2017 State of Downtown Baltimore Report

2017 STATE OF DOWNTOWN BALTIMORE REPORT

ISSUED APRIL 2018 Station North

Upton

Bolton Hill

State Center Johnston Square

Science + Technology Park at Johns Hopkins University of Maryland Medical Center Midtown Mount Kennedy Heritage Vernon Krieger Crossing Institute Johns Hopkins Old Town Hospital Seton Hill Preston Gardens Mercy Medical University Bromo Arts District Center Upper of Maryland, Fells Baltimore Charles Center VA Hospital UMB Bio Park of Maryland Historic University Jonestown of Maryland Royal Farms Arena Medical Center

Little Inner Italy Harbor Ridgely’s Delight/ Fells Stadiums Point

Otterbein Harbor East Pigtown/ Washington Village

Harbor Point

Federal Sharp- Hill Leadenhall Cross Street Market

Horseshoe Casino

South Locust Baltimore Point

ONE-MILE RADIUS MAP Westport Employment: 119,312 Residents: 42,626 Port Office Space: 28.2 M S.F. Covington Hotel Rooms: 8,875 executive summary

WORK/LIFE BALANCE

Downtown Baltimore excels at striking a work/life balance, which is why it’s so good at attracting top talent. Pick any of our largest industry sectors— healthcare, ﬁnance, hospitality, technology, for example — and the trend of relocations to, and expansions in, Downtown Baltimore is undeniable. They’re here because the best and brightest employees want to work someplace cool.

They also know that work is not rewarding without a balance. Atop Downtown highrises, corporate names like M&T Bank, Transamerica, and Pandora now share the sky with expansive rooftop lounges, pools, and restaurants as apartment towers make Downtown the most densely packed residential neighborhood in the region. Back on the ground, the dining scene is exploding with restaurants using the bounty of our nearby farms and Chesapeake Bay, solidifying Baltimore’s place on the world’s culinary map. And though, at times, the restaurants seem to be coming and going, this is consistent with national trends. Our parks and plazas are ﬁlled with events from Spring to Fall. The Sandlot, the outdoor lounge in Harbor Point, offers a new way to watch the ships come in. And, the recent addition of bike lanes and an upgraded water taxi system offer even more pleasant ways to get to work without a car.

Though the data in this report is a crucial indicator of our city’s health, so is belief. The people who live and work in Downtown Baltimore believe in Downtown Baltimore. Our residents and employees genuinely like being here, and take great pride in their city. And it is this base that drives the economy for the entire city.

Top 25 Largest U.S. Metro Areas: One-Mile Radius Statistics

Population Average Households Employment Household Income over $75,000

1 New York 190,901 1 New York $183,086 1 New York 75,494 1 New York 1,078,486 2 San Francisco 127,962 2 Chicago $153,396 2 Chicago 38,798 2 Chicago 360,413 3 Chicago 95,635 3 Boston $142,154 3 San Francisco 30,735 3 Washington 323,810 4 Philadelphia 84,027 4 Washington $134,949 4 Philadelphia 25,551 4 Boston 298,683 5 Los Angeles 75,127 5 Houston $118,836 5 Seattle 22,016 5 Philadelphia 263,865 6 Seattle 69,874 6 Charlotte $118,566 6 Boston 16,441 6 Seattle 222,892 7 Boston 53,129 7 Philadelphia $117,6 49 7 Washington 15,917 7 Houston 190,854 8 Washington 47,856 8 Dallas $116,521 8 Denver 11,708 8 Los Angeles 178,156 9 San Diego 43,874 9 San Francisco $109,236 9 San Diego 10,796 9 Minneapolis 169,499 10 Denver 42,730 10 Seattle $105,947 10 Los Angeles 10,113 10 San Francisco 166,586 11 Baltimore (10) 42,626 11 Tampa $104,663 11 Miami 9,175 11 Denver 140,356 12 Miami 38,651 12 San Diego $100,121 12 Minneapolis 8,496 12 Atlanta 128,863 13 Minneapolis 37,133 13 Miami $99,773 13 Baltimore (13) 7,677 13 Pittsburgh 123,088 14 Houston 27,775 14 Baltimore (16) $91,706 14 Dallas 6,562 14 Baltimore (14) 119,312 15 Portland 25,198 15 Portland $90,710 15 Portland 5,536 15 Dallas 107,096 16 Atlanta 22,681 16 Minneapolis $90,333 16 Charlotte 4,816 16 Charlotte 83,804 17 Orlando 19,687 17 Denver $89,179 17 Orlando 4,086 17 Detroit 76,741 18 Charlotte 19,119 18 Orlando $83,155 18 Houston 4,056 18 Miami 76,179 19 Dallas 18,664 19 Pittsburgh $81,950 19 Tampa 3,021 19 San Antonio 76,125 20 Pittsburgh 18,537 20 San Antonio $71,345 20 Atlanta 2,295 20 San Diego 74,753 21 Phoenix 16,099 21 Atlanta $71,312 21 Pittsburgh 2,293 21 Orlando 73,760 22 St. Louis 12,162 22 St. Louis $68,187 22 St. Louis 2,050 22 St. Louis 66,690 23 Tampa 11,332 23 Detroit $65,943 23 San Antonio 1,361 23 Phoenix 61,925 24 San Antonio 9,646 24 Los Angeles $64,524 24 Phoenix 1,161 24 Tampa 44,196 25 Detroit 6,855 25 Phoenix $53,688 25 Detroit 1,126 25 Portland 41,373

