Verizon Pratt St. building is sold

Inner Harbor tower to get big renovation

November 21, 2006|By Lorraine Mirabella | Lorraine Mirabella,Sun reporter

The developers who acquired the Verizon building in Baltimore's Inner Harbor for more than $20 million plan to redevelop the 10-story tower with added first-floor restaurants and refurbished office space.

GF One East Pratt Street LLC, a jointly owned subsidiary of Griffith Properties LLC of Boston and Fremont Realty Group, acquired the office building Friday. The seller of the building in the prime Pratt Street corridor was Amstar Group LLC.

The building's sale price was not disclosed but sources close to the deal placed it in the lower $20 millions.

In announcing the purchase yesterday, a principal of Griffith said that more than a third of the building will be renovated into Class A office space, while more than 22,000 square feet in new shops, restaurants and cafes will be added to the first floor along Light and Pratt streets.

The purchaser also plans a new entrance, a renovated lobby and reconstructed plaza level that will be converted to office and retail space. The renovations, which include new elevators, should be complete in about a year.

Verizon, formerly C&P Telephone, has leased most of the 345,000-square-foot building for the past 25 years. Verizon will stay in 180,000 square feet of space under a new lease with the purchasers, said Brad Griffith, a principal of Griffith Properties, which invests in office buildings from Boston to Washington.

"This is professionally what I've done my entire real estate career, repositioning and reconstruction of office buildings," Griffith said. "This is a top-notch, as good a location as you could get in an East Coast city. We are going to completely reposition the building."

Four floors of office space will be renovated, he said.

"It's a large block of space, which is unusual to have in a building at this location, and the views are amazing," Griffith said.

Griffith's company bought the building, its first acquisition in Baltimore, with Fremont, a real estate private equity company with offices in San Francisco and New York.

The joint venture was able to purchase the building only after securing an option-to-buy from Verizon, which had held the option since becoming the building's primary tenant in 1980, Griffith said.

The seller, Amstar Group, had purchased the building in August 2005 for about $19 million, knowing that Verizon could sell its option-to-buy, said Robert A. Toomey Jr., a vice president at Amstar, a Denver private equity firm.

"We knew that was possible, and we hoped Verizon would not have exercised that option, but they did," Toomey said. "It's been a great transaction for Amstar and it will be a good transaction for Griffith."

Local headquarters

Verizon, which employs 10,000 in Maryland and has its local headquarters in the Pratt Street building, declined to comment on its decision to sell the option.

Sandra Arnette, a Verizon spokeswoman, said the company has had excess space in the building since a 2003 buyout. Some floors were vacant and the first-floor cafeteria has been closed for at least a year, she said.

"We've had floors that have been unoccupied in the building and now we had a chance that we could finally shed that space officially, and so that's what we did," Arnette said.

T. Courtenay Jenkins III, a senior vice president of Trammell Crow Co. in Baltimore, which is handling the leasing for the joint venture, said the newly redeveloped building would be like offering a new building on the market.

The building and retail plaza area take up one block on 1.7 acres bounded by East Pratt, Light, Charles and Camden streets, close to the city's convention center and waterfront amenities at the Inner Har- bor.

"Our hope is that tenants in the market, who would like to be on Pratt Street and have large space requirements, will find 1 East Pratt a great solution," Jenkins said.

Large floors

The 35,000-square-foot floors will be among the largest on Pratt Street, he said.

Successful leasing of 500 E. Pratt St., downtown's newest office building, showed there is strong interest from tenants that require large space, Jenkins said. He expects the space at 1 E. Pratt to be filled a year after the renovation is completed.

Sun reporter Stacey Hirsh contributed to this article.

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