Looking for a home in a 100-year old former bank building a few blocks from Baltimore’s Inner Harbor? You might be in luck.
City Council members gave preliminary approval Tuesday to sell a 20-story, city-owned office tower on the corner of Light and Redwood streets, a move that comes as downtown Baltimore has struggled to hold down commercial tenants in the wake of the pandemic, and as officials have looked to foster a more residential community in the business district.
The property, 7 E. Redwood Street, was built in 1924 and currently houses offices for the city law department and health department, among other city and city-affiliated tenants, but an appraisal report issued earlier this month recommends the best use for the property is to convert its office space into new housing units.
The 184,000 square foot property was appraised in July at $10 million, according to the report commissioned by the Baltimore Development Corporation, a price tag the report says the property could draw after some minor improvements of around $100,000. Kim Clark, executive vice president for the Baltimore Development Corporation, said her organization has been approached about the property by several potential buyers and believes this is an advantageous time for the city to sell.
Authorization for the sale of the building received unanimous approval Tuesday from City Council’s Ways and Means committee, with one member absent. The city’s spending board and the full council still have to approve the authorization before the city could list the building. A spokesperson for Mayor Brandon Scott did not respond to request for comment on a potential sale of the property Tuesday afternoon. Since the property belongs to the city, it is currently exempt from property taxes but would be subject to them again under private ownership.
The move comes in a period of substantial flux for downtown Baltimore, as the neighborhood reckons with crime, disinvestment and the lingering changes wrought by the pandemic. With commercial real estate prices struggling around the country and more people shifting to remote work since the pandemic, there are indications that property values in downtown Baltimore may be in trouble. One office tower a few blocks from the Redwood building sold for $24 million in July, well below the $66 million it drew in 2015.
Still, some officials are optimistic about an increasingly residential future for downtown Baltimore. Councilman Eric Costello, whose district includes downtown Baltimore and who sponsored the legislation to authorize sale of the Redwood property, pointed to the growth of thousands of residential units in the downtown area thanks to a targeted city tax credit over the last decade.
Though apartment space currently accounts for “a fraction” of the office space in downtown Baltimore, Baltimore Development Corporation’s appraisal report points to growing demand for housing in the area and declining demand for office space.
Overall, vacancy in Baltimore’s business district has risen and fallen over the last decade, according to the report conducted by the real estate consultancy Lippman, Frizzell and Mitchell. The amount of un-leased space in the area surged to near 20% in the pandemic, peaking about six points higher than a recent low in 2013. Though vacancy has recovered somewhat in the last year, the report also notes that Baltimore’s business district has lost 2.5 million square feet of office space in the last 10 years, as demolitions and conversations to apartments have outpaced new supply.
Clark, with the Baltimore Development Corporation, said the Redwood building is in need of about $18 million in improvements over the next 10 years, a cost the city can’t afford to shoulder, but which a new owner could make in the same process of converting office spaces into apartments.
Still, “it is a brilliant building,” Clark said, pointing to some of the property’s architectural quirks, like rooftop fire hoses that date it to the era following the Great Baltimore Fire of 1904. The lobby of the building, a former bank, has ornate columns, a gilded ceiling and mezzanine and still houses the old bank’s vault, according to photos in the appraisal report.
“It’s a really interesting building,” Clark said. “We hope to get a lot of interest with it.”