Environics Analytics through Spotlight ( ) = last year’s ranking

1 housing

WELCOME, NEIGHBORS As developments like One Light (featured on our cover) and 414 Light Street race skyward, forever altering the Downtown skyline, many people have asked—“Can we sustain this?”

The answer is yes. In 2017, the occupancy rate rose to 93% as large-scale projects like 500 Park, 2 Hopkins Plaza, and Stadium 2 Hopkins Plaza Square came online. And, according to our Housing Demand Study: Outlook 2022, released in 2017 (which is outlined on page 4) Downtown is in a position to absorb nearly 7,000 new units over the next ﬁve years, including the two new Light Street towers and 225 N. Calvert, already in the pipeline.

Along with an improving occupancy rate, 2017 brought a healthy mix of conversion and ground-up development. Properties like 2 Hopkins Plaza and The Appraisers’ Building came online as stellar examples of converting ofﬁce space to modern, stylish residences. Stadium Square and 500 Park completed construction and offer impressive amenities like private courtyards, pools, and ﬁtness centers.

414 Light Street GoDowntownBaltimore.com

2 Notable Residential Openings

Project Name Address Project Type Housing Type # of Units

Stadium Square/ 101 W. Cross Street New Construction Rental - Market Rate 299 Hanover Cross Street 2 Hopkins Plaza 2 Hopkins Plaza Conversion Rental - Market Rate 182 The Appraisers’ Building 103 S. Gay Street Conversion Rental - Market Rate 137 Banner Hill 611 S. Charles Street New Construction Rental - Market Rate 349 300 St. Paul 300 St. Paul Conversion Rental - Market Rate 280 500 Park 500 Park Avenue New Construction Rental - Market Rate 153

Source: Downtown Partnership and Individual Developers

For-Sale Housing Market Summary

Housing Type Properties Sold Average Sale Price Median Sale Price

Condo 114 $514,619 $281,250 Townhome 248 $373,878 $314,250 Stadium Square

Class A Apartment Building Rental Rates Housing Occupancy Rates

Apartment Size Average Monthly Rent

Studio $1,285.35 1 Bedroom $1,511.62 YEAR END % 2017 2 Bedroom $2,028.85 93 3 Bedroom $3,150.83 All unit types $1,994.16

*Includes 23 buildings within the one mile radius deﬁned by the following Source: Individual property managers and leasing agents. criteria: built after 1995; 100 units or greater; high-quality building amenities, and ﬁnishes in units.

“My work has taken me to cities all over, but no place I’ve visited has hit me like this one. I had no idea what I’d been missing. This city has its problems, don’t get me wrong. But in three days I didn’t meet a rude person, or see a dirty street, or talk to a single Baltimorean who wasn’t proud to live there.”

—Jay Heinrichs, Southwest: The Magazine, February 2018.

225 N. Calvert Street

3 housing

HOUSING DEMAND STUDY

Since 2001, Downtown Partnership has conducted a housing study every five years. The latest, released in 2017, shows that demand for both rental and for-sale housing in Downtown neighborhoods continues to be strong with the ability to absorb up to 7,000 new units in the coming five years. Our key findings are listed below.

