STATE OF DOWNTOWN DOWNTOWN BALTIMORE REPORT...

ISSUED MARCH 2015

DOWNTOWN BALTIMORESTATE OF DOWNTOWN REPORT 2014

SetonHill

HeritageCrossing

Otterbein

CamdenYards

Ridgely’sDelight/

Stadiums

FederalHillSharp-

Leadenhall

HarborPoint

HarborEast

LittleItaly

Old Town

JohnstonSquare

StationNorth

BoltonHill

StateCenter

MountVernon

UMB

Bromo

CathedralHill

PrestonGardens

CityHall

InnerHarbor

CharlesCenter

Westport

SouthBaltimore

LocustPoint

University of MarylandMedical Center Midtown

VA Hospitalof Maryland

Universityof Maryland

Medical Center

MercyMedicalCenter

JohnsHopkinsHospital

KennedyKriegerInstitute

One mile radius from Pratt & Light intersection

RoyalFarmsArena

HistoricJonestown

Poppleton

Pigtown/Washington

Village

Fells Point

2014 ONE-MILE RADIUS TOTALS

Employment ......................... 123,879

Residents ...............................41,606

Office Space .........................28M S.F.

Hotel Rooms ............................8,000

T O P 2 5 L A R G E S T U . S . M E T R O A R E A S : O N E - M I L E R A D I U S S TAT I S T I C S

POPULATION

1 New York 188,496

2 San Francisco 119,707

3 Chicago 92,316

4 Philadelphia 80,406

5 Los Angeles 77,013

6 Seattle 61,211

7 Boston 49,620

8 Washington, DC 44,120

9 Baltimore (8) 41,606

10 San Diego 40,486

11 Denver 38,873

12 Miami 36,819

13 Minneapolis 34,856

14 Houston 24,144

15 Portland 22,787

16 Atlanta 20,163

17 Pittsburgh 18,145

18 Orlando 17,986

19 Dallas 16,488

20 Charlotte 16,202

21 Phoenix 15,313

22 St. Louis 12,231

23 Tampa 10,627

24 San Antonio 9,061

25 Detroit 6,881

AVERAGE HOUSEHOLD INCOME

1 New York $157,807

2 Washington, DC $120,671

3 Chicago $119,862

4 Boston $115,738

5 Charlotte $97,266

6 Houston $93,140

7 Philadelphia $91,570

8 Tampa $86,941

9 Dallas $82,168

10 San Diego $76,310

11 San Francisco $74,371

12 Miami $73,258

13 Minneapolis $71,870

14 Seattle $71,793

15 Baltimore (14) $71,625

16 Portland $71,298

17 Denver $68,751

18 Pittsburgh $63,177

19 Orlando $58,120

20 San Antonio $56,639

21 Atlanta $56,269

22 St. Louis $54,089

23 Los Angeles $44,781

24 Detroit $44,407

25 Phoenix $37,922

HOUSEHOLDS OVER $75,000 ANNUAL INCOME

1 New York 67,566

2 Chicago 31,114



5 Seattle 12,811


7 Boston 12,685

8 Denver 7,924

9 San Diego 7,892


11 Miami 6,321


13 Baltimore (12) 5,854

14 Dallas 4,111

15 Portland 3,708

16 Charlotte 3,215

17 Houston 2,977

18 Orlando 2,614

19 Tampa 2,413

20 Atlanta 1,726

21 Pittsburgh 1,655

22 St. Louis 1,597

23 Phoenix 817

24 San Antonio 736

25 Detroit 706

EMPLOYMENT

1 New York 1,193,065

2 Chicago 378,993


4 Boston 244,628



7 Seattle 211,125

8 Houston 199,186



11 Denver 133,089

12 Baltimore (12) 123,879

13 Dallas 121,460

14 Pittsburgh 110,539

15 Atlanta 99,413

16 Charlotte 81,047

17 San Diego 78,773

18 San Antonio 77,621

19 Detroit 65,011

20 Miami 59,944

21 Phoenix 58,689

22 Orlando 56,752

23 St. Louis 55,235

24 Tampa 43,145

25 Portland 38,896

( ) - last year’s ranking *Source: Claritas

Mario Polèse, author of The Wealth and Poverty of Regions: Why Cities Matter, has observed that, “Not so long ago, most urbanists were predicting the demise of downtowns. The data, after all, pointed unambiguously to declining central-city populations and expanding suburban ones in nearly every American metropolitan area between 1950 and 1980. But downtowns didn’t go the way of the dinosaur. In fact, most of them have begun to grow again.”

