T. Rowe Price, an anchor institution in downtown Baltimore for decades, said Thursday that it plans to remain in its Pratt Street headquarters through 2027, quelling fears that it would be lured to move to the county or the city's hot properties farther east.
The decision keeps the company's almost 1,300 downtown employees in the Inner Harbor and avoids a glut of office space in a market already struggling with high vacancy rates.
T. Rowe Price CEO James A.C. Kennedy said in a statement the building at 100 E. Pratt St. is well located, close to amenity-rich downtown, the airport and train station and consistent with the commuting patterns of the company's employees.
"Signing this letter of intent signals our ongoing commitment to downtown and the City of Baltimore, which has been our home since our founding in 1937," he said. "We're proud of our city, and on behalf of our associates we're pleased to be able to continue our presence here for years to come."
Earlier this year, T. Rowe Price said it was considering new headquarters in Harbor Point or Harbor East or consolidating operations at its Owings Mills campus, citing concerns about harassment of employees and the mugging of a vendor outside a downtown hotel. Its current lease expires in 2017.
Landlord Columbia Property Trust and the city worked to address questions about safety, increasing patrols in the area and updating the building's security cameras to link to the Police Department's command center, T. Rowe Price spokeswoman Kylie Muratore said.
Mayor Stephanie Rawlings-Blake said she is committed to continuing to work with the company as problems arise.
"One of the main things I wanted to stress with the leadership of T. Rowe Price is that I wanted them to feel very comfortable reaching out to me with their specific concerns," she said. "In order for us to make sure we get it right, we have to stay in communication."
A spokesman for Columbia Property Trust called T. Rowe Price a "valued tenant" and said the firm is pleased with the decision. He declined to comment further.
The letter of intent for the new 10-year lease applies to 427,000 square feet, the same space the company occupies now. There are no plans for renovation, and the current building and Owings Mills campus can accommodate growth "for the foreseeable future," Muratore said.
Downtown Partnership President Kirby Fowler said he is "encouraged" by the length of the new lease, which he said showed the company's confidence in the traditional downtown area.
"T. Rowe Price is sitting in the epicenter of downtown and they realized the value of that location," he said.
Developer Michael Beatty was wooing T. Rowe to move, making what Kennedy described this summer as a "very impressive" presentation of what Harbor Point could offer the investment management firm, which has more than 5,000 employees globally and more than $600 billion under management.
Financial services firms Legg Mason and Morgan Stanley have offices in Harbor East and Fells Point. Energy company Exelon has also committed to a new skyscraper in Harbor Point for its regional headquarters.
A move by T. Rowe Price would have hurt the Baltimore market, where Colliers International research shows vacancy rates for Class A office space currently hovering around 17 percent, said Robert Manekin, a Baltimore managing director of Colliers, a commercial brokerage firm.
"If T. Rowe Price were to have moved out in a couple of years, it would have automatically created what is an additional 5 percent vacancy at a time when Baltimore really needs to be absorbing space," he said.
Rawlings-Blake said the city has enough business to support both areas and she is "not interested in pitting one community against the next." In a statement, Beatty called T. Rowe Price's decision "great news" and said he expects most of the new tenants in Harbor Point to come from out of town.
"Investment anywhere in Baltimore is good for all of us," he said.
Manekin said T. Rowe Price's decision to stay also fits a corporate culture so averse to flash that the company's name does not — and will not — appear on the building, which they have occupied since 1975.
"This is a … company that really feels they do not have to have their name in lights," Manekin said. "Staying where they were, in cost-effective headquarters, probably had more appeal to them than a new corporate headquarters."