T. Rowe Price has signed a letter of intent for a 15-year lease in Harbor Point, where it plans to move its headquarters in 2024, the company announced Tuesday.
As the latest business to move away from central downtown Baltimore, T. Rowe’s relocation will have dramatic repercussions on the city’s commercial real estate landscape. At the same time, civic leaders breathed a sigh of relief that one of Baltimore’s iconic companies had committed to keeping its headquarters in the city.
“T. Rowe Price is excited to make this commitment — it’s an investment in our people, in our clients, and in our community and continues our deep and long-standing connection to the City of Baltimore,” T. Rowe’s President and CEO William J. Stromberg said. “In Harbor Point, we will have a vibrant campus-like atmosphere, with top-notch amenities and modern spaces designed to support the collaborative way we work with each other and with our clients.”
Two buildings will be custom-built for the asset manager, with the goal of creating a space that “supports the firm’s collaborative culture,” according to a news release; the buildings’ designs will also focus on sustainability.
The headquarters will be developed by Beatty Development Group in partnership with Armada Hoffler Properties. Armada Hoffler will also be the general contractor for the project.
Michael Beatty had previously pitched T. Rowe on a Harbor Point headquarters in 2013. At the time, the asset manager opted to instead stay in its current headquarters at 100 East Pratt St. until its lease expired in 2017.
“T. Rowe Price is a true Baltimore institution, and their continued commitment to our city is nothing short of inspiring. Our team looks forward to working with T. Rowe Price to create an innovative, state-of-the-art global headquarters at Harbor Point that reflects the core values that the company is so well known for,” Beatty said.
Harbor Point, which sits between Harbor East and Fell’s Point, was chosen for its proximity to various amenities and its wealth of green spaces. T. Rowe settled on Harbor Point after completing an extensive search of locations in Baltimore; the company also considered remaining in its current headquarters and consolidating its downtown operation at the nearby office in Owings Mills, which employs 3,800 associates.
In making the decision to move to Harbor Point, employee safety was “a top priority and was one of many factors we considered,” spokesman Brian Lewbart said. The firm had previously expressed concerns to the city about crime near its current headquarters.
The move is indicative of the downtown area’s ability to attract and retain top job creators, said Shelonda Stokes, president of the Downtown Partnership of Baltimore.
“A decade ago there was concern about companies leaving the city altogether but we know now that top employees prefer a dynamic, urban environment, not a sterile office park,” Stokes said in a statement. “T. Rowe’s intra-downtown move reflects this. They’re relocating a few blocks but still within the one-mile radius we use for our State of Downtown data.”
About 1,700 employees work at T. Rowe’s Baltimore headquarters and will be moving to the new location when it eventually opens.
Donald Fry, president and CEO of the Greater Baltimore Committee, echoed Stokes’ sentiments, stating that T. Rowe “could have chosen to move its headquarters anywhere” and that its decision to remain in Baltimore speaks to the “many upsides” that the city offers to corporations.
“This announcement is significant as it sends a strong message about the city’s economic stability and the ability to attract and retain other major companies,” Fry said.
Stokes also said she expects the 100 East Pratt St. office to find a new lessee quickly, considering Pratt Street’s architecture, price points, proximity to transit and high occupancy rates.
But Terri Harrington, senior vice president with MacKenzie Commercial Real Estate Services and a Downtown Partnership board member, said she worries about the blow to Baltimore’s Central Business District, which is struggling to keep up with surrounding submarkets like Harbor Point and neighboring Harbor East.
She’s hoping that the city’s incoming administration will take steps to make the Central Business District more competitive to new businesses looking for real estate in the area, such as providing incentives and improving infrastructure.
“When you get the news of a couple of impending vacancies on top of each other, such as Gordon Feinblatt … frankly, it starts to give us some ammunition to go to our leaders and say ‘we’ve got to do something about this,’” she said.
Despite concerns about the fate of the Central Business District, Harrington said, without attractive downtown options like Harbor Point, there would be a much greater risk of T. Rowe and other major companies in Baltimore moving their headquarters out of the city.
“When I hear of a company like T. Rowe really doubling down on staying in downtown, that is great news,” she said. “That’s a win, that we did not lose T. Rowe to an expanded campus in Owings Mills.”
Harbor Point is in one of the city’s enterprise zones, which means that property tax credits are available to businesses that construct new or substantially improve existing business property in an enterprise zone. T. Rowe plans to take advantage of these credits, according to Lewbart.
The developer also would be able to take advantage of the $107 million tax increment financing package approved by the Baltimore City Council for Harbor Point in 2013.
So-called TIF financing lets local governments pay for public infrastructure for real estate projects by selling bonds and then paying off the bonds with future expected increases in tax revenue. Such financing is seen as crucial by developers and city officials but often provokes protests from community activists.
T. Rowe operates over 20 offices worldwide, and has been headquartered at 100 E. Pratt St. since 1975. One of Baltimore’s most prominent landmarks, the building is owned by Vision Properties, based in Tampa, Florida, which acquired the property in 2016 for $187 million.
The original 10-story concrete building was finished in 1975 and a 28-story glass and steel tower was added in 1991.
T. Rowe has been headquartered in Baltimore since its founding in 1937. The company said it will retain and continue to invest in its Owings Mills location, which opened in 1996.