He’s right. Nationally, employment in city centers is growing while suburban employment growth is

beginning to decline. Citing numerous studies, Polèse fi nds that the keys to this growth include a

resurgence in business services jobs, neighborhoods that are active 24 hours a day, and, perhaps most

importantly, a mixed-use symbiosis created when people cluster where they work with where they live.

Downtown Baltimore, in 2014, continued to capitalize on all these trends, growing its employment and

residential base, adding retail, welcoming performance venues like Chesapeake Shakespeare Theatre,

and seeing increased private sector activity that included high-value commercial real estate transactions

and progress on long-awaited projects such as One Light Street, Mechanic Center, and the former

McCormick site.

2

NOTABLE LEASE TRANSACTIONS

Name Address Type of Lease Business Type Sq. Footage

OneMain Financial 100 International Dr. Relocation Financial Services Firm 109,156

Pandora Jewelry, LLC 250 W. Pratt St. New Lease Jewelry Manufacturing & Distribution 87,862

Maryland State Retirement and Pension System 120 E. Baltimore St. Renewal & Expansion State Government 72,373

Downtown Partnership of Baltimore, Inc. 20 S. Charles St. Relocation Nonprofi t Organization 22,027

Behavioral Health System Baltimore 1 N. Charles St. Relocation Nonprofi t Organization 21,998

Cigna 111 S. Calvert St. New Lease Insurance Company 21,417

CBRE Group, Inc. 100 E. Pratt St. Relocation Commercial Real Estate Firm 15,971

Shapiro Sher Guinot & Sandler 250 W. Pratt St. Relocation Law Firm 15,530

KAO USA Inc. 100 N. Charles St. New Lease Beauty Product Manufacturing & Distribution 14,486

2014 OFFICE MARKET STATISTICS

Year End 2013 Year End 2014

Vacancy 16.1% 16.8%

Rents – Class A $22-$27 $22-$27

Rents – Class B $16-$19 $16-$20

* Class A/B Rent Sources 2013: Cassidy Turley, CBRE, Cushman & Wakefi eld, and Newmark Grubb Knight Frank* Class A/B Rent Sources 2014: CBRE, Cushman & Wakefi eld, DTZ, JLL, MacKenzie, and Newmark Grubb Knight Frank* Downtown Baltimore Vacancy 2013 Sources: Cassidy Turley, CBRE, Cushman & Wakefi eld, MacKenzie, Newmark Grubb Knight Frank, and Transwestern* Downtown Baltimore Vacancy 2014 Sources: CBRE, Cushman & Wakefi eld, DTZ, JLL, MacKenzie, Newmark Grubb Knight Frank, and Transwestern

* Downtown Baltimore, Baltimore City, and Baltimore Metro Vacancy Sources: CBRE, Cushman & Wakefi eld, DTZ, JLL, MacKenzie, Newmark Grubb Knight Frank, and Transwestern* National Vacancy Sources: CBRE, Cushman & Wakefi eld, DTZ, JLL, and Newmark Grubb Knight Frank

16.83% Downtown Baltimore

14.97% Baltimore City

13.92% Baltimore Metro

* Downtown Baltimore, Baltimore City, and Baltimore Metro Vacancy Sources:

14.56% National

5% 10% 15% 20%

2014 VACANCY: NATIONAL & REGIONAL STANDINGS

3

There was a good deal of commercial activity in 2014 as international investors

capitalized on Downtown’s growing market value, particularly in Charles Center where

almost twenty major new projects were underway and companies such as Cigna and

KAO announced they would be moving into Downtown and signed leases totaling

more than 35,000 square feet. Three offi ce towers sold for strong prices and multiple

additional properties were listed by year’s end.

Pratt Street offi ce occupancy rates remained in the high 90th percentile last year in 2014,

led by companies like R2Integrated (15,400 square-foot expansion) and Shapiro Sher

Guinot & Sandler (new 15,000 square-foot lease). Last year also marked a signifi cant

turn-around for Downtown in terms of attracting large companies from suburban

Maryland. Pandora, KAO, and MAIF were among the fi rms that departed locations in

adjacent counties and relocated into Downtown to take advantage of its

diverse and growing pool of worker talent.

Downtown-wide, some commercial brokerage

analyses saw vacancy rates rise modestly, while

others observed a decrease. Averaging these out,

the vacancy rate was up very slightly to 16.8% in

2014 versus 16.1% in 2013, with Class A lease rates

remaining unchanged at $22-$27 per square foot.

OFFICE SPACE01.

After adding 10,000 jobs in 2012 and more than 9,000 jobs in 2013, Downtown employment

increased by approximately 1,600 jobs in 2014. With a total of nearly 124,000 jobs, Baltimore

maintained its rank as the 12th largest downtown employment center among the top 25

largest metro areas in the U.S.

