Aon to stay downtown, shift 180 to new tower

Relocation to 500 E. Pratt St. stretches business district east

`Baltimore is really in a resurgence'

August 09, 2005|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Aon Corp. will keep its 180 Baltimore employees downtown in a deal to become the third anchor tenant in the Inner Harbor's newest office tower - the latest signal of an eastward expansion of the central business district.

The huge Chicago-based insurance brokerage said yesterday that it has capped a yearlong search for new quarters with plans to move its Baltimore office next winter to 500 E. Pratt St. The 275,000-square-foot building was completed last fall.

Aon, formerly Alexander & Alexander, has housed two subsidiaries, Aon Risk Services and Aon Consulting, in the Candler Building at 111 Market Place for the past 15 years.

"Baltimore is really in a resurgence right now," said Steve Trumble, senior vice president of Aon Consulting, a consulting brokerage firm that helps businesses manage human resource programs such as retirement, health and life insurance plans.

"We've been committed to the community and we'd like to stay downtown. I believe we're going to see growth and continued development in the Baltimore marketplace," Trumble said.

The leasing of the 500 E. Pratt St. building, owned by the Multi-Employer Property Trust, a commingled equity real estate fund, represents a shift of the downtown business district, real estate brokers said.

The eastward push has been spurred by development of new office, residential, retail and entertainment projects extending downtown activity beyond the confines of the Inner Harbor.

Mixed-use projects with office space have included Harbor East between Little Italy and Fells Point, and Canton Crossing in Canton, while the entertainment district has spread just north of the Inner Harbor to Power Plant Live.

"The [central business district] is beginning to slide east," said David Fields, a sales associate with CB Richard Ellis, the broker that represented Aon in the leasing deal. "That building ... [has] really been the newest, most prestigious address along Pratt Street. With the growth of the east side with Harbor East and into Canton, we're seeing a push toward that eastern address."

As the first few large tenants have moved into the East Pratt Street building, the spaces vacated by those tenants elsewhere in the business district have been quickly filled, another sign of strength in the downtown office market, said Mike Sullivan, a senior vice president with CB Richard Ellis in the Baltimore office.

Sullivan said he expected the space being vacated by Aon in the Candler Building will also be taken over by existing tenants.

Besides other areas of Baltimore, including Cross Keys and Canton, Aon looked in Hunt Valley, Glen Burnie and Columbia. The company was looking for updated quarters where teams of employees would be able to work more efficiently, in a large space on a couple of floors rather than being spread throughout a building.

The city helped seal the deal by agreeing to provide a tenant improvement loan at a below- market interest rate that the company can use to reduce the cost of office improvements, said M.J. "Jay" Brodie, president of Baltimore Development Corp. The BDC worked with Aon for more than a year to keep it in the city.

Brodie said he could not comment on the specific amount of the loan, which must be approved by the city's Board of Estimates.

"This is a company that will continue to grow, and 180 employees is a lot," Brodie said. "They've been a presence ... for a long time."

Reid Townsend, vice president of development for Trammell Crow, the building's developer, said the Pratt Street tower is ahead of schedule on leasing and is 80 percent occupied. Townsend said he expects full occupancy by the end of the year, even with an asking rent of $30 per square foot, a premium for downtown office rents.

He said tenants have been attracted by the location at the Inner Harbor with its attractions, restaurants and water views, access to the central business district and a high parking ratio of 2.5 parking spaces for every 1,000 square feet.

Aon will move in February into about 56,000 square feet of space on the building's sixth and seventh floors, and on part of the fifth floor. The company will join other multifloor, anchor tenants, Reznick Group, a Bethesda-based accounting firm, which became the first large tenant to move in, in January, and Saul Ewing LLP, a law firm.

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