Strong interest in properties in and near downtown Baltimore this year has been a boon for JLL.
The firm has closed sale on four commercial properties in and around downtown so far in 2017, an extremely high volume of transactions. These sales include the 104,203-square-foot Browns Wharf; 207,823-square-foot 10 E. Baltimore St.; 68,967-square-foot 101 N. Charles St.; and the 373,210-square-foot One North Charles building. The firm also has two properties 100 S. Charles St./2 Pratt Plaza, Tower II and 201 N. Charles St. on the market.
“Well there’s a tremendous momentum with the (central business district) within regards to the office to multifamily conversions. And I think there’s this optimism about what that will mean over the next few years,” Jay Wellschlager, managing director of JLL Capital Markets, said.
The conversion of outdated office space to apartments is spurring optimism about Baltimore’s downtown, Wellschlager said, pointing to the investment national retailers are starting to make in the area. Brands such as Starbucks, which opened a location at 10 Light St., Potbelly at One North Charles and Planet Fitness at 100 S. Charles have all recently taken space downtown.
“I think that’s all meant to, or intended to kind of start chasing a demographic that doesn’t necessarily live in the (central business district) today, but should be coming when you have as many (apartment) units as you do under construction or under conversion,” he said.
For years groups such as the Downtown Partnership of Baltimore have been touting the attractiveness of the city center to millennials. Younger residents attracted to city living, city tax credits for turning Class B office space into apartments and a steadily growing economy should be a boon for downtown Baltimore.
But obstacles remain to the transformation from a business district with limited use to a vibrant live, work and play neighborhood. Baltimore still hasn’t regained all the jobs it lost in the 2008 financial crisis, and economists predict a recession within the next two years. There’s also been some handwringing about whether the economy is creating enough jobs to support the amount of apartments already in the development pipeline.
Also, Baltimore is still recovering from the setback of the Freddie Gray riots in 2015 and is experiencing a historic violent crime wave that could scare away residents and investment if it’s not quelled soon.
It’s also unknown, Wellschlager said, if the momentum from the section of downtown closer to the Inner Harbor will spill over west of Charles Street to the Westside, which has trailed behind other parts of the traditional central business district in attracting investment.
Despite those challenges the recent sales shepherded by JLL do indicate that investors see reasons to bet on downtown Baltimore.
“When you look at the CBD location I don’t know that today if you were to walk up and down Charles Street after 6 p.m. if it’s tremendously vibrant, but it’s hard to think you can add that many residential conversions into the few block radius there and not have a very energetic 24/7 scene,” Wellschlager said.
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