Source: CXP Has Buyer for Baltimore's 100 East Pratt

100 East Pratt

BALTIMORE—A source tells GlobeSt.com that Atlanta-based Columbia Property Trust has found a buyer for 100 East Pratt in Baltimore, a 653,000-square-foot office building that it began marketing last September. The buyer, a developer based in New Jersey, is paying $187 million, or $285 per square foot, for the building, according to the source. The last the market heard about this building was in February 2016, when CEO Nelson Mills said during the fourth quarter 2015 earnings call that the REIT was in “active negotiations” with a buyer, as well as with buyers for the 1.3 million-square-foot Key Center Tower Key Tower in Cleveland, and the 961,000-square-foot 80 Park Plaza in Newark, New Jersey. He said the company is projecting a total of $700 million to $800 million of dispositions in 2016, the bulk of which will come from these three sales. “We anticipate that these sales will close within the next couple of months,” he said. As it happened, Columbia Property Trust put these three assets on the market at the same time in September of 2015. At the time, company said that the combined gross proceeds from the transactions — a group that also included Washington’s DC Market Square,  which was under contract at the time — would be approximately $900 million to $1 billion. It was expected that the transactions would close in late 2015 or early 2016.

Market Square

What’s Happening With Market Square Now back to Market Square, the 686,000-square-foot trophy office property located at 701 and 801 Pennsylvania Ave. NW, which Columbia Property Trust acquired in 2011 for $615 million, or $904 per square foot. The 49% stake it sold to Blackstone Property Partners, gave the asset a gross value of $595 million. Columbia Property Trust is completing a $40 million to $50 million renovation that is driving strong tenant traffic, according to Mills. It had lost two tenants, Fulbright & Jaworski and Shearman & Sterling law firms, when their leases expired, leaving about 200,000 square feet of the building vacant. Recently, though, it attracted Ford Motor Credit and CBS Media as new tenants.  It has also renewed Advanced Medical Technology Associates as a tenant. All told, according to Mills, 39% of Shearman & Fulbright’s former space has been leased. Not only that, but he noted that the company is achieving rent roll-ups of 5% to 10% at Market Square. Mills attributes that to “breaking up full floors to achieve accelerated deal velocity, and higher net effective rents.” It has also used its concentration of top government affairs offices  “to create a sense of gravity for similar tenants…” he said. The REIT is bullish on the Washington DC market in the long term despite its current sluggish leasing market, Mills concluded at the end of the earnings call. “We believe DC will eventually make a strong return, and we’re hopeful that, post-election, it will begin to shift back to doing what the city does best, thriving off the demand created by new laws and a new, changing government.”