Baltimore’s downtown is going through a massive transformation, with developers reimagining the city’s skyline by converting old office buildings into residential towers. Due to the metro’s strict historic preservation laws, most of these changes result in assets that integrate the city’s past and present. In the last few years, thousands of new units have come online in the city’s urban core area, catering to residents that want to walk or bike to work.
After decades of stagnation, transformation in the city really began once an adjustment to the city’s legislation was made, driving the revitalization of Charm City’s downtown appeal. With strong market demand, the city approved in 2014 a 15-year tax credit for developers seeking to convert underutilized office space into residential units. As part of the deal, developers would not have to pay property taxes in the first two years. A development boom began soon after, with many bank buildings constructed in the early 1900s now transformed into luxury apartments that are rapidly filling up.
One of the best examples illustrating this trend is 10 Light St., a 34-story landmark of downtown Baltimore that was originally constructed for the U.S. Customs Service and dubbed The Appraisers’ Building. Located two blocks from the Inner Harbor, the LEED-certified Art Deco building preserves unique architectural features and includes more than 400 luxury apartments. The Lenore, The Vault and 36 Calvert also used to be office buildings. To learn more about this conversion trend, Multi-Housing News spoke with Donald Fry, president & CEO of Greater Baltimore Committee, an organization that includes more than 500 businesses, nonprofits and educational and civic institutions.
How have developers managed to maintain historic buildings unique features while converting them to residential projects?
Donald Fry: In Baltimore, we value our history and our historic architecture, and developers are finding both to be very valuable for attracting renters looking for a truly urban and upscale lifestyle. Many developers have found inventive ways to showcase these authentic historical details in their projects—whether it’s highlighting original mosaics and Art Deco details or incorporating old bank vaults into the design for new apartments. These types of features are what make the apartment buildings truly unique. They’re beautiful, spark attention and conversation and tie the city’s future to its past.
What is the demand for luxury apartments in downtown Baltimore?
Fry: There has been a dramatic increase in demand for apartments in downtown Baltimore during the past several years. Market trends point to demand continuing to grow. About 5,200 new apartments and condos came on the market between 2012 and 2017, according to data from the Downtown Partnership of Baltimore. The group estimates there is demand for about 1,400 additional units per year over the next five years.
While we don’t have precise figures breaking down demand for luxury apartments from market-rate units, there is a trend in income growth in the downtown Baltimore area. The median household income for the city as a whole increased more than 20 percent to $44,800 since 2012. By comparison, in the downtown area specifically, the median incomes have increased about 44 percent during the same time period to $53,100. Today, more than half of downtown households have annual incomes of $50,000 or more, according to data from the Downtown Partnership of Baltimore.
What kind of renters are most attracted to these luxury apartments?
Fry: Professionals, Millennials and empty-nesters are moving into downtown Baltimore. Many renters walk to work in nearby office buildings. Others commute by car and bike or by public transportation to offices slightly further away. There is a significant number of renters who work in Washington, D.C., and take the MARC commuter train each day. There has also been an influx of students, including medical students from University of Maryland, Johns Hopkins University and law students from University of Baltimore, choosing to rent downtown. Families with young children are also moving into these apartments, drawn in part by the proximity to museums, restaurants, the Inner Harbor and other fun attractions.
Tell us more about the kind of amenities offered at these luxury buildings.
Fry: There is a range of very attractive amenities, including saltwater infinity swimming pools, state-of-the-art gyms, yoga studios and demonstration kitchens for cooking classes. Some apartment projects are also offering small parks or common spaces for dogs to run around and “pet spa” rooms where people can give Sparky a bath. Many renters like to get around by bike, so secured bike storage rooms are an important feature. A common feature is a place to retreat from the bustle of city life, to relax and socialize with friends. For example, a number of the apartment buildings include an elevated courtyard with a park-like feel, often surrounding a pool, and large-screen TVs in indoor and outdoor common areas.
Where do you think Baltimore will stand five years from now if its downtown area continues to be developed at this rapid pace?
Fry: Baltimore will continue to see the downtown area attract retail shops, restaurants and other businesses to cater to the apartment renters’ needs. Over the past few years, there have been numerous initiatives to make the area safe and attractive for pedestrians and bike riders. That will grow in the coming years as the apartments fill up with renters who want to walk and bike the city. There are more feet on the street downtown today due to the apartment conversion trend. We are seeing more downtown residents walking dogs, jogging, shopping and pushing strollers. That is really changing the vibe of downtown Baltimore. It is fast becoming a place where workers and residents have a sense of shared community and connectedness. They are meeting and greeting each other on the streets, not holed up in offices.
A stretching pattern
While downtown’s former office buildings are being remodeled as sleek apartments, other luxurious projects are being built from the ground up in neighborhoods that ring the core downtown area. Many of these communities appear on the site of obsolete or abandoned office buildings, such as Anthem House in Locust Point. Constructed on the site of an old General Electric service center and developed by The Bozzuto Group, the S-shaped building opened last summer.
“Bozzuto is committed to building communities that respect the environment in which they are built and ignite change in the cities in which they exist. These communities will be instrumental in attracting and retaining residents who will create thriving, growing and supportive neighborhoods that benefit the entire city. As a resident of Baltimore, it is exciting to see and contribute to the momentum of new apartment construction. It is a dynamic market and the increase in housing choices will only strengthen our city’s economic growth and diverse community,” Toby Bozzuto, president & CEO of The Bozzuto Group, told Multi-Housing News.
Hiring among major employers in the area, such as Johns Hopkins University, University of Maryland and Under Armour, coupled with a growing network of start-ups, are likely to continue to lure tenants to downtown Baltimore.
Images courtesy of Greater Baltimore Committee, The Bozzuto Group