EMPLOYMENT BY INDUSTRY SECTOR: PERCENT OF TOTAL EMPLOYEES

Public Administration

Accommodation & Food Services

5% 10% 15% 20%

* The “Other” category consists of the following sectors: Agriculture, Utilities, Manufacturing, Wholesale Trade, Transportation and Warehousing, Real Estate, Management of Companies, Administrative, Other Services, and Arts Entertainment and Recreation. Each of these categories consisted of less than 5% of total employment* Source: Claritas

19% Healthcare & Social Assistance

Public AdministrationPublic Administration

14% Professional, Scientifi c & Technical Services

12%

11%Finance & Insurance

Information

8%

6%Construction

Educational Services

4%

4%Retail Trade

* The “Other” category consists of the following sectors: Agriculture, Utilities, Manufacturing,

Other*

4%

19%

02. EMPLOYMENT

OFFICE SPACE

4

Downtown’s overall apartment occupancy rate was a strong 94%.

A lack of available new units constrained supply, capping 2014 net

population growth to just 635 people despite continued strong

demand. Three large new buildings hit the market – 301 N. Charles

(96 units), 520 Park Avenue (171 units), and The Lenore

(102 units). Each has been leasing up ahead of schedule.

Downtown’s overall population rose to just over 41,000. Despite

the increase, Downtown’s national rank for population dropped

one spot to 9th, as Washington, DC rose to number 8 with

44,000 residents.

The rate of Downtown’s population increase is expected to rise more quickly as the pace

of residential delivery speeds up. Almost 5,100 units are in the pipeline through 2017.

Major properties expected to hit the market in 2015 include 10 N. Calvert (188 units),

10 Light Street (420 units), and 26 S. Calvert (167 units).

NOTABLE RESIDENTIAL OPENINGS

Project Name Address Project Type Housing Type # of Units

The Lenore 114 E. Lexington Street Conversion Rental — Market Rate 102

301 North Charles 301 N. Charles Street Conversion & New Construction Rental — Market Rate 96

520 Park 520 Park Avenue Conversion Rental — Market Rate & Affordable Housing 171

CLASS A APARTMENT BUILDING RENTAL RATES

Apartment Size Average Price per S.F.

Studio $2.68

1 Bedroom $2.21

2 Bedroom $2.04

3 Bedroom $2.29

All unit types $2.20

* Includes 13 buildings within the one-mile radius defi ned by the following criteria: built after 1995; 100 units or greater; building amenities and quality fi nishes in units

FOR SALE HOUSING MARKET SUMMARY

Housing Type Properties Sold Average Sale Price Median Sale Price

Condo 101 $374,131 $280,000

Townhome 312 $298,931 $276,250

*Source: MRIS OF THE APARTMENTS

93.7%AT THE END OF 2014

THAT ARE AVAILABLE IN

BALTIMORE WERE RENTED

DOWNTOWN

03. HOUSING

Downtown’s overall apartment occupancy rate was a strong 94%.

A lack of available new units constrained supply, capping 2014 net

population growth to just 635 people despite continued strong

demand. Three large new buildings hit the market – 301 N. Charles

(96 units), 520 Park Avenue (171 units), and The Lenore

(102 units). Each has been leasing up ahead of schedule.

The rate of Downtown’s population increase is expected to rise more quickly as the pace

