The owner of downtown Baltimore's tallest office building, at 100 Light St., has agreed to an early termination of a lease with USF&G; Financial Services Corp. - which has been subleasing to money manager Legg Mason Inc. - in a deal valued at $27 million.
As part of the agreement with tower owner Lexington Realty Trust, USF&G;, now a subsidiary of St. Paul Fire and Marine Insurance Co., also will transfer ownership of land under the tower valued at $16 million to Lexington, the real estate investment trust said in a news release issued late Monday.
The lease of the 530,00-square-foot tower with USF&G;, which built the 35-story tower in the 1970s before selling it to a predecessor of Lexington, was due to expire Sept. 30, 2009. USF&G; had remained in the building under a lease-back after selling, but it moved out in the mid-1990s.
Legg Mason will continue to lease about half the building, or 250,000 square feet, directly from Lexington until September 2009, when it plans to relocate its headquarters to a new tower in Harbor East. The money manager, which occupies the 17th floor and 21st through 35th floors, has an option to stay there for up to three months after the expiration of its sublease, Lexington said.
Lexington Realty officials could not be reached yesterday.
A commercial broker representing the building owner said yesterday that the search for a tenant to replace Legg Mason is in its early stages. The goal is to find a "large-name user" to fill that space, said David J. Downey Jr., a senior vice president and principal at Colliers Pinkard.
"It's going well; we're at the very beginning stages," Downey said. "We won't have the Legg space for a year and a half, so it's very preliminary, but we're in front of most of the major players in town."
About 88,000 square feet of the building, or six floors, is vacant.
The building owner is asking rent of $28.50 per square foot for the lower half of the building and $30 per square foot for the upper floors, Downey said.
Lexington Realty is building a 500-car garage across the street from the tower on Lombard Street, which should be completed by the end of the year, and is close to selecting an architect to redesign portions of the building, including the lobby and plaza, Downey said.
Lexington said its monthly net operating income from the building is expected to be about $500,000 through Sept. 30, 2009, following the lease termination. The monthly net operating income had been $1.1 million on a generally accepted accounting principle basis and $2.2 million on a cash basis, Lexington said in its release.