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
3 San Francisco 21,141
4 Philadelphia 18,243
5 Seattle 12,811
6 Washington, DC 12,790
7 Boston 12,685
8 Denver 7,924
9 San Diego 7,892
10 Minneapolis 6,566
11 Miami 6,321
12 Los Angeles 5,916
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
3 Washington, DC 308,639
4 Boston 244,628
5 Philadelphia 231,937
6 San Francisco 217,366
7 Seattle 211,125
8 Houston 199,186
9 Los Angeles 149,091
10 Minneapolis 135,186
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
One mile radius from Pratt & Light intersection
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
%
DOWNTOWN BALTIMORE METRO NA
REV
PA
RR
EV P
AR
REV
PA
R
DOWNTOWN BALTIMORE METRO NA
$165
.99
DOWNTOWN BALTIMORE METRO NADOWNTOWN BALTIMORE METRO NA
$114
.60
OC
CU
PAN
CY
AD
R
REV
PA
R
DOWNTOWN BALTIMORE METRO NA
65.6
%
DOWNTOWN BALTIMORE METRO NA
REV
PA
RR
EV P
AR
DOWNTOWN BALTIMORE METRO NA
$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
One mile radius from Pratt & Light intersection
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.
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PRESENTING SPONSORS:
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FRIEND SPONSORS:
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