News
KIRBY FOWLER'S CHARMED CITY
March 13, 2012
| Baltimore City's office occupancy is climbing and will get extra help from apartment conversions north of Pratt. And all those extra residents will keep egging on demand for retail, especially restaurants. (Nobody knows how to cook anymore, and anyone who does is a chef.) Not a bad outlook, according to Downtown Economic Partnership prez Kirby Fowler. |
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| This morning, he told us office occupancy in the one-mile radius emanating from Pratt and Light was 19% in 2010 and that the updated number his organization will release soon will show an improvement. The ideal rate to balance tenant/landlord bargaining power is 10%, he says, so there is a ways to go. Nonetheless, Baltimore's occupancy is 28th among the top 64 US CBDs, better than Chicago, Atlanta, and Dallas, for instance. (We also consider ourselves better at football.) |
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| There was a large exodus of office tenants 15 years ago, but Baltimore City hasn't lost a major one since Piper & Marbury left for Mount Washington's 6225 Smith Ave (above) in 2000. (Successor firm DLA Piper renewed there in 2010.) The more recent troubles owe to downsizing and M&A, especially among banks like M&T and Provident in '09. |
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| Meanwhile, the 106 square blocks between Pratt and Centre streets (as in not the waterfront) is the city's fastest-growing residential Census tract, Kirby says. In the past 10 years, the population there rose 130% from 1,700 to 4,000 (50% of those minorities). As the waterfront attracted office tenants over the past two decades, the Downtown Economic Partnership has used incentives to help developers convert the older offices into apartments. For the past three years, though, Kirby got no calls about projects like that. Good news: The phone is ringing again, and now some of the bigger developers are among those on the line again. Most of the stock there is market rate, he says, but ground-up construction and incentivized conversions require affordable components. |
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| All those new residents are driving retail demand, especially for restaurants, Kirby tells us. Panera, though originally leery of opening on West Baltimore Street near the University of Maryland, reported its recent opening there as the eighth best ever. Brio opened at Pratt and Calvert earlier this month, and Starbucks will open its fourth Baltimore City location this month. (Good news because we need help staying awake now that daylight savings has arrived.) |
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| Kirby also says Harborplace has taken pains to evolve from a tourist food court to a resident-serving shopping center, landing Urban Outfitters two years ago and H&M last year. The one-mile radius area from the nearby Light and Pratt intersection is the eighth densest(way better than having eight dentists) in the country, and retailers like that. Consider, for example, that when Filene's was having trouble, it closed every Filene's Basement in the country except for its Pratt Street location. That one did eventually close upon Filene's bankruptcy, but the spot became Baltimore's first stacked big-box store (Best Buy). There's a lack of other existing blocks for, say, 30k SF retailers like Bed Bath & Beyond, and Kirby's hearing interest from developers for those kinds of projects. He says the 10-block strip along Pratt has the potential to be Baltimore's Fifth Avenue, albeit with more wallet-friendly stores. |
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| He also tells us the Downtown Economic Partnership is raising money to improve Downtown parks and plazas, including a $700k project in front of Brio. It's raised $2M so far to remove the skywalk at Hopkins Plaza and add green space and more light. And it'll spend $3.5M on similar work at Preston Gardens. Kirby says that around the city, his organization has removed five berms separating buildings from the street, and that has improved the liveliness of the city and created room for restaurants like Brio and Kona, which we snapped driving past One E Pratt. |
