Baltimore’s suburbs continue to attract new and expanding companies with amenity-rich developments undercutting what was supposed to be one of the city’s strengths in competing for new firms and to entice existing companies to expand.
This counters the national trend, where urban centers have been attracting employers while suburban office spaces have lost tenants. The suburban markets’ strong performance in the Baltimore metro area has provided developers to go ahead with projects, some even on a speculative basis.
Those bets are starting to pay off, as even some existing businesses in Baltimore are bolting for suburban locations.
Late last month, St. John Properties announced plans to move ahead with eight new speculative buildings in Baltimore County and Anne Arundel County. Those projects consisted of nearly 500,000 square feet of office and research and development space spread over two projects.
“Given the sustainable leasing activity that we continue to achieve throughout the Maryland region, coupled with our favorable long-term view of the local economy, job growth, and expansion of businesses, we are proceeding with this speculative development program with complete confidence,” Richard Williamson, senior vice president of leasing and marketing for St. John Properties, said at the time.
That confidence proved to be justified. On Tuesday, Stanley Black and Decker announced it was expanding to St. John Properties’ Greenleigh at Crossroads in White Marsh. Expanding to White Marsh allows the company to grow by 92,000 square feet and provides the amenities companies view as essential for attracting and retaining talent.
At full build-out, Greenleigh at Crossroads will include 1,000 single-family homes and townhomes, 500 apartments, 300,000 square feet of mid-rise Class A office space, and 188,000 square feet of retail. Greenleigh at Crossroads will also include 827,000 square feet of flex/research and development space, 443,000 square feet of single-story office space, and a 120-room SpringHill Suites by Marriott.
Meanwhile, Baltimore has lost a handful of businesses to suburban locations in recent months. In September, Eisai Inc, a pharmaceutical subsidiary of Tokyo-based Eisai Co. Ltd., announced it was moving from the city and leasing 40,000 square feet at Greenleigh at Crossroads. Biotech firm Noxilizer outgrew its space at the University of Maryland BioPark. Instead of staying in the city, the company chose to lease 10,481 square feet of space at 1334 Ashton Road in Hanover in Anne Arundel County.
Companies that have stayed in Baltimore office space have continued the flight to quality that often results in taking less office space.
Recently, it was announced that KPMG would be relocating from Pratt Street to Harbor East in what appeared to be a smaller space. M&T Bank also announced it was staying in Baltimore and relocating to the new office building at 1 Light St. That move, however, leaves the property at 25 S. Charles St. without a marquee tenant; a new owner will need to fill that space after renovating the building.
Year-end reports on the Baltimore office market by JLL and Newmark Knight Frank found the city, particularly in the traditional Central Business District, was struggling compared to suburban markets. NKF’s report found a “noticeable performance gap” between suburban and city office properties.
But the news hasn’t been all bleak for Baltimore. National financial services firm Janney Montgomery Scott left Baltimore County to lease at 145 W. Ostend St., part of the $250 million Stadium Square project in south Baltimore. The company opened that location in November.