Based on a 20 percent capture of the annual More than 53 percent of these potential potential market for new rental housing households currently live outside the units, and a 7.5 to 10 percent capture of Baltimore City limits, up from 51 percent the annual potential market for new for-sale in 2012. housing units, the Downtown Study Area should be able to support up to 1,339 new More than 69 percent of the potential market-rate housing units per year over the market consists of younger singles and short term (next two-to-three years) and up couples, 20.5 percent are empty nesters to 1,405 units per year over the longer term and retirees, and 10.3 percent are (three-to-five years), for a total of between traditional and non-traditional families. 6,685 and 7,025 new rental and for-sale This reflects the increasing number of units over the next five years. young people who are moving to the Downtown Study Area. On average, the study predicts 8,335 households of potential renters As derived from the aggregated housing and buyers of new multi-family and preferences of the target households, single-family attached residential units in 68.5 percent of the new units should be the Downtown Baltimore Study Area each rental apartments, 15.4 percent should year over the next five years, an increase be condominiums (for-sale apartments), of 350 households per year (a growth and 16.1 percent for-sale townhouses, rate of 4.4 percent per year). continuing the trend toward rental in the Downtown Study Area.

GoDowntownBaltimore.com

4 hospitality & hotels

HOSPITALITY & HOTELS

Multiple hotels came online in 2017, including La Quinta, Marriot Delta, and Staybridge Suites, bringing the total current inventory to 8,875. Visitation numbers rose slightly, and Downtown’s hotel performance continued to outrank the national average by nearly 2%.

Hotel Performance Hotel Pipeline

Occupancy ADR RevPAR

Downtown (2017) 67.30 % $160.69 $108.21 CURRENT TOTAL National (2017) 65.90% $126.72 $83.57 INVENTORY 8,875 Source: Smith Travel Research, Inc. / STR Global, Ltd. trading as “STR”

Visitation Numbers UNDER CONSTRUCTION 2017 488 Year End Year End 2016 2015

Total Number of Overnight Visitors 10.6 million 10.4 million Total Number of Visitors 25.9 million 25.2 million Total Overnight Visitor Spending $4.26 billion $3.94 billion Total Visitor Spending $5.64 billion $5.44 billion PLANNED THROUGH 2023 Source: Longwoods International and Tourism Economics, as provided by Visit Baltimore 718

Notable Hotel Openings

Project Name Address Project Type Number of Rooms

Marriott Delta Hotel 1 E. Redwood Street Conversion 150 La Quinta Hotel 200 W. Saratoga Street Conversion 42 Staybridge Suites 17 Commerce Street Conversion 101

Staybridge Suites

5 retail

DOWNTOWN RETAIL

In 2017, food was the name of the retail game in Downtown The Bygone at the Baltimore. As our city’s culinary star continued to rise, several Four Seasons new restaurants opened, diversifying and elevating our already impressive food scene. Downtown saw several new upscale spots debut, including The Bygone in the Four Seasons, Tagliata, and The Elk Room. Filicori Zecchini and Cilantro also opened, giving an international ﬂair to Downtown employee lunch breaks.

It’s no secret that national retail trends are precarious, and Downtown Baltimore was certainly not immune to these changes in 2017. With the massive popularity of e-commerce, the entire retail world is readjusting. But with a 90.1% occupancy rate and large-scale development projects like the new 50,000-square-foot Whole Foods and Harborplace redesign, we’re optimistic about retail in Downtown.

Elite Secrets Bridal GoDowntownBaltimore.com

6 Echoing the national trend of retail uncertainty, Downtown saw a ﬂurry of restaurant and shop closings. However, multiple high-end dining experiences opened in 2017, solidifying Baltimore’s new image as a food destination. Also of note, total Filicori Zecchini Downtown sales rose to $1.242 billion, up from $1.168 in 2016.

Retail Occupancy Rates Downtown Retail Sales

94.2% 96.2% 90.1% TOTAL DOWNTOWN SALES $ 1.242

National Baltimore Downtown* Metro Multi-tenant Projects BILLION

Source: (National and Baltimore Metro): CoStar, Integra Realty Resources, Marcus and Millichap, Mackenzie Commerical Source: Spotlight, as provided by Baltimore Development Corporation Source (Downtown): CoStar, Individual property owners, managers, and leasing agents

