1st Maryland cuts search for offices to 3 buildings Parent of 1st National to remain downtown

January 03, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

First Maryland Bancorp. has committed to keep its headquarters downtown and has narrowed its search for future offices to three buildings, a bank official confirmed yesterday.

The $10 billion banking company's focus comes as it nears a July 1997 expiration of a long-term lease commitment in the 22-story First Maryland Building, where it has been since 1972. That 25 S. Charles St. tower houses 700 First Maryland employees.

In addition to its existing quarters, First Maryland has received proposals from USF&G Corp. for space in the insurer's 35-story skyscraper and from the Manekin Corp., owner of a 25-story structure at 120 E. Baltimore St., sources said. A bank spokeswoman confirmed that three buildings are being considered, but declined to identify them.

"We're in the process of determining how the options we've identified work, both economically and functionally," said Bill Quinby, a senior managing director of Julien J. Studley Inc., the New York-based real estate firm that First Maryland has retained to assist in the search. "At this point, the bank is seriously considering both staying and moving."

First Maryland's lease expiration may be the largest of any downtown business in the next two years, a position that provides the parent of the First National Bank of Maryland considerable negotiating leverage, analysts say.

Earlier this year, First Maryland argued with Hallwood Realty Partners Ltd. Partnership, the Dallas-based owner of the First Maryland Building, over its roughly $5.6 million annual rent payments.

The Allied Irish PLC-owned bank, which occupies about 215,000 square feet -- or 60 percent -- of the First Maryland Building, claims its rental costs are far out of line with market rates.

Hallwood, however, initially had been limited in its efforts to lower First Maryland's rental rate because of a $54 million debt obligation resulting from its acquisition of the building in 1990, according to city records.

"We value the bank's tenancy, and we're doing all we can to accommodate their needs," said Richard D. Stilovich, a Hallwood regional director. "What it comes down to is an issue of image. They need to decide whether they want to pay the price to be in a glass-and-glitter type building. If their main goal is to save money, then I think they'll come our way."

Real estate analysts say all three buildings have attractive qualities.

Manekin's 120 E. Baltimore St. building, the former Bank of Baltimore headquarters, represents the newest of the three options. Space in the 327,000-square-foot tower will be available primarily because of Alex. Brown Inc.'s planned departure for the 30-story Commerce Place tower by March 1997. First Fidelity Bancorp. also shuttered its operation there and moved out of three floors in the wake of its buying the building's former namesake.

"In terms of age, location and floor size, we think this building represents a good alternative for them," said Andrew J. A. Chriss, a Manekin senior vice president.

In the case of the USF&G tower, First Maryland could probably obtain the most competitive rental rate, since the insurance giant took a $190 million charge last year to fulfill its lease commitment there.

USF&G's Inner Harbor tower became available roughly a year ago, when the company announced plans to abandon its downtown offices in favor of its 72-acre Mount Washington campus, which straddles the city-Baltimore County line.

However, that tower's relatively small floor plate of 14,000 square feet could be a liability to a bank accustomed to much larger floors, analysts said.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.