Legg Mason Inc. yesterday completed a deal to consolidate its downtown operations of more than 1,000 employees and relocate its corporate headquarters to the 35-story USF&G Tower.
Although the move to the 100 Light St. skyscraper from the green-tinted Inner Harbor building bearing its name and a 20-story building at Redwood and St. Paul streets is expected to save the investment firm a considerable amount on rent, Legg Mason's move is aimed primarily at increasing efficiency.
"We plan to pick up some efficiency by having everyone in one location," said Raymond A. "Chip" Mason, the company's chairman and chief executive. "And from a psychological perspective, it won't appear that there are two classes of employees."
Under a lease with USF&G Corp., Legg Mason will pay more than $60 million though 2009 for the top 17 floors of the insurer's office tower. The company intends to begin moving to the building, which will be renamed for Legg Mason, around April or May. USF&G, in turn, is consolidating its own operations at its 72-acre Mount Washington campus.
But Legg Mason's 255,000 square feet of office space in USF&G Tower may not be enough. With the protracted bull market on Wall Street, the company has been growing by a rate of 10 percent for the past several years, Mason said.
The city, which is buying Legg Mason's 7 E. Redwood St. building for $5.6 million, projects the company will have 1,367 employees downtown by 2003.
"If we continue to grow as we have, we'll run out of room shortly after we move in," Mason said. "But it's not something that's worrying us, because we believe we'll gain economies of scale."
The deal is expected to have a major impact on the downtown commercial real estate market. With much of USF&G's space occupied, rental rates are expected to rise on the remaining space.
"It has a huge impact because it injects 100,000 square feet of top quality space onto the market rather than 350,000," said Walter D. Pinkard Jr., president of Colliers Pinkard, the real estate firm that represented Legg Mason. "And it makes space available for companies that are growing internally, at a time when there's relatively little Class A space available."
Legg Mason began its search for a new headquarters earlier this year, after determining that neither the 28-story Legg Mason Tower, which is owned by Rouse, nor 7 E. Redwood St. could accommodate its growth.
"We won because we'll have everyone in one place," Mason said. "The city won because someone stood up and decided to stay downtown, and so this was something we felt needed to be done for the city."
Pub Date: 11/02/96