T. Rowe Price Group, the Baltimore-based global investment group founded in the city in 1937, announced plans Tuesday to relocate its headquarters out of its East Pratt Street high-rise that towers over the Inner Harbor downtown to a pair of new “green” office buildings a mile away in Harbor Point.
The move, scheduled to occur by 2024, is just the latest by a major employer out of downtown Baltimore’s traditional office center for the modern environs offered by the fast-growing Harbor Point, located on the site of a former chromium plant between Harbor East and Fells Point. It comes against a backdrop of past concerns voiced by T. Rowe Price executives about crime downtown and rising worries about traffic congestion in and around Harbor East.
“T. Rowe Price is excited to make this commitment — it’s an investment in our people, in our clients, and in our community and continues our deep and long-standing connection to the City of Baltimore,” said William J. Stromberg, T. Rowe Price’s president and CEO, in a statement.
He said the move will help the organization hire and retain top talent.
The money manager has about 1,700 employees stationed in the Pratt Street office, company spokesman Brian Lewbart said.
Their relocation a mile away will leave a gaping hole downtown among restaurants and retailers that rely on their business.
The company’s 100 East Pratt Street headquarters soars above the harbor, the Harborplace pavilions and McKeldin Square between Light and Calvert streets. T. Rowe Price occupies about 45% of the 1 million-square-foot building, where it has been located since 1975. The property is owned by Vision Properties, a Tampa, Florida-based real estate investor that bought it in 2016 for $187 million.
In 2013, T. Rowe Price mulled relocating its headquarters to another neighborhood such as Harbor Point or out of the city altogether when its lease expired in 2017, but committed to remaining downtown through 2027 when it subsequently agreed to renew its lease for 10 years.
But now the company has signed a letter of intent to move to about 450,000 square feet spanning two buildings in Harbor Point, where it will sign a 15-year lease for the space. It has enlisted Beatty Development Group in partnership with Armada Hoffler Properties for the development and construction. Terms of the deal were not disclosed.
The firm’s reinvestment in Baltimore should be viewed as a signal to other major companies about the city’s economic stability, said Donald C. Fry, the Greater Baltimore Committee’s president and CEO.
“T. Rowe Price is a premier company that could have chosen to move its headquarters anywhere,” Fry said in a statement. “The company’s agreement to a long-term lease for its corporate headquarters at the Harbor Point location is a testament that the company remains deeply committed to Baltimore and its communities and believes in its future.”
Laurie Schwartz, president of the Waterfront Partnership, also applauded T. Rowe Price’s decision to stay in Baltimore. In a statement, she said Pratt Street’s prime real estate will, hopefully, attract new and growing businesses.
Beatty Development has led Harbor Point’s growth over the past several years. Several of the city’s flagship companies already have offices there now, including Morgan Stanley and Exelon, the parent company of Baltimore Gas and Electric Co. and Constellation Energy. Exelon and Constellation left behind offices at 750 E. Pratt St. and 111 Market Place in downtown to move to Harbor Point.
Chris Seiler, a spokesman for Beatty, said the T. Rowe buildings are slated for the waterfront, to the west of the company’s Wills Wharf building on Thames Street and to the south of the Central Plaza and the Exelon Building. The site, adjacent to the popular Sandlot waterfront bar and recreation area, is mostly a parking lot right now.
Sandlot’s long-term future is not clear, though it is scheduled to reopen in 2021.
“We have always been upfront that Sandlot was intended to be an ultimately temporary creation until Point Park is completed, but we’ll see if there’s an opportunity to keep it in some capacity moving forward,” Seiler said.
T. Rowe Price’s new offices will include ample green spaces, an auditorium and a “campus-like” atmosphere with retail, dining and fitness options within walking distance, T. Rowe Price said in a news release.
The new headquarters might signal what’s to come for other companies facing the challenge of luring employees back to traditional office spaces in the wake of the ongoing pandemic. Vaccines designed to prevent the coronavirus from spreading could start becoming available by the end of 2020, though not widely distributed until well into next year. So-called “nonessential” employees may start returning to work spaces by mid-to-late 2021, depending on the speed of distribution.
Lewbart said the new space — a mix of open space and offices — will incorporate some of the best “lessons learned” from the pandemic, including insight gained from remote working. The firm’s custom space also will feature an emphasis on sustainability, he added.
T. Rowe Price will retain its campus in Owings Mills, where it has about 3,800 employees, the company said.
City officials have embarked on a bullish reinvigoration of the downtown area, which has struggled even more acutely during the coronavirus pandemic.
Over the past week, the Baltimore Development Corp. has begun looking for developers to reshape Royal Farms Arena into a state-of-the-art event venue. The city’s development arm also selected a design team to redevelop downtown’s “Superblock,” its once-bustling five-and-dime store district along Howard Street, into a mixed-use commercial, residential and retail strip compatible with 21st century consumers.
Shelonda Stokes, president of the Downtown Partnership of Baltimore — a nonprofit that steers central downtown’s business improvement district — said the organization includes Harbor Point in its definition of downtown.
She noted that employment in that area grew to 125,000 in 2019, before the pandemic, from 117,000 a year earlier.
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“A decade ago there was concern was about companies leaving the city altogether but we know now that top employees prefer a dynamic, urban environment, not a sterile office park,” Stokes said in a statement.
Still, some area businesses said the movement of larger companies out of the central business district only hurts them.
“I have zero lunch business now because they’re leaving in droves,” said Dave Niehenke, a co-owner with his sister of Mick O’Shea’s pub-style restaurant on North Charles Street. “This has been going on for a long time, but of course it worries me.”
Niehenke, who’s occupied space downtown for nearly two decades, said the coronavirus pandemic has accelerated some of the bar’s losses, and business likely will remain bleak over the cold winter months.
“When I moved in here in 2002, Charles Street was gorgeous,” he said. “Now, it’s half vacant. And in the next month, the rate of closure will skyrocket. It’s inevitable.”
Stokes expects the space left behind by T. Rowe Price to “lease back up quickly,” due to its transit-oriented location and price point.
“We’re still seeing a lot of positive activity to close out 2020,” she added. “Even during the COVID recession, people are planning for, and investing in, Downtown’s post-pandemic future.”