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Morgan Stanley building at Harbor Point for sale
Harbor Point’s only current office building, the Thames Street Wharf, is for sale.
The modernistic glass and brick eight-story structure at 1300 Thames St. on the waterfront near Fells Point — best known for its majority tenant, Morgan Stanley — has 260,651 square feet of office space and opened in 2010. It is currently 86 percent leased.
Its ownership group, which includes developer Michael Beatty and H&S Properties Development Corp., recently listed the property with CBRE.
In a prospectus, the commercial real estate broker group describes the property as a “trophy” office building located near the upscale Harbor East, also developed by Beatty and H&S Bakery owner John S. Paterakis.
“Thames Street Wharf is far superior to all other Class A office assets in Baltimore,” the CBRE document states.
“In terms of quality and location, there is only one asset in the same league as the subject and that is the Legg Mason Tower,” it goes on. “Baltimore’s Central Business District has no buildings that can realistically compete with these assets, and the CBD has experienced limited growth over the past two decades. The result is tenants have very limited options for high quality assets that have large floor plates, state-of-the-art HVAC systems, security, amenities and adequate parking.”
The CBRE prospectus also contains a confidentiality agreement for prospective buyers, saying it will share “certain material, data and information” only on such a basis. “CBRE has prepared the evaluation material for use by a limited number of parties,” it says.
CBRE executive Robert “Bo” Cashman denied the building was for sale during an interview on Monday. On Tuesday, he declined to answer questions about the property or the asking price.
The building is valued at $56 million, state assessment records show.
Marco Greenberg, a vice president for Beatty Development Group LLC, said in a statement: “As is frequently the case in commercial real estate, we are looking to recapitalize both the debt and equity for the Thames Street Wharf building, and are using CBRE to help us generate interest.
“We will continue to maintain a stake in the building, where our new offices are located, and look forward to expanding our commitment to Baltimore,” Greenberg said.
The Thames Street Wharf building benefited in December 2010 after the Baltimore City Council voted to establish a special tax increment financing district at Harbor Point, where the wharf building stood as the sole commercial property.
Designation of the 27-acre property as a TIF district meant that the Thames Street Wharf could exercise property tax exemptions under the TIF and the state enterprise zone. Overall, the Harbor Point TIF meant about $155 million in tax breaks for Beatty and his then-partner Paterakis. The two dissolved their partnership last year after Beatty formed Beatty Development Group.
While they were partners, though, they sought and were granted a series of tax breaks to build Harbor East, including incentives to help build the 750-room Baltimore Marriott Waterfront, which pays just $1 a year in property taxes because of a 25-year PILOT arrangement, or payment in lieu of taxes, established in 2001.
In June 2009, the city granted two other PILOTS to Beatty and Paterakis for the Legg Mason tower and a parking garage in Harbor East. Under the PILOT, the city relinquished $23 million in property tax revenues from the Legg building for 15 years and $11 million for the garage for a 25-year period.
Beatty Development Group successfully sought other tax incentives for the Harbor Point project this year.
On Monday, the city’s Finance Board voted to allow the sale of $36 million as a first tranche in $107 million in TIF bonds to help fund infrastructure and other construction at the site as part of the Exelon Corp. project. Beatty Development Group is purchasing the bonds.
The energy giant is expected to lease office space and a trading floor at the building for up to 20 years for about $125 million.
This fall, architects added 130 apartment units into the Exelon tower to generate rental income there.
The Harbor Point site is the location of the former Allied Signal chromium plant. Toxic chromium remains buried underneath much of the 27-acre parcel, covered by a protective cap that was placed there in the 1980s as part of a $100 million toxic waste cleanup, mandated by the U.S. Environmental Protection Agency.
