Baltimore Multifamily Market Report Q3 2025
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Baltimore Q3 Baltimore Multifamily Market Review
Overview ~700 units Trailing-12 absorption The Baltimore multifamily market held steady through Q3 2025.
Leasing activity improved modestly, supported by fewer new deliveries and stable renter demand in workforce segments. Absorption trailed long-term norms but remained positive, helping offset the small wave of Class A completions earlier in the year.
~2,400 units 10-year average absorption 7.6 % 10-year average absorption ~980 Units delivered (past 12 months) ~2,900 Units under construction 1.1 % Rent growth (YoY) DATAPOINTS
Analyst Commentar y Market Conditions Based on ongoing discussions with local owners, leasing teams, lenders, and receivers, Midfield is observing a clear increase in financial distress across parts of the market.
Lenders that previously delayed action on delinquent loans have shifted toward more aggressive enforcement, including calling loans due. Recent examples include the ~$300M DSCR loan delinquency and the Chasson portfolio, which has entered the foreclosure process involving several hundred local units.
This shift is creating a more pronounced buyer-advantaged environment . Investors who have been waiting on the sidelines may now have opportunities to acquire assets 10–20% below pricing from 24 months ago , particularly when paired with a strong operational plan and the ability to stabilize distressed properties.Class A completions earlier in the year.
Rent & Vacancy Rent growth has remained modest but consistent.
Class B and C properties continue to attract tenants priced out of newer luxury units, keeping effective rents resilient. Vacancy sits at 7.6 %, showing balance between leasing demand and a limited construction pipeline.
~1.1% Metro Rent Growth (YoY) DATAPOINTS ~0.3% U.S. Rent Growth (YoY) 7.6% Metro Vacancy ~700 units Absorption (past 12 months) ~980 units Deliveries (past 12 months) ~2,900 units Pipeline (under construction) RECENTLARGE ADDITIONS ~3700 units Downtown & Canton ~740 units Harford County
Analyst Commentar y Rent & Vacancy Although reported rents show a 1% increase, this is nominal , and with inflation above 3%, real rents are effectively declining . Additionally, we believe published vacancy rates understate true conditions. Many Class B/C assets show actual vacancy closer to 10% , based on direct conversations with owners and leasing agents. Delinquency has also risen, especially among less hands-on ownership groups.
In several submarkets—including 21215 and 21213— rents have declined up to 10% , driven in part by updated subsidy payment standards. Overall, true on-the-ground performance is softer than reported data suggests.
Despite this, today’s market gives buyers the opportunity to acquire assets 10–20% below pricing from two years ago , operate at conservative rent levels, and still stabilize effectively through improved management and service.
Rent & Vacancy
Sales & Construction Investment activity increased this year as pricing adjusted and local capital returned to the market.
Up significantly from $490M in 2023 $ 8 3 5 MTOTALSALESVOLUME Still below the 10-year average of $1.8B Majority of transactions involve stabilized Class B & C properties.
WHAT ’ SSELLING ?
Buyers favor assets with realistic capex needs and predictable rent-growth potential.
On the development front, new construction remains measured. Only ~980 units were delivered in the last year compared with a 10-year average of 2,900 units. Roughly 2,900 units are now underway, suggesting supply growth will stay manageable through 2026.
DATAPOINTS ~$835 M Sales Volume (T-4Q) ~$490 M 2023 Sales Volume ~$1.8 B 10-Year Average Volume ~6.3 % Market Cap Rate ~8.2 % Average Transaction Cap Rate (2024-25) ~980 Units Delivered (Past 12 months) ~2,900 Units Under Construction
Sales & Construction Property Rating Units Stories Start Complete Developer/Owner The Frank 2500 Insulator Dr 420 4 May 2023 Dec 2025 Greystar Real Estate Partners Brewers Hill AvalonBay 3700 Boston St 418 7 Mar 2025 Jan 2027 AvalonBay Communities, Inc.
Gunther Bottle LLC 6 Hamill Rd 350 6 Jan 2025 Mar 2027 Questar Properties, Inc.