Notable Retail Openings And Leases

Name Address Business Type Status

Tagliata 1012 Fleet Street Restaurant Open Cilantro 30 Light Street Restaurant Open Kabul Grill 55 Market Place Restaurant Open Elite Secrets Bridal Boutique 330 N. Charles Street Retail Open Charm City Cakes 618 S. President Street Bakery Open The Charles 1110 S. Charles Street Restaurant Open The Bygone 200 International Drive Restaurant Open Filicori Zecchini 1 E. Pratt Street Coffee Open Elk Room 1010 Fleet Street Restaurant Open

7 ofﬁce & employment

THE BUSINESS OF DOWNTOWN Downtown contains over one-third of the city’s jobs despite comprising less than four percent of its geographic area. Within that small footprint are 28.2 million square feet of office space housing the 119,312 people employed in Downtown. Given Mercy Medical Center, the University of Maryland, Baltimore, and our proximity to the Johns Hopkins medical campus, it’s no surprise that a quarter of these employees work in the healthcare and social assistance sector. Downtown also welcomed the expansion of Morgan Stanley to 100 South Charles, adding hundreds of new employees to the core. And, according to our Core Tech: The State of Downtown Baltimore Tech & Innovation Report, the rapidly growing technology sector is now responsible for seven percent of the Downtown workforce, with thriving outfits like R2i, Fearless Solutions, Jellyfish, State of Downtown Tech Event, November 2017 Verizon, and Exit10. GoDowntownBaltimore.com

8 MAKING MOVES Downtown Baltimore’s Core Tech & Innovation generates $830 million in annual compensation and $1.8 billion in annual output. Strong showings like this are why Cushman & Wakefield included Baltimore as top #12 in their Jellyfish Baltimore Offices Tech Cities 1.0 report released in 2017.

2017 Occupancy: National and Regional Standing Employment by Industry Sector

Downtown Baltimore Healthcare and 85.35% Social Assistance 25% Baltimore City 87.78% Public Administration 15% Professional, Scientific, Baltimore Metro 87.45% and Technical Services 13% National Accommodation and 86.35% Food Services 9% Downtown Baltimore, Baltimore City, and Baltimore Metro Vacancy Sources: CBRE, Finance and Insurance 8% Cushman & Wakefield, JLL, MacKenzie, Newmark Knight Frank, and Transwestern Information National Vacancy Sources: CBRE, Cushman & Wakefield, JLL, and Newmark Knight Frank 6% Educational Services 5% Other Services (except Public Administration) 4% Other* 17% THE BUSINESS *This category consists of the following sectors: Arts, Entertainment, Recreation, Real Estate, Manufacturing, Utilities, Transportation, Construction, Wholesale trade, and other sectors OF DOWNTOWN comprising less than 3% of total employment.

Notable Lease Transactions

Name Address Type of Lease Business Type Sq. Ft.

Morgan Stanley 100 S. Charles Street New Lease Financial Services 300,000 M&T Bank 1 Light Street Relocation Bank/Financial Services 155,000 Johns Hopkins Center for Communications 700 E. Pratt Street Relocation MedTech 78,718 Vitreon America 1100 Wicomico Street Relocation Biotanical Research 50,000 US Internal Revenue Service 100 S. Charles Street New Lease Government 43,121 PricewaterhouseCoopers 100 E. Pratt Street Relocation Accounting Firm 32,000 Merrill Lynch 100 E. Pratt Street Renewal Financial Services 32,000 Cushman and Wakefield 1 E. Pratt Street Relocation Real Estate/Brokerage Services 21,000 McGuire Woods, LLP 500 E. Pratt Street Relocation Law Firm 21,000 US Department of Housing 100 S. Charles Street Relocation Government 20,000 GoDowntownBaltimore.com and Urban Development

9 Presenting Sponsor

Leadership Sponsors

Community Sponsors

Baltimore Development Corporation

First National Bank

Horseshoe Casino

PMS Parking

225 N. Calvert

Marks Thomas | Moseley Architects

GoDowntownBaltimore.com

For more information about Downtown Partnership, its reports, or to become a member, please visit GoDowntownBaltimore.com, email [email protected], or call us at 410.244.1030. You can also find Downtown Partnership of Baltimore on twitter @DowntownBalt.

Thanks to the Downtown Partnership staff who worked to compile this data and produce the 2017 State of Downtown Report.

This report is produced by Downtown Partnership of Baltimore, Inc., which is solely responsible for its content. Data is collected by, or on behalf of, Downtown Partnership from a variety of 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-profit incorporated in the State of Maryland. It has approximately 650 member firms throughout the mid-Atlantic region from dozens of industry sectors.