Beatty Development Group President Michael Beatty has sold the Thames Street Wharf office building in Harbor Point to a California-based real estate company for $89 million.
At $341 per rentable square foot, Monday's sale of the 8-story building to KBS Realty Advisors, sets a Baltimore record, said Bo Cashman, a senior vice president of the institutional properties group at commercial real estate firm CBRE, which represented the seller in the transaction.
The previous record was set in 2005, when Georgia-based Wells Real Estate Investment Trust II Inc. bought the home of T. Rowe Price, 100 E. Pratt Street, for $316 per square foot. (The $207.5 million overall price of that deal was higher.)
“The acquisition of Thames Street Wharf points to a renewed interest among major real estate players in the Baltimore region as an investment opportunity,” Cashman said in a statement.
Institutional investors are starting to look more closely at secondary markets, such as Baltimore, as they get priced out of major cities, such as New York, San Francisco and Washington, Cashman said.
The 1300 Thames Street structure, the first built on the 27-acre Harbor Point site, opened in 2010. The $100 million project, between Harbor East and Fells Point, is home to Morgan Stanley’s Baltimore offices, among others.
An official from Beatty Development Group, which is starting work on a second Harbor Point tower this spring, said in December the developer wanted to recapitalize debt and equity for the property, which land records show was acquired from the Allied Chemical & Dye Corp in 2007 for $7.3 million. It was owned by Thames Street Wharf, LLC, an entity controlled by Beatty, according to a release.
Under the new ownership, Beatty Development, which split last year from the Harbor East Development Group, will manage Thames Street Wharf. The building contains 260,651 rentable square feet and is 86 percent leased, according to a news release.
Beatty called the sale a “watershed moment” for the city. The property drew more than 20 offers.
“Attracting this type of investment in Baltimore City by a world-class firm is yet another example that Baltimore has what it takes to be a viable and valuable center for investment,” he said in a statement.
KBS Eastern Region President Marc DeLuca said in a statement his firm liked the building’s location and its LEED Gold environmental status. The property is KBS’s first in Baltimore and second in Maryland.
“We chose to add Baltimore to our portfolio because the city is in the forefront for the investment community and has the resources to continue its growth as a valuable center for investment,” he said.