2017 STATE OF DOWNTOWN BALTIMORE REPORT

Transcription

1 2017 STATE OF DOWNTOWN BALTIMORE REPORT ISSUED APRIL 2018

2 Station North Bolton Hill State Center Johnston Square University of Maryland Medical Center Midtown Heritage Crossing Mount Vernon Science + Technology Park at Johns Hopkins Kennedy Krieger Institute Seton Hill Old Town Joh Ho Ho Preston Gardens io Park University of Maryland, Baltimore VA Hospital of Maryland University of Maryland Medical Center Bromo Arts District Royal Farms Arena Charles Center Mercy Medical Center Historic Jonestown Upper Fells Pigtown/ Washington Village Ridgely s Delight/ Stadiums Otterbein Inner Harbor Little Italy Harbor East Fells Point Harbor Point Sharp- Leadenhall Federal Hill Cross Street Market Horseshoe Casino South Baltimore Locust Point ONE-MILE RADIUS MAP Westport Employment: 119,312 Residents: 42,626 Office Space: 28.2 M S.F. Hotel Rooms: 8,875 Port Covington

3 executive summary WORK/LIFE BALANCE Downtown Baltimore excels at striking a work/life balance, which is why it s so good at attracting top talent. Pick any of our largest industry sectors healthcare, finance, hospitality, technology, for example and the trend of relocations to, and expansions in, Downtown Baltimore is undeniable. They re here because the best and brightest employees want to work someplace cool. They also know that work is not rewarding without a balance. Atop Downtown highrises, corporate names like M&T Bank, Transamerica, and Pandora now share the sky with expansive rooftop lounges, pools, and restaurants as apartment towers make Downtown the most densely packed residential neighborhood in the region. Back on the ground, the dining scene is exploding with restaurants using the bounty of our nearby farms and Chesapeake Bay, solidifying Baltimore s place on the world s culinary map. And though, at times, the restaurants seem to be coming and going, this is consistent with national trends. Our parks and plazas are filled with events from Spring to Fall. The Sandlot, the outdoor lounge in Harbor Point, offers a new way to watch the ships come in. And, the recent addition of bike lanes and an upgraded water taxi system offer even more pleasant ways to get to work without a car. Though the data in this report is a crucial indicator of our city s health, so is belief. The people who live and work in Downtown Baltimore believe in Downtown Baltimore. Our residents and employees genuinely like being here, and take great pride in their city. And it is this base that drives the economy for the entire city. Top 25 Largest U.S. Metro Areas: One-Mile Radius Statistics Population Average Household Income Households over $75,000 Employment 1 New York 190,901 2 San Francisco 127,962 3 Chicago 95,635 4 Philadelphia 84,027 5 Los Angeles 75,127 6 Seattle 69,874 7 Boston 53,129 8 Washington 47,856 9 San Diego 43, Denver 42, Baltimore (10) 42, Miami 38, Minneapolis 37, Houston 27, Portland 25, Atlanta 22, Orlando 19, Charlotte 19, Dallas 18, Pittsburgh 18, Phoenix 16, St. Louis 12, Tampa 11, San Antonio 9, Detroit 6,855 1 New York $183,086 2 Chicago $153,396 3 Boston $142,154 4 Washington $134,949 5 Houston $118,836 6 Charlotte $118,566 7 Philadelphia $117,649 8 Dallas $116,521 9 San Francisco $109, Seattle $105, Tampa $104, San Diego $100, Miami $99, Baltimore (16) $91, Portland $90, Minneapolis $90, Denver $89, Orlando $83, Pittsburgh $81, San Antonio $71, Atlanta $71, St. Louis $68, Detroit $65, Los Angeles $64, Phoenix $53,688 1 New York 75,494 2 Chicago 38,798 3 San Francisco 30,735 4 Philadelphia 25,551 5 Seattle 22,016 6 Boston 16,441 7 Washington 15,917 8 Denver 11,708 9 San Diego 10, Los Angeles 10, Miami 9, Minneapolis 8, Baltimore (13) 7, Dallas 6, Portland 5, Charlotte 4, Orlando 4, Houston 4, Tampa 3, Atlanta 2, Pittsburgh 2, St. Louis 2, San Antonio 1, Phoenix 1, Detroit 1,126 1 New York 1,078,486 2 Chicago 360,413 3 Washington 323,810 4 Boston 298,683 5 Philadelphia 263,865 6 Seattle 222,892 7 Houston 190,854 8 Los Angeles 178,156 9 Minneapolis 169, San Francisco 166, Denver 140, Atlanta 128, Pittsburgh 123, Baltimore (14) 119, Dallas 107, Charlotte 83, Detroit 76, Miami 76, San Antonio 76, San Diego 74, Orlando 73, St. Louis 66, Phoenix 61, Tampa 44, Portland 41,373 Environics Analytics through Spotlight ( ) = last year s ranking 1

