as the sole basis for any investment or transaction decisions. We strongly advise all clients and readers to use appropriate platforms and data sources to verify information before making any investment or transaction decisions.
Copyright Stateme nt This quarterly review is the intellectual property of Midfield Realty.
Unauthorized use, reproduction, or distribution of this material is strictly prohibited. Please contact Midfield Realty for permissions or inquiries regarding the use of this content.
YAAKOV KANEVSKY Managing Director 410-498-5408 yaakov@midfieldre.com 3635 Old Court Rd Suite 403 Pikesville, MD 21208 www.midfieldre.com | info@midfieldre.com | (410)-324-6939 MENDEL DALFIN Director 410-916-9256 mendel@midfieldre.com