And then there was one. For now, anyway.
Nine months ago, downtown Baltimore was projected as the future home of up to nine gleaming new office projects, from the 44-story centerpiece of downtown that Trammell Crow Co. planned to build at One Light Street to the Inner Harbor tower that Lazard Realty Inc. planned for the Pratt Street site of the old News American building.
But now Lazard, Trammell Crow and other developers ranging from Manekin Corp. to Gilbane Properties Inc. say the market is working to keep their empty sites empty for the time being.
Aside from the addition to the existing International Business Machines Corp.-T. Rowe Price Associates Inc. building at 100 E. Pratt St., the only new office construction downtown is at Commerce Place, a South Street tower overlooking The Block.
Tenants "now know that we're the real building and the others are years away," said Kevin McAndrews, head of the Baltimore office of The Harlan Co., a New York development firm that is building Commerce Place in partnership with Baltimore architecture firm RTKL Associates Inc. and Japanese construction and development giant Kajima Corp. "We were under construction before everything hit the fan."
The commercial real estate industry has indeed hit the fan, with both office leasing and office construction in Baltimore slowing dramatically from record levels reached locally in 1988.
Office leasing in metropolitan Baltimore fell 51 percent in the first half of the year, according to a study by W. C. Pinkard & Co. of Baltimore. Construction was also slow; at midyear, only the 375,000 square feet of the 100 E. Pratt St. addition were under construction, down from 775,000 square feet at the end of 1987.
While no one is saying that Baltimore's real estate market is as unhealthy as Houston's in the mid-1980s or Boston's in 1990, neither is Baltimore immune to national real estate trends.
"It's not a time to build speculative buildings," said Richard Alter, president of Manekin Corp., the Baltimore-based real estate development and commercial brokerage company.
"A siege mentality or, at least, a very conservative mentality, has set in. . . . Most people are trying to control their companies overhead-wise," he said.
But slow leasing is only one national trend slowing construction in downtown Baltimore.
Most developers say the biggest single problem delaying construction is that banks are cutting back on real estate loans. Banks have been rocked by loan losses and additions to loan-loss reserves because of bad real estate loans, forcing them into a more conservative stance.
The days when banks would lend a developer 100 percent of project costs are gone -- now developers report banks demanding up to 30 percent equity in their deals.
And the developers say banks are demanding that up to 60 percent of an office project be preleased -- that is, have signed contracts from future tenants -- before they will lend money for construction.
Many buildings that are fixtures of the Baltimore skyline couldn't have met such a standard, said Andrew J. A. Chriss, vice president for brokerage at Manekin, the Baltimore-based development and real estate brokerage firm. He said 250 W. Pratt St., 6 St. Paul Centre, St. Paul Plaza and the Redwood Tower, for example, couldn't have gotten financing under the standards that apply today.
Commerce Place couldn't have come anywhere near the new standards, either. RTKL has agreed to lease about 100,000 of the 450,000 square feet of the building, Mr. McAndrews said. But there are no other tenants signed up so far.
Mr. McAndrews said it's too early in the development process to expect much leasing -- the building won't be finished until the second quarter of 1992.
"Tenants commit when they have to," Mr. McAndrews said. He said the developers are involved in active discussions with a number of tenants but don't have any imminent commitments to announce.
The situation is pretty much the same at 100 E. Pratt St. The developers have a big commitment from their anchor tenants and joint venture partners, IBM and T. Rowe Price, but not much else. The difference is that the commitment from IBM and T. Rowe Price alone covers almost half of the 375,000-square-foot addition, scheduled to open late next year.
L. Bruce Matthai, a vice president at W. C. Pinkard & Co. who is in charge of leasing for the project, said IBM and T. Rowe have agreed to lease the space that will be created by expanding the existing 10 floors of the building.
"The climate clearly is more difficult," Mr. Matthai said. "But this project should do well in spite of the market. It's really going to be premier space."