Downtown Baltimore Report 2014

Home , Charles Center, Downtown Baltimore, Pratt Street

STATE OF DOWNTOWN DOWNTOWN BALTIMORE REPORT 2014

ISSUED MARCH 2015 Station North 2014 ONE-MILE RADIUS TOTALS Employment ...... 123,879 Bolton Residents ...... 41,606 Hill Office Space ...... 28M S.F. Hotel Rooms ...... 8,000

State Center Johnston Square

University of Maryland Mount Medical Center Midtown Vernon Kennedy Heritage Krieger Crossing Institute Johns Hopkins Old Town Hospital Seton Hill Preston Gardens Cathedral Hill Mercy Medical Bromo Center Historic Jonestown Poppleton UMB City VA Hospital Charles Hall of Maryland Center University Royal Fells Point of Maryland Farms Medical Center Arena

Little Inner Italy Harbor Ridgely’s Delight/ Stadiums

Otterbein Harbor East

Pigtown/ Washington Camden Village Yards Harbor Point

Federal Sharp- Hill Leadenhall

Locust Point South Baltimore

Westport

One mile radius from Pratt & Light intersection 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.

TOP 25 LARGEST U.S. METRO AREAS: ONE-MILE RADIUS STATISTICS

AVERAGE HOUSEHOLD HOUSEHOLDS OVER $75,000 POPULATION EMPLOYMENT INCOME ANNUAL INCOME

1 New York 188,496 1 New York $157,807 1 New York 67,566 1 New York 1,193,065 2 San Francisco 119,707 2 Washington, DC $120,671 2 Chicago 31,114 2 Chicago 378,993 3 Chicago 92,316 3 Chicago $119,862 3 San Francisco 21,141 3 Washington, DC 308,639 4 Philadelphia 80,406 4 Boston $115,738 4 Philadelphia 18,243 4 Boston 244,628 5 Los Angeles 77,013 5 Charlotte $97,266 5 Seattle 12,811 5 Philadelphia 231,937 6 Seattle 61,211 6 Houston $93,140 6 Washington, DC 12,790 6 San Francisco 217,366 7 Boston 49,620 7 Philadelphia $91,570 7 Boston 12,685 7 Seattle 211,125 8 Washington, DC 44,120 8 Tampa $86,941 8 Denver 7,924 8 Houston 199,186 9 Baltimore (8) 41,606 9 Dallas $82,168 9 San Diego 7,892 9 Los Angeles 149,091 10 San Diego 40,486 10 San Diego $76,310 10 Minneapolis 6,566 10 Minneapolis 135,186 11 Denver 38,873 11 San Francisco $74,371 11 Miami 6,321 11 Denver 133,089 12 Miami 36,819 12 Miami $73,258 12 Los Angeles 5,916 12 Baltimore (12) 123,879 13 Minneapolis 34,856 13 Minneapolis $71,870 13 Baltimore (12) 5,854 13 Dallas 121,460 14 Houston 24,144 14 Seattle $71,793 14 Dallas 4,111 14 Pittsburgh 110,539 15 Portland 22,787 15 Baltimore (14) $71,625 15 Portland 3,708 15 Atlanta 99,413 16 Atlanta 20,163 16 Portland $71,298 16 Charlotte 3,215 16 Charlotte 81,047 17 Pittsburgh 18,145 17 Denver $68,751 17 Houston 2,977 17 San Diego 78,773 18 Orlando 17,986 18 Pittsburgh $63,177 18 Orlando 2,614 18 San Antonio 77,621 19 Dallas 16,488 19 Orlando $58,120 19 Tampa 2,413 19 Detroit 65,011 20 Charlotte 16,202 20 San Antonio $56,639 20 Atlanta 1,726 20 Miami 59,944 21 Phoenix 15,313 21 Atlanta $56,269 21 Pittsburgh 1,655 21 Phoenix 58,689 22 St. Louis 12,231 22 St. Louis $54,089 22 St. Louis 1,597 22 Orlando 56,752 23 Tampa 10,627 23 Los Angeles $44,781 23 Phoenix 817 23 St. Louis 55,235 24 San Antonio 9,061 24 Detroit $44,407 24 San Antonio 736 24 Tampa 43,145 25 Detroit 6,881 25 Phoenix $37,922 25 Detroit 706 25 Portland 38,896

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

2 01. OFFICE SPACE

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.

