Hines To Manage Baltimore Peninsula As Bank Seizes Megaproject's Undeveloped Sites

Baltimore's largest development is undergoing an ownership shake-up. 

Kevin Plank's Sagamore Ventures and Goldman Sachs, the longtime owners of the 235-acre Baltimore Peninsula, are handing over the undeveloped portion of the site to lender Bank OZK as their $66M loan comes due, the firms told Bisnow Wednesday. 

The partnership is retaining ownership of the 1.1M SF of mixed-use development built on the site over the last several years, and it is bringing on one of the world's largest real estate investors as the new asset manager: Hines. 

The contract of Baltimore Peninsula's previous asset manager, a joint venture of MAG Partners and MacFarlane Partners, is expiring at the end of the year, and MAG said in early November it would be exiting the partnership.

The loans that Sagamore Ventures and Goldman Sachs obtained from Bank OZK in late 2021 were also due to expire at the end of this year.

The partnership reached a deal with Bank OZK to extend the $189M loan on Baltimore Peninsula's completed first phase through 2028, allowing it to retain ownership of the developed buildings, a Sagamore spokesperson told Bisnow. 

But the $66M loan on the undeveloped land wasn't extended. The spokesperson said the parties had been in discussions for months about potential resolutions for that loan and ultimately decided handing the asset to the bank was the best way to allow development to continue on the site. 

Bank OZK declined to comment on the deal.

The bank said in the management comments portion of its third-quarter earnings release that it recognized a $20.9M charge-off on the Baltimore Peninsula land loan last quarter, reducing its carrying value to $45.2M.

And the bank said it was having discussions with the sponsor about how to “achieve the project's full potential.”

“We have a good working relationship with the sponsor, and we both would like the sponsor to remain engaged with the project,” Bank OZK executives wrote in October. 

While Sagamore is relinquishing ownership of the sites, it is continuing to have conversations about ways it can be involved in future phases of the development, the Sagamore spokesperson said.

Sagamore founder Kevin Plank, the founder and CEO of Under Armour, said he remains focused on leading the “comeback” of the apparel company, which is headquartered at Baltimore Peninsula. And while he remains invested in the property, he said the other partners “will take the lead in carrying forward the next chapters of Baltimore Peninsula’s development.”

“We’re thrilled to collaborate with Baltimore City and Bank OZK and welcome Hines into our coalition, whose vision and commitment will help shape this district into an extraordinary place to live, work, and build the future of Baltimore,” Plank said in a statement.  

Hines has been in talks to partner on future development, but no deal has been finalized on that front, the Sagamore spokesperson said. 

Based in Houston, Hines has $92B in assets under management across 30 countries. It doesn't have any previous investments in Baltimore listed on its website, but does own properties in Bethesda and Washington, D.C., where it developed the 2.5M SF CityCenterDC luxury district. 

Hines Senior Managing Director Andrew McGeorge said in a statement the firm is excited to take over as asset manager for a project that “represents a bold vision for the future of Baltimore.”

“We are committed to building on the strong foundation established during the first phase and driving continued success for the district,” McGeorge said.  

The developers began construction in 2019 on what was then called Port Covington. The since-rebranded project now includes over 450 apartments, 20% of which are affordable, 400K SF of office space, and ground-floor retail. The project also includes the Under Armour headquarters and 400 townhouses that were developed separately from the partnership. 

The project's office tenants include CFG Bank, PwC, Newmark and Ayers Saint Gross. Its retail has landed tenants like Ben & Jerry's, Jersey Mike's, Bar Vegan, Daily Grind and Rye Street Tavern from Clyde's Restaurant Group. Live-K Karaoke and Urbano Tex-Mex locations are slated to open early next year. 

More than 500 families live on the site, and more than 2,000 visitors come to the property on a daily basis, the developers' spokesperson said. 

But Sagamore and its partners have struggled to advance the next phases of the project in a difficult macroeconomic environment. MAG Partners CEO MaryAnne Gilmartin told Bisnow in August that due to demand and financing constraints, she was unsure about the ability to build the 14M SF of development ultimately planned on the site. 

Gilmartin said in August the team was shifting the uses envisioned for the site to meet market demand, including a potential partnership with a data center developer.

The Sagamore spokesperson said Wednesday the team has had discussions with various users but declined to share more specifics.