Caves Valley Partners 222 St. Paul Pl 303 37 Jan 2025 Jun 2026 Urban Investment Partners Erie Insurance 210 N Charles St 231 15 Jan 2024 Dec 2025 Trademark Properties Ellicott Mill Apartments 27 Frederick Rd 190 8 Mar 2025 Sep 2026 Terra Nova Ventures LLC Ellicott Flour Mill LLC Forge Overlook 4151 Maple Avenue 182 4 Feb 2024 Dec 2025 - - The Residences at Milestone 7962 Milestone Parkway 182 4 Apr 2025 May 2026 Soto Architecture & Urban Design Legacy at Cedar Lane I/II 5513 Cedar Ln 123 4 Sep 2025 Sep 2026 - The Hammond at Greenmount 1100 Greenmount Ave 109 4 Jun 2024 Dec 2025 ReBUILD Metro City of Baltimore
400 Park Ave 94 6 Oct 2023 Dec 2025 - The Vision at Parkway 5535 Cedar Ln 83 4 Sep 2025 Sep 2026 Enterprise Community Partners Patuxent Commons 6441 Freetown Rd 76 3 Oct 2024 May 2026 Mission First Housing Group Phoenix on Park 265 Park Ave 44 3 Jan 2022 Dec 2025 Dominion Properties, LLC The Standard on Bond 128 N Bond St 30 5 Feb 2025 Jun 2026 Partners For Development The Xander 600 N Howard St 19 5 Jan 2023 Dec 2025 Blank Slate Dev 1801 Guilford 1801 Guilford Ave 12 2 Oct 2023 Dec 2025 - The Billy 91–93 Main St 10 4 May 2025 May 2026 Brown Contracting Company Oyster Place 337–339 S Fremont Ave 9 3 Feb 2025 Dec 2025 Ben Garner
400–402 Pitman Pl 6 2 Jan 2024 Jan 2026 - 456 Pitman Pl 5 3 Jan 2024 May 2026 - UNDER CONSTRUCTION
Analyst Commentar y Sales & Construction Sales activity is rising as market distress forces more owners to transact. Many groups that purchased in 2020–2022 are now facing lower rents, higher vacancy, and increased delinquency, leaving them with limited options: refinance at higher rates, sell at a loss, or enter foreclosure. This dynamic is visible across the market, with large assets such as Dutch Village now in receivership , and numerous other properties moving toward short sales or pre-foreclosure. As a result, buyers are re-entering the market and securing opportunities 10–20% below pricing from two years ago, with
several sellers taking multimillion-dollar reductions to get deals closed.
Construction activity continues to lag well below historical norms. Only ~980 units were delivered over the past year, compared with a 10-year average of ~2,900.
While data sources list roughly 2,900 units under construction, conversations with developers suggest actual active development may be lower due to project pauses and cancellations that have not yet been updated in market datasets. This slowdown is setting the stage for a future supply gap; as projects typically take about two years to deliver, we expect tighter supply conditions to support rent growth recovery by 2027 .
Overall, the combination of distressed sellers and limited new construction presents a rare window for buyers: acquire well-located assets at discounted pricing, operate conservatively in the near term, and benefit from improved fundamentals as supply constraints materialize.
Economy 0.3 % vs. U.S. 0.8 % Labor Force Growth (10-yr CAGR) Baltimore’s economy continues to provide a stable foundation for workforce housing.
The metro’s labor market grew modestly, anchored by healthcare, education, and logistics. Median household income reached about $102K, rising ~3.5 % annually over the past decade. Population growth is slow but steady, with in-migration largely from renters seeking affordability compared to DC and Northern Virginia.
3.4 % Unemployment Rate $102 K Median Household Income (metro) ~3.5 % annually Income Growth (10 yr) 0.6 % Household Growth (10 yr CAGR) 0.2 % Population Growth (recent YoY) DATAPOINTS 0.1 % annual Population Forecast (5 yr)
Analyst Commentar y Economy Baltimore’s economy is showing early signs of improvement, highlighted by the first meaningful population increase in several years. This reflects renewed in-migration from renters seeking a more affordable alternative to other East Coast markets, especially as places like South Florida have become significantly more expensive. Despite Baltimore City’s higher water and tax burdens, the region still positions itself as a cost-effective option relative to major coastal metros.
However, several economic challenges remain. Maryl and has shed roughly 15,000 jobs since January, including 6,000 positions lost at the Social Security Administration. Johns Hopkins also absorbed approximately $800M in federal funding cuts , directly impacting student demand, hiring, and the broader healthcare ecosystem. The ongoing federal government shutdown compounds these pressures by slowing economic activity and delaying the release of essential labor and inflation data needed for upcoming Federal Reserve decisions.