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 VACANCY: NATIONAL & REGIONAL STANDINGS 2014 OFFICE MARKET STATISTICS

5% 10% 15% 20% Year End 2013 Year End 2014 Vacancy 16.1% 16.8% 16.83% Downtown Baltimore Rents – Class A $22-$27 $22-$27 14.97% Baltimore City Rents – Class B $16-$19 $16-$20 Baltimore Metro 13.92% * Class A/B Rent Sources 2013: Cassidy Turley, CBRE, Cushman & Wakefi eld, and Newmark Grubb Knight Frank 14.56% National * 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, * Downtown Baltimore, Baltimore City, and Baltimore Metro Vacancy Sources: MacKenzie, Newmark Grubb Knight Frank, and Transwestern CBRE, Cushman & Wakefi eld, DTZ, JLL, MacKenzie, Newmark Grubb Knight Frank, * Downtown Baltimore Vacancy 2014 Sources: CBRE, Cushman & Wakefi eld, DTZ, JLL, and Transwestern MacKenzie, Newmark Grubb Knight Frank, and Transwestern * National Vacancy Sources: CBRE, Cushman & Wakefi eld, DTZ, JLL, and Newmark Grubb Knight Frank

3 02. EMPLOYMENT

OFFICE SPACE 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

5% 10% 15% 20%

19% Healthcare & Social Assistance 14% Professional, Scientiﬁ c & Technical Services 12% Public Administration 11% Accommodation & Food Services 8% Finance & Insurance 6% Information 4% Construction 4% Educational Services 4% Retail Trade 19% Other*

* 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

4 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.

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

FOR SALE HOUSING MARKET SUMMARY AT THE END OF 2014 Housing Type Properties Sold Average Sale Price Median Sale Price Condo 101 $374,131 $280,000 Townhome 312 $298,931 $276,250 93.7% *Source: MRIS OF THE APARTMENTS THAT ARE AVAILABLE IN CLASS A APARTMENT BUILDING RENTAL RATES DOWNTOWN Apartment Size Average Price per S.F. BALTIMORE WERE RENTED 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

5 2014 DOWNTOWN HOUSING PIPELINE Residential projects that were under development at the end of 2014.

Station North

Bolton Hill

State Center Johnston Square

Science + Technology Park at Johns Hopkins University of Maryland Mount Medical Center Midtown Vernon Kennedy Heritage Krieger Crossing Institute Johns Hopkins Old Town Hospital Seton Hill Preston Gardens Cathedral Hill Mercy Poppleton Medical Bromo Center Historic UMB Jonestown City Washington Hill VA Hospital Charles Hall UMB Biopark of Maryland Center University Royal of Maryland Farms Hollins Arena Market Medical Center

Little Inner Italy Harbor Ridgely’s Delight/ Stadiums Fells Point Pigtown/ Otterbein Harbor Washington East Village

Camden Yards 93.7% Harbor Point

Federal THAT ARE AVAILABLE IN Sharp- Hill Leadenhall DOWNTOWN

Locust Point South Baltimore

Westport

Residential properties in the pipeline through 2017 One mile radius from Pratt & Light intersection 04. HOSPITALITY & HOTELS

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.

NOTABLE HOTEL OPENINGS IN 2014 THERE WERE Project Name Address Project Type No. of Rooms Hyatt Place – Baltimore / Inner Harbor 511 S.Central Ave. Conversion/Renovation 208 HOTEL 492 ROOMS UNDER CONSTRUCTION HOTEL PERFORMANCE

$200

100% ADR $150 149 ADR ADR

75% OCCUPANCY REV PAR REV PAR OCCUPANCY

OCCUPANCY MORE ROOMS IN $100 REV PAR REV PAR REV PAR REV PAR PLANNING 50%

$50

25% 69.0% $165.99 $114.60 65.6% $121.36 $79.56 64.4% $115.32 $74.28 0 DOWNTOWN BALTIMORE METRO NATIONAL

*Source: Smith Travel Research

7 05. RETAIL

HOSPITALITY & HOTELS

Photo by Mark Dennis

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.

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 Open Madewell 811 Aliceanna St. Retail Open Maiwand Grill 324 W. Baltimore St. Restaurant Open Nalley Fresh 400 E. Pratt St. Restaurant Coming Soon Shake 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% THE TOTAL AMOUNT OF 2014 RETAIL SALES IN DOWNTOWN BALTIMORE WAS 7.1% National 5.0% Baltimore Metro BILLION 1. 5 8 DOLLARS 10.2% Downtown* – Multi-tenant Projects

*Includes Lockwood Place, Harborplace, The Gallery, and Harbor East *Source: Claritas

8 WELCOME BACK CHARLES CENTER

Charles Center is more than Downtown’s historic core. A host of development projects are adding new residents, theatres, restaurants, and employees.