5

93.7%THAT ARE AVAILABLE IN

DOWNTOWN

SetonHill

HeritageCrossing

Otterbein

CamdenYards

Ridgely’sDelight/

Stadiums

FederalHillSharp-

Leadenhall

HarborPoint

HarborEast

LittleItaly

HistoricJonestown

Old Town

JohnstonSquare

StationNorth

BoltonHill

StateCenter

MountVernon

UMB

Bromo

CathedralHill

PrestonGardens

CityHall

InnerHarbor

CharlesCenter

SouthBaltimore

LocustPoint

University of MarylandMedical Center Midtown

VA Hospitalof Maryland

Universityof Maryland

Medical Center

MercyMedicalCenter

KennedyKriegerInstitute

Residential properties in the pipeline through 2017


RoyalFarmsArena

Poppleton

HollinsMarket

Pigtown/Washington

Village

Fells Point

WashingtonHill

Westport

UMB Biopark

JohnsHopkinsHospital

Science + TechnologyPark at Johns Hopkins

2014 DOWNTOWN HOUSING PIPELINEResidential projects that were under development at the end of 2014.

7

IN 2014 THERE WERE

492 HOTELROOMS

UNDER CONSTRUCTION

149 MORE ROOMS IN

P L A N N I N G

HOTEL PERFORMANCE

$200

$150

$100

$50

0

100%

75%

50%

25%

DOWNTOWN BALTIMORE METRO NATIONAL

*Source: Smith Travel Research

OC

CU

PAN

CY AD

R

REV

PA

R

DOWNTOWN BALTIMORE METRO NA

69.0

%


REV

PA

RR

EV P

AR

REV

PA

R


$165

.99

DOWNTOWN BALTIMORE METRO NADOWNTOWN BALTIMORE METRO NA

$114

.60

OC

CU

PAN

CY

AD

R

REV

PA

R


65.6

%


REV

PA

RR

EV P

AR


$121

.36

DOWNTOWN BALTIMORE METRO NADOWNTOWN BALTIMORE METRO NA

$79.

56

OC

CU

PAN

CY

AD

R

REV

PA

R$7

4.28

DOWNTOWN BALTIMORE METRO NATIONAL

64.4

%

TIONAL

REV

PA

RR

EV P

AR

TIONAL

$74.

28

TIONAL

$115

.32

NOTABLE HOTEL OPENINGS

Project Name Address Project Type No. of Rooms

Hyatt Place – Baltimore / Inner Harbor 511 S.Central Ave. Conversion/Renovation 208

The Star Spangled Spectacular and strong convention attendance improved hotel

performance across indices, with an impressive average occupancy rate of 69% –

nearly back to pre-recession levels. Once again, Downtown hotels outperformed the

region and the nation in terms of occupancy, average daily room rates, and revenue

earned per room.

HOSPITALITY & HOTELS04.

8

More than 90 restaurants and retailers opened, or signed leases, in 2014. With employment and residential

densities that rank among the top 20 downtowns nationally, the most transit options within the region, and

an average household income of $71,600, Downtown Baltimore is an increasingly strong retail location that

should become stronger as new residents drive demand, national retailers look more aggressively for urban

space, and offi ce and apartment developments continue to add ground-fl oor retail space.

05. RETAIL

HOSPITALITY & HOTELS

Photo by Mark Dennis

NOTABLE RETAIL OPENINGS AND LEASES

Name Address Business Type Status*

AGGIO 614 Water St. Restaurant Open

Blue Moon Café 1024 Light St. Restaurant Coming Soon

Chick-fi l-A 400 E. Pratt St. Restaurant Coming Soon

Chicken Rico 55 Market Pl. Restaurant Open

Dinosaur Bar-B-Que 1401 Fleet St. Restaurant Coming Soon

Encantada 800 Key Hwy. Restaurant Coming Soon

Family Meal 621 E. Pratt St. Restaurant Open

Floyd’s 99 Barbershop 511 S. Central Ave. Retail Coming Soon

LUSH Fresh Handmade Cosmetics 1001 Aliceanna St. Retail OpenMadewell 811 Aliceanna St. Retail OpenMaiwand Grill 324 W. Baltimore St. Restaurant OpenNalley Fresh 400 E. Pratt St. Restaurant Coming SoonShake Shack 400 E. Pratt St. Restaurant Open

* Family Meal, Madewell, and Shake Shack opened in Winter 2015

RETAIL VACANCY RATES

2% 4% 6% 8% 10%

*Includes Lockwood Place, Harborplace, The Gallery, and Harbor East

7.1% National

5.0% Baltimore Metro

*Includes Lockwood Place, Harborplace, The Gallery, and Harbor East

10.2% Downtown* – Multi-tenant Projects

*Source: Claritas

THE TOTAL AMOUNT OF 2014 RETAIL SALES IN

DOWNTOWN BALTIMORE WAS

1.58 BILLIOND O L L A R S

9

WELCOME BACK CHARLES CENTER

2014 COMPLETED

1. Chesapeake Shakespeare Company 7 S. Calvert Street Conversion to 260-seat theater. Developer: Chesapeake Shakespeare Company

2. 25 S. Calvert Street Landscaping and fencing of vacant lot. Developer: Downtown Partnership of Baltimore

3. Water & Light Apartments 25 Light Street & 104 Water Street Conversion to 14-unit market rate apartments. First fl oor retail retained.

Developer: Republic Investment Company

4. Lord Baltimore Hotel 20 W. Baltimore Street Renovation of former Radisson hotel.

Developer: Rubell Hotels

5. The Lenore 114 E. Lexington Street Conversion to 102-unit market rate apartments and fi rst fl oor retail.

Developer: Baybridge Properties

6. 301 N. Charles Street Conversion to 97-unit market rate apartments.

