Miller leasing to tackle new H&S office tower

Real estate company faces a major task finding big tenants

January 05, 2001|By Meredith Cohn | Meredith Cohn,SUN STAFF

Several downtown Baltimore developers have plans to build new office towers, but finding big tenants to fill them has proven difficult.

H&S Properties Development Corp. is going with who it knows to bring them those elusive tenants. The company has hired Miller Corporate Real Estate Services LLC to lease its planned 650,000-square- foot Class A office tower in Inner Harbor East - the developer's largest office undertaking and potentially one of the biggest buildings downtown.

Miller, better known for rehabilitating older city buildings than leasing top-tier space, has developed a relationship with H&S.

"They keep bringing us tenants," said Michael Beatty, vice president of development for H&S, explaining the company's choice.

Miller has worked with H&S on two other office projects in Inner Harbor East, which are fully leased with tenants, including Sylvan Learning Systems and Fidelity & Guaranty Life Insurance Co.

At 170,000 square feet and 130,000 square feet, those buildings are substantially smaller than the proposed tower.

Beatty said he was confident enough that businesses would want the space - and Miller would be able to sign them on - that H&S isn't waiting for tenants before starting construction, as are the other developers downtown.

Miller, a 10-year-old company with 22 agents, has leased other buildings downtown, including its own office building at 31 Light St.

And the company's agents do have some experience in leasing or selling Class A office buildings, including the Redwood Tower and the Bank of America building at 100 S. Charles St.

Miller has also been hired to lease the office portion of a new development on Canton's waterfront by Cignal Corp.

Ira J. Miller, one of the company's principals, said he believes there is enough demand for another big, new office tower downtown.

However, the depth of the demand isn't clear, and large local companies haven't been clamoring for more space.

The softening economy also could take most businesses out of expansion mode and hamper the project.

At least two other office developers have been unsuccessful in landing large tenants to anchor their projects.

H&S' commitment to break ground in the spring will help the marketing effort, Miller said. But the towers will take up to two years to build, and companies are leery of committing to projects that haven't begun.

Miller said the commercial real estate market, booming for the last couple of years, remains strong.

"Whatever they've built there has leased up," Miller said about Inner Harbor East, which is south of the core financial district.

Further, he said, H&S has earned a reputation for following through by building two hotels - including the 31-story waterfront Marriott that opens next month - and two office buildings.

H&S and Miller say there are several companies interested in the building, mostly Maryland-based ones. They declined to be more specific. They expected to have a tenant lined up before breaking ground.

The Greater Baltimore Alliance, a regional business marketing group, is among organizations aiding the effort.

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