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Three Snapshots Of Baltimore’s Future


The future of Baltimore is urban-living values like mixed uses, mixed-income housing, and transportation. Perhaps we come to that conclusion because city dwellers were strongly represented at Bisnow's Next Big Thing event on Tuesday at the Four Seasons. (Then again, if a snowstorm can prevent suburban residents from making it Downtown, city folk may be destined to rule the world anyway.)

1) White and Blue Collars in One Building


Enterprise Homes CEO Chickie Grayson (whom we snapped with St. John Properties' Rick Williamson) would love to build mixed-income housing, removing the stigma from low-income buildings and creating diverse neighborhoods. It also means quality (a key word, she says) housing for nurses, teachers, police officers, and the like near their jobs. (It will come as a shock to some students that teachers don't actually live in school.) While government stimulus programs enabled affordable developers to stay busy building during the recession, she says, affordable financing rules don't encourage mixed-income properties. And though market rents in major cities may help mixed-income pencil out, Baltimore's rents don't.

2) Submarkets with Soul


Chesapeake Real Estate Group's Dick Manekin and Chickie agree that the city has to motivate Millennials and college students to stick around. Not only do they not want to be in the suburbs, they like a little grit, a little soul, and are colorblind, Dick says. "They aren't afraid" to live places their elders wouldn't, such as Station North and Hollins Market. (In the words of the great philosopher Willard Smith and his compatriot, DJ Jazzy Jeff, "Parents just don't understand.") What these younger folks (and a good number of Boomers) want is public transportation and walkable neighborhoods. And what they need is housing that suits their income, so Chesapeake is considering an 82-unit apartment building outside Fells Point with units that are two-thirds the size of luxury projects like Union Wharf.


He also says retail is important for such neighborhoods. Chesapeake and 28 Walker's Canton Crossing has found resounding success, and that's before Harris Teeter's pending spring opening, Dick says. He expects a coordinated plan for a connected public transportation system to emerge within 18 months, while the Red Line moves forward, eventually leading to the return of residential and retail to abandoned neighborhoods even beyond the University of Maryland.

3) Urban Values in Suburbia


Rick's company is bringing more mixed-use to the suburbs with one such project in Bowie, one in White Marsh, and three in Maple Lawn. St. John is working on Maple Lawn with master planner Greenebaum Enterprises, which started it as one of Maryland's first true mixed-use projects in the early '90s. Adding amenities to business parks is better for the community, he says, not the least by reducing commuting. Meanwhile, the ebb in St. John's occupancy (from 95% to 86% during the recession) is over. Gone are the calls from smaller tenants asking for rent relief or giving back space, he says. (Though they can call if they just wanna talk and gossip a little.)

What They're Doing Next...


Enterprise Homes is expanding from ground-up multifamily development to acquiring, refinancing, and rehabbing existing properties. Chickie also is cooking the idea of converting commercial properties to affordable housing in suburbs where the office market isn't strong, but existing jobs still create housing demand. Chesapeake is is an urban infill developer, but it also likes close-in suburbs like Towson, and Dick says it's also looking for the right deal to get involved in Frederick's livable, walkable, scalable, small-city vibe. And St. John is banking on the continued rise of cybersecurity spending even as the general defense budget shrinks. (The industry will continue to grow as more 12-year-olds learn how to hack top-secret defense files.) Rick says the company owns 4M SF around the airport, which will benefit from cybersecurity contractors starting to cluster there.


Since the recovery began in mid-2009, the US economy has grown 1.5% per year, compared to a 3.5% historical average (through expansions and contractions), says CohnReznick's Pat O'Keefe. Those making longer-term business decisions should be aware that growth could accelerate to 2.5%, but it won't return to its long-term average, weighed down by deficit reduction and Dodd-Frank regulations. Pat also thinks tapering of quantitative easing will begin in March and lead to gradually rising interest rates, which could impact investment in long-term assets like real estate.