Financial services firm Morgan Stanley has bucked the trend of decreasing office footprints by adding about 46K SF at Baltimore's Harbor Point development.

Morgan Stanley previously occupied 196K SF at the development's Thames Street Wharf building, but under a lease renewal announced Monday by building owner Armada Hoffler, the firm has now agreed to lease 242K SF until 2035.

“Morgan Stanley’s extension and expansion continue to validate our strong belief that Harbor Point is the top destination for class A companies in the region,” Armada Hoffler President and CEO Louis Haddad said in a statement.

Thames Street Wharf, delivered in 2010, is an eight-story building with 275K SF of office and 1,400 SF of retail. Its office tenants also include Johns Hopkins Medicine International and Think|Stack.

Following the extension, Thames Street Wharf's occupancy increased to 100%, according to the owner. The average vacancy rate for office buildings in Baltimore hit roughly 17% in the third quarter of 2022, according to JLL.

For roughly the last two years, the city has experienced a net reduction in absorption. JLL's third-quarter market report attributed that decrease in absorption to firms moving to Class-A spaces while simultaneously taking less space.

This flight to quality has dominated Baltimore's office market as deals for Class-A space represented 76% of deals signed in the last quarter, according to a third-quarter market report by Cushman & Wakefield.

Morgan Stanley was already located at Harbor Point, one of the top office developments in Baltimore.

Firms such as T. Rowe Price and Franklin Templeton have recently relocated to the development, which has the capacity for up to 3M SF of mixed-use space on 27 acres of waterfront property, according to Armada Hoffler.