Developer: PMC Property Group

7. McDonald’s Facade Improvement101 E. Baltimore Street

Restoration of historic building. Developer: McDonalds Corporation

IN PROGRESS8. Crowne Plaza Hotel 1 E. Redwood Street Conversion to 150-key Crowne Plaza Hotel and fi rst fl oor retail. Q3 2015 delivery. Developer: Tran Group

9. 10 Light Street Conversion to 420-unit market rate apartments and 25,000 SF retail. Q2 2015 delivery. Developer: Metropolitan Baltimore

10. Mechanic Centre 1 W. Baltimore Street Mixed-use, 306-unit market rate apartments; 110,000 SF retail; 404 parking spaces. 2016 delivery. Developer: David S. Brown Enterprises, Ltd.

11. Wilkes Lane Landscaping, pedestrian lighting, Wi-Fi, and outdoor dining area. Developer: Downtown Partnership of Baltimore

& adjacent owners

12. Calvert & Water Apartments 26-36 S. Calvert Street & 31 S. Grant Street Conversion to 189-unit market rate apartments and fi rst fl oor retail. Q2 2015 delivery.

Developer: PMC Property Group

13. Equitable Building10 N. Calvert Street

Conversion to 188-unit market rate apartments & fi rst fl oor retail. Q2 2015 delivery.

Developer: JK Equities

14. The Munsey Apartments7 N. Calvert Street

Elevator, lobby and unit renovations of market rate apartments. Ongoing.

Developer: Village Green

PLANNING

15. Hotel RL Baltimore 207 E. Redwood Street Conversion to 130-key hotel. Q3 2015 delivery.

Developer: Red Lion Hotels

16. Courthouse Plaza 100 block of St. Paul Street Renovation and beautifi cation. Q4 2015 delivery.

Developer: Downtown Partnership of Baltimore

& City of Baltimore

17. Preston Gardens St. Paul Street Reconfi guation, stabilization and beautifi cation project. 2016 delivery.

Developer: Downtown Partnership of Baltimore,

City of Baltimore & State of Maryland

18. Liberty Park 144 W. Fayette Street New construction, 92 mixed-income apartments. 2016 delivery.

Developer: New Urban Equities

19. Central Savings Bank 1 E. Lexington Street Conversion to 26-unit market rate apartments and 9,000 SF retail. 2016 delivery.

Developer: Poverni Sheikh

20. 225 N. Calvert Street Conversion to 350-unit market rate apartments. 2016 delivery.

Developer: Monument Realty

21. One Light 5-11 Light Street & 105-115 E. Baltimore Street Mixed-use, 362-unit market rate apartments; 287,000 SF offi ce; 9,000 SF retail; 657 parking spaces. 2017 delivery.

Developer: Metropolitan Baltimore

9

Charles Center is more than Downtown’s historic core. A host of development projects

are adding new residents, theatres, restaurants, and employees.

10

StationNorth

UMB

Westport

SouthBaltimore

LocustPoint

Residential properties in the pipeline through 2017


N. L

iber

ty S

t

Lexington St

Fayette St

Baltimore St

Lombard St

Lexington St

Clay St

Cha

rles

St

St P

aul S

t

Gui

lford

St

Fayette St

Gra

nt S

t Cal

vert

St

Gay

St

Hol

liday

St

Royal FarmsArena

WarMemorial

Wilkes Ln

CenterPlaza

PrestonGardens

Hopkins Plaza

This report is produced by Downtown Partnership of Baltimore, which is solely

responsible for its content. Data is collected by, or on behalf of, Downtown

Partnership from multiple sources and covers activity within a one-mile radius of the

intersection of Pratt and Light streets. Charts, graphs, maps, and images are the

property of The Partnership unless otherwise noted.

Downtown Partnership of Baltimore is a 501(c)(6) non-profi t incorporated in the

State of Maryland. It has approximately 650 member fi rms throughout the mid-

Atlantic region from dozens of industry sectors.

For more information about Downtown Partnership, its reports, or to become a

member, please visit www.GoDowntownBaltimore.com, call us at 410.244.1030,

or email us at [email protected]. You can also fi nd Downtown Partnership of

Baltimore on Facebook and twitter @DowntownBalt.

DESIGNED BY INSIGHT180 BRANDING & DESIGN

PRESENTING SPONSORS:

LEADERSHIP SPONSORS:

PATRON SPONSORS:

FRIEND SPONSORS:

WRH Property Management, LLC

ARCHITECTURE LANDSCAPE ARCHITECTURE INTERIOR DESIGN PLANNING

STATE OF DOWNTOWN DOWNTOWN BALTIMORE REPORT...

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