These macroeconomic shifts are mirro red in the real estate sector. Distress is rising across the multifamily market, with major examples such as the $300M+ DSCR loan delinquency , Dutch Village entering receivership, and Chasen’s expected restructuring. Similar patterns are emerging across smaller ownership groups facing lower rents, higher vacancy, and elevated delinquency. For investors, this environment creates opportunity: with disciplined underwriting and strong operational capabilities, assets can be acquired at meaningful discounts.
Interest rates have eased slightly, declining by roughl y 50 bps since the start of the year. While a December rate cut remains uncertain, economic softness and the impact of the shutdown may pressure the Federal Reserve toward future easing. Investors should closely monitor long-term agency debt, local bank pricing, and private lending spreads as rate movements will continue to shape deal feasibility.
Overall, while short-term conditions remain mixed, Baltimore’s proximity to Washington, D.C., and the stability of its core sectors—healthcare, education, and logistics—support the expectation of gradual recovery over the next two years.
Projection Looking ahead into 2026, Baltimore’s multifamily fundamentals appear stable.
Rent growth should remain modest but positive, especially across Class B and C assets that cater to value-oriented renters.
Vacancy is expected to hover near 7–8 % as new deliveries lease-up. Investment activity will likely hold at current levels as lending conditions gradually ease.
DATAPOINTS
Analyst Commentar y Market Outlook Looking ahead to 2026, Baltimore’s multifamily market is expected to remain stable, with modest rent growth of 1–2% and vacancy holding in the 7–8% range as the current ~2,900-unit construction pipeline delivers and leases up. Class B and C assets should continue to perform steadily, supported by value-oriented renter demand and controlled new supply.
From an investment standpoint, buy ers with sufficient equity and reserves will be well-positioned. Distressed assets continue to emerge, and the investors who succeed will be those who understand the local landscape and pair acquisitions with strong, hands-on management and leasing teams. Many out-of-state owners struggled over the past cycle due to poor management selection—something local expertise can directly mitigate.
Transaction cap rates for B/C assets are expected to remain in the 7.5– 8.5% range, with investment activity holding near current levels as lending conditions gradually ease. By 2027, we anticipate rent growth strengthening as the slowdown in new construction works its way through the market and recently acquired distressed assets stabilize.
Overall, buyers entering the market now—pr epared to operate efficiently and select the right teams—can position themselves for meaningful upside as fundamentals normalize over the next two years.
Current Debt Rates Baltimore’s debt market continues to show resilience despite elevated interest rate pressures.
Lenders across residential, agency, and construction products have maintained relatively stable pricing this quarter, with underwriting discipline remaining firm. Demand has shifted toward lower leverage and longer-term certainty, particularly among multifamily investors seeking predictable debt service.
Overall, borrowers now have clearer expectations around rate ranges, even as capital remains selective and project fundamentals are scrutinized more closely.
~ 5.25%–5.75% ~ 5.1%–6.5% ~ 6.1%–6.9% ~ 6.0%–7.0% Rates are as of 11/19/2025 and represent general ranges. Actual rates vary based on deal structure, leverage, asset quality, borrower strength, and market conditions.
Multifamily Conventional Rates & Spreads Agency (Fannie/Freddie – Multifamily) Life Companies CMBS Banks / Credit Unions ~ 8%–10%+ Bridge / Debt Funds
Recent Property Sales Sold Units Multifamily 244 Wakefield & Forest Glen Sold Units Multifamily 4901 York Rd Sold Units Multifamily 3600 Garrison Blvd Sold Units Multifamily 5801 Narcissus Ave
330 Units | Multifamily 600 5th Ave Under Contract 16 Units | Multifamily 2107-2111 Park Ave Under Contract 19 Units | Multifamily AA County Portfolio Under Contract 7 Units | Multifamily 902 Arion Park Rd Under Contract Under Contract Properties
ENDEL DALFIN irector 0-916-9256 endel@midfieldre.com This memorandum is for informational purposes only and does not constitute an offer to sell or a solicitation to buy securities. Investors should conduct their own due diligence, and the information provided is not guaranteed for accuracy or completeness. The offering involves significant risks, and past peformance is not indicative of future results. The Company reserves the right to withdraw or modify the offering at any time 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