Morgan Stanley Takes More Space in Baltimore

The firm signed a 69,000-square-foot office lease at the Bank of America Center, with plans to create as many as 800 new jobs in the city over the next four years.
Bank of America Center, Baltimore

Bank of America Center, Baltimore

Baltimore—Morgan Stanley & Co. is in need of more elbowroom in Baltimore, and the company just found it. With plans for creating as many as 800 jobs in the city over the next four years, the global financial services firm recently signed a lease with Carlyle Development Group for space at the Bank of America Center, the 500,000-square-foot office property at 100 S. Charles St. in downtown Baltimore.

Quoting Abdi Mahamedi, president & CEO of Carlyle Development Group, the Baltimore Sun reports that Morgan Stanley leased 69,000 square feet spanning two floors of the 17-story tower under an agreement allowing the company to further expand its occupancy.

“It is a tremendous win for the state and for Baltimore City that a global company like Morgan Stanley is continuing to grow its business here in Maryland,” Governor Larry Hogan of Maryland said in a prepared statement. “This expansion and the many new jobs being created underscores the promise we made to make our state more competitive and business-friendly, while creating new opportunities for all Marylanders.”

Local and state authorities are rewarding Morgan Stanley for its continued commitment to Baltimore by assisting with project costs. The Maryland Department of Commerce has signed off on a $4.5 million conditional grant via the Maryland Economic Development Assistance Authority and Fund. The City of Baltimore Development Corp. is doing its part by coming through with a $500,000 convertible loan. Additionally, the company is in a position to benefit from a host of income tax credits.

Morgan Stanley picked a prime destination for its expansion: Baltimore’s coveted Inner Harbor district. And the firm’s new digs will be none too shabby either, as 100 Charles is undergoing a massive makeover. For starters, Carlyle, which acquired the 36-year-old building for $45 million (a 70 percent discount to replacement cost) last year, plans to add 20,000 square feet of retail and co-working space to the property by building on an adjacent lot. When all is said and done, the renovated tower will be rebranded as 1 Pratt Plaza.

But there’s more to Morgan Stanley’s expansion than just premier space and a trophy location; there’s the convenience factor, too. 100 S. Charles sits less than two miles from Morgan Stanley’s current home at 1300 Thames St. at Harbor Point, where the company pre-leased 156,000 square feet in 2008 before moving in in 2010.

Combining its existing site at Harbor Point with the new space at 100 S. Charles, Morgan Stanley will have in excess of 250,000 square feet of office space in which to house its existing 1,000 employees and the hundreds of new staff additions that will materialize over the next few years.

Carlyle isn’t publicizing the financial details of the Morgan Stanley lease; however, the average asking rent for Class A space in Baltimore’s central business district is $22.40 per square-foot, according to a third quarter report by commercial real estate services firm Savills Studley. Space at 100 S. Charles is being marketed for as much as $28.50 per square-foot, as noted in Carlyle’s leasing brochure, and the landlord has good reason to believe the repositioned property can fetch higher-than-average rates. “Law firms and professional/business services in the CBD, particularly those looking for larger blocks of prime space on Pratt St. and surrounding areas, have limited options,” according to the Savills Studley report. “As of late September, only nine buildings in Downtown Baltimore were offering a contiguous block of 50,000 square feet or more.” And of those nine buildings, the report continues, many are Class B product.

Image courtesy of Yardi Matrix