4 housing WELCOME, NEIGHBORS As developments like One Light (featured on our cover) and 414 Light Street race skyward, forever altering the Downtown skyline, many people have asked Can we sustain this? The answer is yes. In 2017, the occupancy rate rose to 93% as large-scale projects like 500 Park, 2 Hopkins Plaza, and Stadium Square came online. And, according to our Housing Demand Study: Outlook 2022, released in 2017 (which is outlined on page 4) Downtown is in a position to absorb nearly 7,000 new units over the next five years, including the two new Light Street towers and 225 N. Calvert, already in the pipeline. 2 Hopkins Plaza Along with an improving occupancy rate, 2017 brought a healthy mix of conversion and ground-up development. Properties like 2 Hopkins Plaza and The Appraisers Building came online as stellar examples of converting office space to modern, stylish residences. Stadium Square and 500 Park completed construction and offer impressive amenities like private courtyards, pools, and fitness centers. GoDowntownBaltimore.com 414 Light Street 2

5 Notable Residential Openings Project Name Address Project Type Housing Type # of Units Stadium Square/ 101 W. Cross Street New Construction Rental - Market Rate 299 Hanover Cross Street 2 Hopkins Plaza 2 Hopkins Plaza Conversion Rental - Market Rate 182 The Appraisers Building 103 S. Gay Street Conversion Rental - Market Rate 137 Banner Hill 611 S. Charles Street New Construction Rental - Market Rate St. Paul 300 St. Paul Conversion Rental - Market Rate Park 500 Park Avenue New Construction Rental - Market Rate 153 Source: Downtown Partnership and Individual Developers For-Sale Housing Market Summary Housing Type Properties Sold Average Sale Price Median Sale Price Condo 114 $514,619 $281,250 Townhome 248 $373,878 $314,250 Stadium Square Class A Apartment Building Rental Rates Housing Occupancy Rates Apartment Size Average Monthly Rent Studio $1, Bedroom $1, Bedroom $2, Bedroom $3, All unit types $1, YEAR END % *Includes 23 buildings within the one mile radius defined by the following criteria: built after 1995; 100 units or greater; high-quality building amenities, and finishes in units. Source: Individual property managers and leasing agents. My work has taken me to cities all over, but no place I ve visited has hit me like this one. I had no idea what I d been missing. This city has its problems, don t get me wrong. But in three days I didn t meet a rude person, or see a dirty street, or talk to a single Baltimorean who wasn t proud to live there. Jay Heinrichs, Southwest: The Magazine, February N. Calvert Street 3

6 housing HOUSING DEMAND STUDY Since 2001, Downtown Partnership has conducted a housing study every five years. The latest, released in 2017, shows that demand for both rental and for-sale housing in Downtown neighborhoods continues to be strong with the ability to absorb up to 7,000 new units in the coming five years. Our key findings are listed below. Based on a 20 percent capture of the annual potential market for new rental housing units, and a 7.5 to 10 percent capture of the annual potential market for new for-sale housing units, the Downtown Study Area should be able to support up to 1,339 new market-rate housing units per year over the short term (next two-to-three years) and up to 1,405 units per year over the longer term (three-to-five years), for a total of between 6,685 and 7,025 new rental and for-sale units over the next five years. On average, the study predicts 8,335 households of potential renters and buyers of new multi-family and single-family attached residential units in the Downtown Baltimore Study Area each year over the next five years, an increase of 350 households per year (a growth rate of 4.4 percent per year). More than 53 percent of these potential households currently live outside the Baltimore City limits, up from 51 percent in More than 69 percent of the potential market consists of younger singles and couples, 20.5 percent are empty nesters and retirees, and 10.3 percent are traditional and non-traditional families. This reflects the increasing number of young people who are moving to the Downtown Study Area. As derived from the aggregated housing preferences of the target households, 68.5 percent of the new units should be rental apartments, 15.4 percent should be condominiums (for-sale apartments), and 16.1 percent for-sale townhouses, continuing the trend toward rental in the Downtown Study Area. GoDowntownBaltimore.com 4

