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The Interview: Shapiro launching Baltimore office of commercial tenant brokerage firm

Dan Shapiro is senior vice president of Cresa.
Dan Shapiro is senior vice president of Cresa. (Barbara Haddock Taylor, Baltimore Sun)

With the ongoing development east of the Inner Harbor, the expanding suburbs in Baltimore and Howard counties and the tried-and-true appeal of downtown, the Baltimore metro region has corporate real estate for every tenant's taste and need.

All of those options can be overwhelming, says Daniel J. Shapiro, who aims to become a vital member of Baltimore's business community by helping companies figure out what they want and require from commercial space.

"Real estate should not be an afterthought. It's typically the second-highest cost, behind salaries," Shapiro said. "Real estate should be a tool that's used to further your business objectives."

Shapiro, 27, is a senior vice president at Cresa, one of the world's largest real estate consulting companies that only represents tenants. For years, Cresa's consultants have been working in the Baltimore region from an office in Bethesda.

Next month, Shapiro is launching the firm's first-ever office in Baltimore. It will be Cresa's 57th office in North America.

"What we're helping clients do is use their real estate and align their real estate with their business goals to help them grow and become more profitable," Shapiro said.

He recently sat down with The Baltimore Sun to talk about the prospects for commercial tenants in the Baltimore region.

Why is Cresa opening a Baltimore office now?

It turns out that Baltimore is the only top 20 market by office size — if you look at the total size of office buildings — that Cresa didn't have an office in.

We've been doing a lot of work in Baltimore for our national clients that have a presence there, but for some of those assignments we were co-brokering with a local firm. So we determined the need from a client service standpoint.

The real potential is that there is no other tenant-only firm that's based in Baltimore. It just looked like a fantastic opportunity.

We do not do any work with developers, owners or landlords. Every service we provide is strictly for tenants. The way that we think about the real estate process is different because of that, because we've only seen it from one perspective. We don't have to fear losing landlord listings.

How many clients are you working with now in the Baltimore region?

Currently, we're working on approximately 17 assignments in the Baltimore market with various clients for about a total of 1.4 million square feet. We're very active now.

Describe the types of clients, in terms of industry and size, that you work with — and want to work with — in Baltimore.

In Baltimore, so far, we've been working with several government contractors and technology companies. We are also working with a not-for-profit organization and several professional services firms.

But I would say that the largest group that we're working with is in the government contracting space, related to what has been going on with BRAC and with the Fort Meade area. There's a lot of activity there. We've been fortunate to pick up some of those relationships. It's not necessarily always defense contractors, it's social services and life sciences as well.

In terms of groups that we will help or that we are looking to work with, it's really not industry-specific.

Historically, in Washington, our tenant base has mostly been in the 10,000- to 25,000-square-foot range. So far in Baltimore we've been working on assignments that are a little bit larger than that.

I'd say a good portion of our clients right now are in the 40,000- to 100,000-square-foot range. However, we're still working with 10,000- to 20,000-square-foot groups — businesses that are looking for either a partial floor or a full floor of an office building.

But we're not limited to office buildings. We're also looking at flex buildings and industrial work as well. It's a good tenant makeup, several different industries and several different size groups.

Is commercial real estate in the Baltimore market changing hands quickly? Are tenants moving in and growing?

Baltimore has been categorized, historically, as not having as much velocity as Washington, D.C. — not as much movement with tenants.

However, the tenants that we're working with in Baltimore, especially in the government contracting space, are growing. I think that's contrary to a lot of the news that's out there, but a lot of our clients are doing well right now. They're doing good business; they've filled up their space; they're looking for expansion opportunities.

Because of the makeup of the Baltimore market, there are some good opportunities for them in existing buildings all around the area.

Most of the movement that we're seeing is in the suburban markets — not in the downtown core. Harbor East has had a lot of activity. But for most of our clients, currently, their activity has been in the suburbs. Howard County and Baltimore County is where we're seeing a lot of movement right now.

Brokers who focus on renting space in downtown buildings have criticized Harbor East, alleging its newer developments are stealing tenants from the Pratt Street corridor. Is downtown still an attractive place for tenants?

Compared to Harbor East, the CBD [central business district] is a value play. The buildings are obviously less expensive than Harbor East.

But the CBD, especially on Pratt Street, is still a fantastic location. You're right on the harbor, you have access to walkable amenities. We're looking for ourselves at the CBD because of the value there.

There's a discount that could be as much as $10 off the new stuff in Harbor East, on a per-square-foot basis.

People who want a presence in Baltimore, who want to find the great value on great space with great views, there's a lot of opportunities in the CBD.

If they are looking for the trophy high-end product, then Harbor East is more their direction.

What does Baltimore need to focus on in order to get commercial tenants into the city?

Tenants are usually looking for similar things. They're looking for a great amenity base. They're looking for an area that has nearby amenities that employees can walk to, so that they don't have to spend a lot of time away from the office. For a lot of groups, the questions are: "Do we have several different food options? A dry cleaner? A post office nearby?" And the city has that to offer.

Parking is one thing that we've heard from everybody, every tenant we've worked with that's looking at downtown Baltimore. For them, parking is crucial because a lot of buildings don't have a garage and the only option is a public, city garage nearby that employees have to use. That's fine, but I think parking is really important, and I just don't see enough of it.

Should potential tenants of Harbor East developments be concerned about traffic?

I can see how that's going to be a huge problem. It seems that we continue to push development and continue to increase density without the infrastructure — the roads — to support it.

Look at the Intercounty Connector. We built up these major metropolitan areas and 20 years later we built a road to connect the two. But that seems to be the order of things. The development happens and then the roads come.

If you've got one thoroughfare, with two lanes each way going in and out of a dense population center like Harbor East, it's going to have to be something that gets addressed sooner rather than later.

You're a young guy. How are you going to convince potential clients that you and the two other members of Cresa's Baltimore team have enough experience to handle their accounts?

While we will be our own operation in Baltimore, we will work seamlessly with our group in Bethesda, which is headed by four partners who have been doing only tenant representation each for at least 25 years.

We're going to be calling upon and working hand-in-hand with the folks in Bethesda and D.C. to service clients in Baltimore. We're committed to providing the best service and using every resource we have and bringing that to Baltimore.

steve.kilar@baltsun.com

twitter.com/stevekilar

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