Another Downtown Baltimore Office Tower Hits The Market As Values Drop
The 25-story office tower at 120 E. Baltimore St. in downtown Baltimore is on the market for sale at the lender's request, the Baltimore Business Journal reports.
Grander Capital Partners purchased the 327K SF office building from Franklin Street Properties in 2017 at a significant discount. Grander paid $38.2M for the building after Franklin Street paid $62.75M in 2007, according to property records.
The state's most recent tax assessment estimated the building is worth around $27M.
According to its website, Grander purchased the 39-year-old building and intended "to add value through lease up." The owner lists the building as 74% leased with tenants including Truist, the State Retirement System of Maryland and the Baltimore City State's Attorney.
Grander didn't respond to Bisnow's request for comment. Cushman & Wakefield is reportedly acting as a broker, but a spokeswoman for the company declined to comment.
The office market in Baltimore's traditional central business district has already struggled to compete for tenants with newer developments in the city, such as Harbor East and Harbor Point. However, those struggles only increased since the start of the pandemic, which spurred a new wave of downsizing and flight to quality.
The CBD had a vacancy rate of nearly 24% at the end of last year, according to MacKenzie Commercial Real Estate's fourth-quarter market report. By comparison, researchers found a citywide vacancy rate approaching 20% and a 14% vacancy rate in the metro overall.
As a result, several office buildings in Baltimore's central business district have suffered substantial losses in value and in some cases sold at steep discounts.
In July, the state estimated the value of 100 E. Pratt St. dropped 45% from $171.4M to $93.65M, primarily because its primary tenant, T. Rowe Price, plans to relocate its headquarters to Harbor Point and leave 450K SF of office space to backfill.
MCB Real Estate, which held the property's mortgage through an affiliate, purchased One Pratt St. at auction in January for $25M. The building's previous owner, an affiliate of Banyan Street Capital, bought the building for $80.1M in 2018.