7 hospitality & hotels HOSPITALITY & HOTELS Multiple hotels came online in 2017, including La Quinta, Marriot Delta, and Staybridge Suites, bringing the total current inventory to 8,875. Visitation numbers rose slightly, and Downtown s hotel performance continued to outrank the national average by nearly 2%. Hotel Performance Hotel Pipeline Occupancy ADR RevPAR Downtown (2017) 67.30% $ $ National (2017) 65.90% $ $83.57 Source: Smith Travel Research, Inc. / STR Global, Ltd. trading as STR CURRENT TOTAL INVENTORY 8,875 Visitation Numbers Year End 2016 Year End 2015 UNDER CONSTRUCTION Total Number of Overnight Visitors 10.6 million 10.4 million Total Number of Visitors 25.9 million 25.2 million Total Overnight Visitor Spending $4.26 billion $3.94 billion Total Visitor Spending $5.64 billion $5.44 billion Source: Longwoods International and Tourism Economics, as provided by Visit Baltimore PLANNED THROUGH Notable Hotel Openings Project Name Address Project Type Number of Rooms Marriott Delta Hotel 1 E. Redwood Street Conversion 150 La Quinta Hotel 200 W. Saratoga Street Conversion 42 Staybridge Suites 17 Commerce Street Conversion 101 Staybridge Suites 5

8 retail DOWNTOWN RETAIL In 2017, food was the name of the retail game in Downtown Baltimore. As our city s culinary star continued to rise, several new restaurants opened, diversifying and elevating our already impressive food scene. Downtown saw several new upscale spots debut, including The Bygone in the Four Seasons, Tagliata, and The Elk Room. Filicori Zecchini and Cilantro also opened, giving an international flair to Downtown employee lunch breaks. The Bygone at the Four Seasons It s no secret that national retail trends are precarious, and Downtown Baltimore was certainly not immune to these changes in With the massive popularity of e-commerce, the entire retail world is readjusting. But with a 90.1% occupancy rate and large-scale development projects like the new 50,000-square-foot Whole Foods and Harborplace redesign, we re optimistic about retail in Downtown. GoDowntownBaltimore.com Elite Secrets Bridal 6

9 Filicori Zecchini Echoing the national trend of retail uncertainty, Downtown saw a flurry of restaurant and shop closings. However, multiple high-end dining experiences opened in 2017, solidifying Baltimore s new image as a food destination. Also of note, total Downtown sales rose to $1.242 billion, up from $1.168 in Retail Occupancy Rates Downtown Retail Sales 94.2% 96.2% 90.1% National Baltimore Metro Downtown* Multi-tenant Projects Source: (National and Baltimore Metro): CoStar, Integra Realty Resources, Marcus and Millichap, Mackenzie Commerical Source (Downtown): CoStar, Individual property owners, managers, and leasing agents TOTAL DOWNTOWN SALES $1.242 BILLION Source: Spotlight, as provided by Baltimore Development Corporation Notable Retail Openings And Leases Name Address Business Type Status Tagliata 1012 Fleet Street Restaurant Open Cilantro 30 Light Street Restaurant Open Kabul Grill 55 Market Place Restaurant Open Elite Secrets Bridal Boutique 330 N. Charles Street Retail Open Charm City Cakes 618 S. President Street Bakery Open The Charles 1110 S. Charles Street Restaurant Open The Bygone 200 International Drive Restaurant Open Filicori Zecchini 1 E. Pratt Street Coffee Open Elk Room 1010 Fleet Street Restaurant Open 7