2014 COMPLETED 12. Calvert & Water Apartments 26-36 S. Calvert Street & 31 S. Grant Street 1. Chesapeake Shakespeare Company Conversion to 189-unit market rate 7 S. Calvert Street apartments and fi rst fl oor retail. Conversion to 260-seat theater. Q2 2015 delivery. Developer: Chesapeake Shakespeare Company Developer: PMC Property Group 2. 25 S. Calvert Street 13. Equitable Building Landscaping and fencing of vacant lot. 10 N. Calvert Street Developer: Downtown Partnership of Baltimore Conversion to 188-unit market rate 3. Water & Light Apartments apartments & fi rst fl oor retail. 25 Light Street & 104 Water Street Q2 2015 delivery. Conversion to 14-unit market rate Developer: JK Equities apartments. First fl oor retail retained. 14. The Munsey Apartments Developer: Republic Investment Company 7 N. Calvert Street 4. Lord Baltimore Hotel Elevator, lobby and unit renovations of 20 W. Baltimore Street market rate apartments. Ongoing. Renovation of former Radisson hotel. Developer: Village Green Developer: Rubell Hotels 5. The Lenore PLANNING 114 E. Lexington Street 15. Hotel RL Baltimore Conversion to 102-unit market rate 207 E. Redwood Street apartments and fi rst fl oor retail. Conversion to 130-key hotel. Q3 2015 delivery. Developer: Baybridge Properties Developer: Red Lion Hotels 6. 301 N. Charles Street 16. Courthouse Plaza Conversion to 97-unit market rate 100 block of St. Paul Street apartments. Renovation and beautifi cation. Developer: PMC Property Group Q4 2015 delivery. 7. McDonald’s Facade Improvement Developer: Downtown Partnership of Baltimore 101 E. Baltimore Street & City of Baltimore Restoration of historic building. 17. Preston Gardens Developer: McDonalds Corporation St. Paul Street Reconfi guation, stabilization and IN PROGRESS beautifi cation project. 2016 delivery. 8. Crowne Plaza Hotel Developer: Downtown Partnership of Baltimore, 1 E. Redwood Street City of Baltimore & State of Maryland Conversion to 150-key Crowne Plaza 18. Liberty Park Hotel and fi rst fl oor retail. Q3 2015 delivery. 144 W. Fayette Street Developer: Tran Group New construction, 92 mixed-income 9. 10 Light Street apartments. 2016 delivery. Conversion to 420-unit market rate Developer: New Urban Equities apartments and 25,000 SF retail. 19. Central Savings Bank Q2 2015 delivery. 1 E. Lexington Street Developer: Metropolitan Baltimore Conversion to 26-unit market rate apartments 10. Mechanic Centre and 9,000 SF retail. 2016 delivery. 1 W. Baltimore Street Developer: Poverni Sheikh Mixed-use, 306-unit market rate apartments; 20. 225 N. Calvert Street 110,000 SF retail; 404 parking spaces. Conversion to 350-unit market rate 2016 delivery. apartments. 2016 delivery. Developer: David S. Brown Enterprises, Ltd. Developer: Monument Realty 11. Wilkes Lane 21. One Light Landscaping, pedestrian lighting, Wi-Fi, 5-11 Light Street & 105-115 E. Baltimore Street and outdoor dining area. Mixed-use, 362-unit market rate apartments; Developer: Downtown Partnership of Baltimore 287,000 SF offi ce; 9,000 SF retail; 657 & adjacent owners parking spaces. 2017 delivery. Developer: Metropolitan Baltimore

9 Station North

Clay St

Lexington St UMB Preston

St Paul St St Paul Gardens

N. Liberty St Lexington St

Center Charles St War Fayette St Plaza Memorial Fayette St Wilkes Ln Baltimore St St Guilford

Hopkins Plaza St Calvert St Holliday St Gay

Royal Farms Arena

Lombard St St Grant

Locust Point South Baltimore

Westport

Residential properties in the pipeline through 2017 One mile radius from Pratt & Light intersection PRESENTING SPONSORS:

LEADERSHIP SPONSORS:

PATRON SPONSORS:

ARCHITECTURE LANDSCAPE ARCHITECTURE INTERIOR DESIGN PLANNING

FRIEND SPONSORS:

WRH Property Management, LLC

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.