There is a moderate level of demand for Class A office space in Baltimore now, he tells GlobeSt.com, which has traditionally been limited to perhaps six or so buildings, most of which are located on Pratt St. Demand is increasing, albeit slowly, for various reasons: vacancies in the Baltimore office market in general are decreasing—according to Delta Associates they are expected to decline to 10.9% from 11.7% over the next two years.
Also, there is little other Class A product in the pipeline, Wells adds. "Demand for Class A is primarily coming from tenants in other buildings that are taking the opportunity to cycle out of older buildings and upgrade to Class A." From his vantage point, most of this growth has been organic—that is, Baltimore firms expanding operations—as opposed to out of town tenants setting up shop in the city.
Activity in the Washington, DC, market, though, is having some impact on Baltimore's real estate. More government contractors are moving in; also Maryland is one of the submarkets expected to benefit from the Base Realignment and Closure (BRAC) initiative.
Not all of these companies will demand Class A buildings, however. 100 East Pratt is particularly unique, Wells says, because of its terrace that looks directly out onto the water. "We predominately compete with two or three buildings in the city."
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