10 office & employment State of Downtown Tech Event, November 2017 THE BUSINESS OF DOWNTOWN Downtown contains over one-third of the city s jobs despite comprising less than four percent of its geographic area. Within that small footprint are 28.2 million square feet of office space housing the 119,312 people employed in Downtown. Given Mercy Medical Center, the University of Maryland, Baltimore, and our proximity to the Johns Hopkins medical campus, it s no surprise that a quarter of these employees work in the healthcare and social assistance sector. Downtown also welcomed the expansion of Morgan Stanley to 100 South Charles, adding hundreds of new employees to the core. And, according to our Core Tech: The State of Downtown Baltimore Tech & Innovation Report, the rapidly growing technology sector is now responsible for seven percent of the Downtown workforce, with thriving outfits like R2i, Fearless Solutions, Jellyfish, Verizon, and Exit10. GoDowntownBaltimore.com 8

11 MAKING MOVES Downtown Baltimore s Core Tech & Innovation generates $830 million in annual compensation and $1.8 billion in annual output. Strong showings like this are why Cushman & Wakefield included Baltimore as top #12 in their Tech Cities 1.0 report released in Jellyfish Baltimore Offices 2017 Occupancy: National and Regional Standing Downtown Baltimore 85.35% Baltimore City 87.78% Baltimore Metro National Downtown Baltimore, Baltimore City, and Baltimore Metro Vacancy Sources: CBRE, Cushman & Wakefield, JLL, MacKenzie, Newmark Knight Frank, and Transwestern National Vacancy Sources: CBRE, Cushman & Wakefield, JLL, and Newmark Knight Frank 87.45% 86.35% Employment by Industry Sector Healthcare and Social Assistance 25% Public Administration 15% Professional, Scientific, and Technical Services Accommodation and Food Services 13% 9% Finance and Insurance Information Educational Services Other Services (except Public Administration) Other* 8% 6% 5% 4% 17% *This category consists of the following sectors: Arts, Entertainment, Recreation, Real Estate, Manufacturing, Utilities, Transportation, Construction, Wholesale trade, and other sectors comprising less than 3% of total employment. Notable Lease Transactions Name Address Type of Lease Business Type Sq. Ft. Morgan Stanley 100 S. Charles Street New Lease Financial Services 300,000 M&T Bank 1 Light Street Relocation Bank/Financial Services 155,000 Johns Hopkins Center for Communications 700 E. Pratt Street Relocation MedTech 78,718 Vitreon America 1100 Wicomico Street Relocation Biotanical Research 50,000 US Internal Revenue Service 100 S. Charles Street New Lease Government 43,121 PricewaterhouseCoopers 100 E. Pratt Street Relocation Accounting Firm 32,000 Merrill Lynch 100 E. Pratt Street Renewal Financial Services 32,000 Cushman and Wakefield 1 E. Pratt Street Relocation Real Estate/Brokerage Services 21,000 McGuire Woods, LLP 500 E. Pratt Street Relocation Law Firm 21,000 US Department of Housing 100 S. Charles Street Relocation Government 20,000 and Urban Development 9

12 Presenting Sponsor Leadership Sponsors Community Sponsors Baltimore Development Corporation First National Bank Horseshoe Casino PMS Parking 225 N. Calvert Marks Thomas Moseley Architects GoDowntownBaltimore.com For more information about Downtown Partnership, its reports, or to become a member, please visit GoDowntownBaltimore.com, info@dpob.org, or call us at You can also find Downtown Partnership of Baltimore on Thanks to the Downtown Partnership staff who worked to compile this data and produce the 2017 State of Downtown Report. This report is produced by Downtown Partnership of Baltimore, Inc., which is solely responsible for its content. Data is collected by, or on behalf of, Downtown Partnership from a variety of sources and covers activity within a one-mile radius of the intersection of Pratt and Light streets. Charts, graphs, maps, and images are the property of The Partnership unless otherwise noted. Downtown Partnership of Baltimore is a 501(c)(6) non-profit incorporated in the State of Maryland. It has approximately 650 member firms throughout the mid-atlantic region from dozens of industry sectors.