Kornblatt

“Downtown Baltimore is a vibrant market, currently experiencing a large construction boom,” according to Henry Kornblatt, president and CEO of The Kornblatt Company. “However, this boom is primarily coming from the cultural, educational and governmental sectors, thereby balancing out needed construction projects in those areas.”

Construction in the office market has not been as robust as the previously mentioned sectors. The Baltimore Center City office market is running at a relatively high vacancy rate of 17 percent for Class A office buildings, which is pushing the cycle close to an over-supply market. Banks and developers are generally well on target in their assessment of the market. There have been some developments with money coming from outside the local market in the form of a pension fund, which is adding to the square footage in new construction.

Significant office developments are mostly located on the waterfront, with new construction of several buildings on Pratt Street — such as 750 E. Pratt, with 320,000 square feet; Pier IV, with an additional 100,000 square feet connected to an existing 200,000-square-foot building; and 500 E. Pratt, with 275,000 square feet of new construction.

The majority of recent large leases are renewals coming from the financial, legal, educational and technical sectors of the market. Major leases that have closed recently include Miles and Stockbridge, which leased 100,000 square feet in the Bank of America Building; Whiteford and Taylor, which leased 100,000 square feet in the Wachovia Building; 180S, which leased 50,000 square feet in Columbus Center; and the U.S. Attorney’s Office, which leased 50,000 square feet in Charles Center South.

Class A rental rates in Baltimore are marketed between $18 and $30 per square foot, with higher rates reserved for the newest construction projects.

The most active submarkets are found in the Columbia and the Northeast Interstate 95 corridor, mostly due to contracts from government organizations related to Homeland Security.

Kornblatt adds, “I see the market as being very energetic — a lot of excitement is being generated by the fact that Baltimore City and the state of Maryland are putting their money into large constructions projects such as the Hippodrome, the Maryland Science Center, the Baltimore Visitors Center, the Peabody Institute and the Maryland Institute College of Art, just to name a few.”

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