COPT eyes office development along Canton waterfront
By NATALIE SHERMAN and
The Baltimore Sun|
Oct 03, 2014 | 7:39 PM
A Columbia-based real estate developer wants to build four glassy office buildings on its waterfront property in Canton, a project that could create a kind of Harbor farther East.
Corporate Office Properties Trust's proposal calls for shopping, restaurants and four buildings with about 250,000 square feet of offices on top of several stories of parking, said Stephen Budorick, the real estate investment trust's executive vice president and chief operating officer.
The company has no time frame for when the project could begin because it is seeking tenants before committing to construction, Budorick said. It wants to pre-lease at least 100,000 square feet before starting on the roughly $60 million first phase of the project, he said.
"Our business is broad enough that we can afford to be very patient," he said. "Our view is that the fundamentals that make this a great site are only going to get stronger over time."
COPT, which specializes in offices for federal agencies and government contractors, acquired the land in 2009 as part of a $125 million deal that included the 17-story 1st Mariner tower. The parcel lies between the 1st Mariner building and west-facing harborfront along South Clinton Street.
The site's previous owner, developer and former First Mariner Bancorp CEO Edwin F. Hale Sr., received city approvals that allow development of 500,000 square feet of office space, 150,000 square feet of retail, a 450-room hotel and a marina on the site.
The land is currently a parking lot, but COPT finished a new seven-story parking garage nearby around the beginning of 2013, allowing it to consider further development plans, Budorick said.
Renderings for COPT's proposal show an extension of the harbor promenade, with restaurants close to the water.
"We are very bullish on Canton and the Baltimore business community and that site," he said.
Building offices, rather than residential, will ease the transition to the industrial zones farther east, said City Councilman James Kraft, who represents the area.
Kraft said he supports the plans, but cautioned that the community has been resistant to locating entertainment venues in the area. He also said he wants to see a plan to ease the effect of the addition of hundreds of jobs on the already busy Boston Street corridor.
"I'm very supportive of the development. I'm supportive of increasing the density and bringing the jobs and bringing more people there, but we have to have a way to move them around," he said.
COPT, which owns 180 properties around the country, recently completed repositioning its portfolio, selling off dozens of properties, to focus on office parks for government and defense-related tenants. The firm now may be entering a new phase, some analysts said this week.
"We think the company is returning to growth after several years of portfolio repositioning and a drag on its core defense demand due to budget pressure," J.P. Morgan analyst Anthony Paolone wrote in a report Friday.
When the Canton Crossing acquisition was first announced, some analysts questioned the firm's move away from its area of expertise. That question reappeared this week, but Budorick said the development helps balance the firm's portfolio and is in keeping with its emphasis on high-quality real estate.
Budorick declined to discuss conversations the firm has had with potential tenants, but said the firm is prepared to move quickly once it has the right one.
"We want to get ourselves in a position where we're prepared for opportunity," he said. "We believe we're there now."
At least one large potential tenant is looking for office real estate in the region.
McCormick & Co. said earlier this year it is considering moving its corporate headquarters from Sparks in northern Baltimore County in order to consolidate the 800 employees in its administrative offices, who currently work in four different buildings. The company employs about 2,400 people in Maryland.
Kraft said discussions about McCormick have been speculative.
"McCormick is the big fish that everybody wants to land. If McCormick said yes … then [COPT] would be ready to move tomorrow," Kraft said. "If COPT has someone else come in and say, 'I'll take 200,000 [square feet] or I'll take 175,000,' I'm relatively certain COPT would say yes."