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Out-of-market buyers continue to flock to Downtown Baltimore's office market.
California-based Hertz Investment Group closed its purchase of the Wells Fargo Tower for $36.8M on March 29, its first buy in the city. It went under contract with seller CW Capital on Dec. 15, but an air rights issue held up the closing until recently. Natixis provided the senior loan on the deal.
At 106 East Baltimore St., three blocks north of the city's most valuable drag for office buildings along Pratt Street, the 378K SF tower is 67% occupied after undergoing recent renovations to its lobby and water systems. Hertz plans at least $1M of further work, according to Chief Investment Officer Jim Ingram.
The improvements, mainly to the lobby and common areas, are the only plans to boost occupancy Hertz has been able to make before closing.
"Buying the building from CW Capital, we didn’t have the latitude to visit with new prospective tenants or the leasing broker, so now that we own the building, we’ll be doing that literally every day,” Ingram said.
Hertz is not done in the city, either — the company prefers to hold at least 1M SF of assets in any city where it has a presence, according to Ingram. It began its interest in Baltimore four years ago.
"We had made offers on a lot of assets in Baltimore — we like what we see there," Ingram said. "We see, based on all the new development in the Inner Harbor, such as the Four Seasons and all of that retail, that we like all the fundamentals.”
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