Bold, straightforward truth: the 2025 market proved remarkably strong for Baltimore-area commercial real estate, and the momentum carried into 2026. At MacKenzie Companies’ State of the Market event at The Elkridge Club, over 70 professionals spanning finance, development, law, appraisal, and various real estate disciplines gathered to hear current trends across asset management, brokerage, capital markets, construction, and the industrial, office, and retail sectors. The session featured Brendan Gill, President & COO of MacKenzie Ventures, and Owen Rouse, Senior Vice President of Investment Sales at MacKenzie Commercial Real Estate Services.
Rouse emphasized that intentional decision-making is increasingly essential in a market under heightened scrutiny from financiers. Real estate investing now demands discipline, careful execution, and long-range planning to position portfolios for enduring success. Partnering with firms that deliver premium asset management and strategic guidance is more important than ever.
Jack Ward from MacKenzie Capital noted robust capital availability across sources, with industrial and multifamily leading the pack and retail a close third. Lenders are tightening liquidity requirements and applying tighter debt-service standards, yet competition among lender groups is intensifying as spreads narrow.
On the tenant side, landlords face heightened scrutiny during long-term lease negotiations. Location and amenities have become less decisive compared to a landlord’s ability to fund tenant improvements and sustain performance throughout the lease term, according to Gill.
Leasing timelines have lengthened. Tenants increasingly probe landlords’ liquidity and the so-called flight-to-quality that previously favored Class A properties is now affecting Class B assets as premium space fills. Permitting times can stretch to about 14 weeks, delaying tenant build-outs. Rising construction costs and labor shortages further compress timelines, while tenants demand proof that landlords possess the expertise to manage assets effectively. The takeaway: due diligence has intensified across the board.
Patrick Smith highlighted a softening in warehouse/industrial activity, though Hunt Valley remains exceptionally strong. Rent growth slowed to roughly 2% last year—the lowest since 2012—and building prices dropped about 5%. Industrial Outdoor Storage has cooled after years of rapid gains. Yet Smith remains optimistic: a dearth of new construction starts makes existing properties more attractive, and solid fundamentals plus Baltimore’s overall economic strength should translate into higher activity soon.
Jill Harmon described tenant preferences evolving toward landlords who consistently deliver best-in-class asset and property management. She champions a three-legged stool of services: comprehensive financial management, maintenance of the physical plant, and unwavering tenant relations. A strict preventive maintenance program helps detect small issues before they become costly failures, saving time and money.
Retail resilience remains evident. Mike Ruocco pointed to strong consumer activity—restaurants bustling, flights routinely full from BWI—and a national vacancy rate around 4%. Retail continues to prosper, with dining and entertainment driving occupancy. When tenants depart, new operators are waiting, so nimble landlords who communicate well and act responsibly continue to win leases.
Scott Albright underscored the real obstacle isn’t just higher material costs but a severe skilled-labor shortage that drives delays and price increases. He used a bricklaying example to illustrate how a lack of tradespeople can double project timelines and costs, urging the next generation to consider trades as a lucrative, durable career path.
Key takeaways include:
- 2025 headwinds from tariff and tax policies, labor challenges, lower property valuations, and rising construction costs.
- Several national firms have moved to five-day in-office schedules, including AT&T, Barclays, Dell, Goldman Sachs, Google, M&T Bank, and Tesla.
- Lenders now prioritize debt service coverage, borrower liquidity, rollover, and credit, with tighter standards and closer scrutiny of assets.
- 2026 has started strong, buoyed by reduced economic and real estate uncertainty, lower interest rates, improved capital availability, and better alignment between buyers and sellers.
MacKenzie Companies, based in Lutherville, operates five full-service divisions—MacKenzie Commercial Real Estate Services, MacKenzie Management Company, MacKenzie Contracting Company, MacKenzie Capital, and MacKenzie Investment Group—providing tailored real estate solutions to institutional owners, corporations, and individuals. For more information, visit www.mackenziecommercial.com.
