July 9, 2024
Large financial firm to move from downtown to Harbor Point
By Melody Simmons at Baltimore Business Journal
Another firm is exiting Baltimore’s central business district for Harbor Point as downtown’s vacancy crisis continues to grow.
St. Louis-based Stifel Financial Corp. (NYSE: SF) is the latest company to downsize and sign a lease to move to the upscale waterfront enclave. The wealth management and investment firm will lease 35,000 square feet at Wills Wharf, a big reduction from the 84,000 square feet Stifel leases at the One South Street tower downtown.
The company has anchored that 30-story building for years and has its name on the roof, but had been searching for new digs as its lease neared expiration this year.
Neil Shapiro, a corporate spokesman for Stifel, was unavailable to comment Tuesday on the downsizing and move.
Stifel’s move is the latest hit to Baltimore’s central business district. The office vacancy rate in the area is projected to hit 30% in December when T. Rowe Price Group (NASDAQ: TROW) moves from 100 E. Pratt St. to a modern, new global headquarters in Harbor Point. Downtown’s office vacancy rate is currently 22.4%, second quarter data from JLL shows.
Baltimore’s vacancy crisis is similar to what is going on in other U.S. cities as remote work, downsizings and a desire to move to new, amenity-rich digs has turned markets upside down.
Such exoduses in Baltimore have led to a drop in downtown property values at nearly all commercial buildings in the central business district — and several property owners have sold off towers at bargain prices or sent them to auction to avoid further financial losses. One South Street, ironically, sold last June for $24 million to New York-based BHN Associates for nearly $43 million less than it last sold for in 2015.
The rose-colored granite building was once the high-profile downtown headquarters of Alex. Brown & Sons.
The move by Stifel will bring Harbor Point’s more than 1 million square feet of available office space to 98% leased, said Lou Haddad, CEO of Armada Hoffler (NYSE: AHH), which owns Harbor Point in a partnership with Beatty Development Group.
“Their decision to lease space at Wills Wharf further solidifies Harbor Point’s status as the top choice for innovative companies seeking a strategic location and exceptional amenities,” Haddad said, in a statement.
Stifel had leased 97,430 square feet of space at One South Street, but subleased 13,426 square feet on the 30th floor to the law firm Murphy & Falcone, according to CoStar. The global firm has $5.3 billion in equity and reported revenue of $4.3 billion in 2023, according to its website.
Besides snagging T. Rowe as an anchor tenant, Harbor Point’s corporate roster includes regional headquarters for Exelon Corp., Constellation Energy Corp. and Jellyfish.
Duane Morris LLP announced in January it would downsize and move into 10,000 square feet at Wills Wharf from its offices in nearby Harbor East. Other Wills Wharf tenants include Transamerica, RBC Wealth Management and EY, which all moved from downtown offices and Franklin Templeton, which moved to Harbor Point from the former Legg Mason tower in Harbor East. The cubic, glass-enclosed 325,000-square-foot Wills Wharf is anchored by a Canopy by Hilton hotel on its upper floors with the upscale Cindy Lou’s Fish House restaurant on the ground level.
Harbor Point also has retail and apartment towers at 1405 Point and 1305 Dock Street . Another apartment development, Allied | Harbor Point, started pre-leasing this month and is expected to open 312 apartment units in September.
Peter Jackson of JLL represented Armada Hoffler in the Stifel deal and David Downey Jr. and Courtenay Jenkins, of Baltimore’s Cushman & Wakefield office, represented Stifel.
