Baltimore City’s tallest building is getting ready for a makeover.
The 529-foot, 40-story Legg Mason Building at 100 Light St. will lose its primary tenant next year, and the building’s owners and the city’s commercial real estate community are prepping for its renovation and reintroduction.
“It’ll be like delivering a new building with a great location,” said T. Courtenay Jenkins III, senior director in charge of office leasing and sales for Cushman & Wakefield in Baltimore.
Global asset manager Legg Mason this past year signed a 15-year agreement to lease up to 400,000 square feet in a mixed-use complex under construction in Harbor East that includes the 24-floor Legg Mason Tower and the 44-floor Four Seasons Hotel.
As construction prepares for Legg’s occupancy by the end of 2009, plans are in the works to ensure one of the city’s iconic skyscrapers remains a crucial cog of the downtown business community.
Baltimore’s central business district has lost about 160,000 square feet of leased office space in 2008, as companies are opting for up-and-coming business locations like Harbor East and the New East Side, according to Cushman & Wakefield’s Baltimore Office Report. The World Trade Center, another older downtown building, is about 70 percent occupied.
The Legg Mason Building’s owner, Lexington Realty Trust, hired Colliers Pinkard to lease space in the building. The group is also working with architects and engineers to update the property.
‘UPSIDE’ OF CENTRAL BUSINESS DISTRICT
While some might perceive Legg’s move from Light Street as a crippling blow to the 35-year-old building, Jenkins said finding new tenants for the building won’t be that difficult. With limited new office construction in the city that isn’t spoken for, 100 Light St. will again become a desirable location for companies, Jenkins said.
“Before you see new construction, you’ll see 100 Light St. be the best location available for tenants looking for one or two floors of office space,” Jenkins said.
When Legg leaves the building, the property’s vacancy rate will be about 77 percent, assuming no additional leasing occurs before Legg’s lease expires, according to Lexington Realty. Jenkins said the likelihood is that several companies seeking a few floors of space will move to 100 Light St., rather than one large company that could occupy 20 floors.
“You’re most likely going to have to lease it floor-by-floor,” Jenkins said.
Lexington Realty Trust has planned extensive renovations of the building to appeal to future tenants, something several other downtown building owners, like the Verizon Building owners, are considering, said Mike Evitts, spokesman for Downtown Partnership of Baltimore.
“We don’t see any potential problems with filling 100 Light St.,” Evitts said. “The building and the location really stand out, and you’ve got the Center Club, which you can’t replace, because there’s so much history and soul there.”
In its new location, Legg Mason will pay the highest rent ever in Baltimore for high-rise office space at $34.15 per square foot, Jenkins said. That fact should help the real estate community as a whole, with a new high rate established, Jenkins said.
“Based on that new rental high, tenants aren’t going to be able get some of the rates they did in the past,” Jenkins said. “There’s a lot of upside in Baltimore.”
UPDATED LOBBY, PLAZA AND NEW PARKING GARAGE
The owner of the Legg Mason Building plans to invest $22 million in the 35-year-old property during the next year.
Legg Mason opted to leave the building by the end of 2009 and move to its new headquarters in Harbor East, because it needed more space, more parking and better amenities.
“It’s going to be a brand new, state-of-the-art space that we can customize,” Mary Athridge, spokeswoman for Legg Mason, said when Legg signed its Harbor East lease.
Lexington Realty Trust, which owns 100 Light St., is renovating and updating the building to attract tenants when Legg vacates.
The group is building a new 10-story parking garage just north of the building, adding about 530 parking spaces and 10,000 square feet of ground-level retail.
Lexington Realty also is working with an architect and civil engineer to develop plans to renovate the building’s lobby and redesign the plaza. Colliers Pinkard has been signed to handle leasing at the building and is working with Lexington Realty to formulate a marketing plan.
“Upon the Legg Mason lease expiration in 2009, the property is expected to be 23 percent leased,” Lexington Realty CFO Patrick Carroll said in March. “We believe that we can get the building to at least 50 percent leased prior to the end of [2009].”
Representatives from Lexington Realty could not be reached for further comment.
Lexington Realty is taking the right steps to make the building an attractive location for tenants, said T. Courtenay Jenkins III, senior director in charge of office leasing and sales for Cushman & Wakefield in Baltimore.
“You have to be able to bring the building up to modern-day standards and create a sense of place there,” Jenkins said. “If they do it right, they can be very successful.”
Baltimore Office Market
- The average rental rate for Class A office space in Baltimore City in the second quarter of 2008 was $27.10 per square foot/year.
- The overall vacancy rate in Baltimore City in the second quarter was 12.6 percent.
- Pratt Street and Harbor East continue to command the highest rental rates in the city.
Source: Cushman & Wakefield Baltimore Office Report
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