Despite falling vacancy rates and rising rents across the Baltimore metro area, the pipeline of future apartments is down except in the city’s affluent southern suburbs.
Wood Partners’ Alta Federal Hill, located at 1800 South Hanover St. in Baltimore, was the only project to deliver new units in the metro area from June 2021 through June 2022.
The average vacancy rate for stabilized apartment buildings in and around Baltimore in the second quarter was 1.7%, down from 2% a year earlier, according to the Q2 report from Delta Associates. The rate was even lower in the suburbs, which have not seen a single new apartment delivered in the last 12 months.
While rents are up more than 10.5% year over year in both the city of Baltimore and its suburbs, the pipeline of future apartments extends only to the southern part of the city. area, as new projects from Odenton to Columbia have increased life by 36 months. pipeline from 1,491 units at the end of June 2021 to 1,637 a year later.
By comparison, the northern suburbs pipeline has grown from 914 to 391, and the number of upcoming apartment projects in the city over the next three years has grown from 2,715 to 2,278.
“Only 275 [units] came to market in the Baltimore metro area in the past 12 months, a far cry from the more than 1,600 units shipped the year before,” Delta’s report said. “The lack of new products resulted in a 57% decrease in uptake over the year.”
The additional supply is much needed as the 12 month period ending with the second quarter of this year saw 306 units absorbed in the southern suburbs, compared to 1,308 units absorbed the previous year.
Howard County, and particularly Columbia, is where most new construction is concentrated, particularly in The Howard Hughes Corp.’s Merriweather District, anchored by the Merriweather Post Lodge and located just south of downtown. City of Columbia from the developer.
Courtesy of The Howard Hughes Corp.
Marlow in the Merriweather neighborhood of downtown Columbia
Construction is already underway on Howard Hughes’ 472-unit Marlow project, which is expected to start leasing soon and be complete by the end of this year, a spokesperson said. The apartment project is located just south of the amphitheater and is expected to include approximately 32,000 square feet of retail space.
Merriweather District plans were accelerated early last year after the pandemic-induced flight to the suburbs gave Howard Hughes leaders the confidence to invest more in planned communities like Columbia.
“As we move forward, we expect Downtown Columbia to be a driving force with the development of future office, retail and multi-family assets supported by historically strong demand,” said Greg Fitchitt, president of Plan Columbia. from the developer, in a statement last year.
Recognizing the high demand for housing, Howard County also began identifying and funding affordable projects in Colombia. This includes the 76-unit Patuxent Commons, run by Mission First Housing Development Corp., and the new Cultural Center, which includes 174 units and a ground floor with cultural amenities for the public.
The southern suburbs also have other major projects on the cards. In Anne Arundel County, a workforce housing development by Conifer Realty, Blue Oaks in Odenton, is set to transform a former strip mall into 150 affordable housing units.
While the dynamic builds in the southern suburbs of Baltimore, it plays out unevenly across the city.
While the Federal Hill/Locus Point submarket had the only project that delivered units to market this year – Wood Partners’ 275-unit Alta Federal Hill – its three-year pipeline grew from 1,222 units a year. last at just 351 this year, according to Delta. Effective rents in the neighborhood are still half a percentage point lower than 2017 levels, compared to the city’s average rent, which is 0.6% higher than five years ago.
On the other hand, the Fells Point/Inner Harbor submarket saw its pipeline grow from 527 to 1,381 units between June 2021 and June 2022. Domestic developers like Greystar, which is building its first project in Baltimore, and players from the DC region like Elm Street communities and urban investment partners have strengthened the area.
When completed, Greystar’s Elan Brewer’s Hill project is expected to feature 500 market-priced units and 23,000 square feet of amenity space as part of the 28 Walker Development collective in the planned community of Canton.
Elm Street is developing a 285-unit project at 2001 Aliceanna St. that is expected to be delivered by the end of this year, and UIP plans to deliver a 290-unit building in the Inner Harbor next year, according to Delta.