Laurus Buys 25-Story Office Tower in Baltimore’s CBD
- Jan 09, 2014
Laurus Corp., a Los Angeles-based private real estate investment and development firm, has purchased its first Baltimore office building with the acquisition of 36 S. Charles St., for a reported $26.1 million.
The 25-story building has 294,274 square feet and was built nearly 40 years ago in the city’s Central Business District not far from the Inner Harbor. The owner, AREA 16B Associates L.P. was one of the original developers, according to Jonathan Carpenter, a managing director at Cassidy Turley in Baltimore. Carpenter and managing director James Wellschlager, of Cassidy Turley, represented the seller in the transaction.
Laurus, which owns hotel, office, retail and multi-family properties, has experience in turning around distressed or sup-performing assets. The Baltimore office building, located at Lombard and Charles streets in the Charles Center area, is currently 77 percent leased and in need of some upgrades. The largest tenant is the U.S. Attorney’s office.
“It needed some TLC and some tenant rollover and new leasing to be done. There was a lot of risk and a lot of opportunity,” Carpenter told Commercial Property Executive.
He said Laurus plans to make some capital and cosmetic improvements to the building.
“They want to put their stamp on it and reintroduce it to the market, get it out to the brokers,” Carpenter added.
He said there are two full floors of 12,500 square feet each available, although they are not contiguous. There are also several 5,000- to 7,000-square-foot spaces available and 6,000 square feet on the top floor.
Carpenter and Wellschlager began marketing the property in April.
“We had 10 offers, five that were qualified in our minds. We had good choices to choose from. Laurus seemed like the right fit,” he added.
Carpenter said the deal took several additional months to close because Laurus was assuming the owner’s loan.
The sale is the second institutional investment deal in less than a year in Baltimore’s CBD office market, he said. Carpenter and Wellschlager also handled the first transaction, the sale of 201 North Charles St., a 28-story building that was 90 percent leased to about 70 tenants.
“We anticipate additional momentum for office investment sales in Baltimore continuing into 2014 as the leasing market recovers and more institutional investors consider CBD Baltimore as a viable marketplace to invest due to its strong population growth, educated workforce, and its transformation into a true live, work, play environment,” Carpenter concluded.
He noted that several former office buildings are being transformed into residential properties, including one around the block from 36 South Charles St., where a former bank building at 10 Light St. is being converted to apartments.
Carpenter said the office leasing market is starting to come back after the recession, citing the recent decision by financial services firm T. Rowe Price to keep its global headquarters at 100 East Pratt St. for at least 15 years as important for the CBD.