The recent sale of the 21-story Mercantile Bank and Trust Building and the16-story W.R. Grace Building to USA Realty Fund for $78.9 million reinforces that despite national market declines, downtown Baltimore real estate is still a hot market for investors.
“I think, pure and simple, the value [of Baltimore real estate] has risen, and the fact that buyers are willing to come into the market is definitely a promising trend,” said Robert Aydukovic, vice president for economic development for the Downtown Partnership, a nonprofit business group. “It shows that institutions and publicly traded money are discovering non-Pratt Street office buildings, and for well-tenanted office buildings, they are going to trade well.”
Aydukovic said Baltimore City has not seen institutional buyers for a long time, but they are beginning to recognize the tremendous value of many of the older buildings in the city.
Continued interest in existing downtown real estate seems to be improving the prospects for the state?s World Trade Center. Since announcing that the 31-story, 330,000- square-foot office tower would be retained in the Maryland Department of Transportation?s real estate portfolio, inquiries into the site have increased.
“The World Trade Center is more than 50 percent leased and interest in the site is high,” said MDOT spokesman Richard Scher. “Since Secretary [John] Porcari made the announcement back in February, we have signed several new tenants and are in negotiations with other prospects.”
Scher said a real estate group signed a three-year lease and a venture capital company a one-year lease.
“We are in the midst of a full-scale effort to reinvest in and aggressively marketing the building. Real estate professionals within MDOT, working in conjunction with our consultant, ZHA Consulting, are making recommendations on improvements and developing a strategic marketing campaign,” Scher said.
Scher says MDOT plans to emerge with a sound blueprint to keep themomentum going. This is good news to Baltimore City officials.
“The best validation of the city?s long-term prospects comes from the marketplace,” said Andrew Frank, Baltimore City deputy mayor for neighborhood and economic development. “And the market is telling us that the office market is strong and is likely to remain so.”
Staff writer Dave Carey contributed to this story.
