California-based Hertz Investment Group has purchased the Wells Fargo Tower in downtown Baltimore for $36.75 million.
The 24-story Class A building is at 7 St. Paul St. and 106 E. Baltimore St. The building, which is currently 67 percent leased, is Hertz Investment Group’s first office property acquisition in Maryland.
“We’ve been studying the Baltimore market for several years, and finally found the asset that met our acquisition criteria and investment strategy,” Judah Hertz, chairman of Hertz Investment Group, said in a statement. “We seek office properties located in or near central business districts that offer strong investment value.”
The property, which was delivered in 1985, was purchased at foreclosure auction in early 2017 for $15 million, according to state property tax records. In 2003 the asset sold for $50.2 million.
Tenants in the building also include the law firms Whiteford Taylor & Preston, Anderson Coe & King, and Wright, Constable & Skeen. Recent upgrades to the Wells Fargo Tower include lobby renovations along with the replacement of water pumps, cooling tower and chillers.
Hertz Investment Group’s portfolio consists of 64 assets in 23 cities, including markets such as New Orleans, Cleveland and Indianapolis.
The Wells Fargo Tower is well-positioned to benefit from a bevy of nearby development.
Across Baltimore Street developer Madison Marquette is building 1 St. Paul St., which includes the first new Class A office construction north of Lombard Street in 25 years. That property will be M&T Bank’s new regional headquarters.
Florida-based developer Blake Casper, with on-the-ground developer Metropolitan Ltd., is transforming the old Alex. Brown & Co. building at 135 E. Baltimore St. into a restaurant space. That team also plans to turn the property next door at 125 E. Baltimore St. into additional retail space. The 25-story SunTrust Bank building at 120 E. Baltimore St. also sold in October for $32.8 million.
The sale comes on the heels of positive news for the city’s central business district. Newmark Knight Frank released a report on Monday that found vacancy declined in the submarket by 170 basis points in the last year. Average asking rental rates downtown also increased by $1 year over year, reaching $23.11 per square foot.
Sales downtown, particularly in the Pratt Street corridor, have been robust to start the year. Office sales in that section of the city topped $140 million through the first quarter of the year. Notable property sales include the $80.1 million sale of One Pratt St. and the $60 million sale of 500 E. Pratt St.