The exterior of the Hotel Monaco Baltimore during a pre-opening… (Baltimore Sun photo by Karl…)
Office vacancies worsened, condos sat empty and development hit the brakes, but the recessionary bite out of downtown Baltimore's work force was a lot smaller last year than in 2008, a new report suggests.
Employers cut 790 jobs last year, compared with 14,000 jobs lost the year before, according to estimates prepared for the Downtown Partnership of Baltimore. The group, which plans to release its annual State of Downtown report Tuesday, measured economic activity in the one mile around Light and Pratt streets, which includes the west side, Inner Harbor and Harbor East as well as the central business district.
Kirby Fowler, president of the Downtown Partnership, said last year's jobs picture was better than he expected after the financial meltdown in fall 2008.
"The decrease was not as dramatic as we'd feared," he said.
The group used job estimates from Nielsen Claritas, a market-research firm that tracks employment nationwide. The Downtown Partnership's own survey of businesses suggests that the much-buffeted real estate sector took the biggest hit last year, followed by retail, food service and finance. But several sectors grew, including health care and education.
"2008 was a very, very difficult year, especially the last part of 2008," said Daraius Irani, director of applied economics at RESI, Towson University's consulting arm. "The last part of 2009 was ... the start of the recovery."
Irani said he went to a downtown steakhouse in early 2009 and again this year, and the difference was marked — from nearly empty to busy. "Activity is picking up," he said.
Still, 2009 was rough for real estate. Job loss helped increase the downtown office vacancy rate from 13 percent at the end of 2008 to 19 percent at the end of last year, the Downtown Partnership said. The other big vacancy driver was the completion last fall of a 24-story office tower in Harbor East. Legg Mason vacated 22 floors at 100 Light Street when it moved its headquarters to the new building.
The economy also reined in construction. About $536 million in development projects were completed last year, compared with almost $1.4 billion in 2008, the Downtown Partnership said. A variety of projects originally slated to be under way now are stuck in the planning phase, waiting for better times and more loan availability.
"A fair chunk of it — the better portion of it — is that they can't get financing," said Nan Rohrer, vice president of economic development and planning at the Downtown Partnership. "Those lending markets are very, very tight."
Economic woes did not stop four hotels from opening last year, including the 202-room Hotel Monaco Baltimore. That project transformed the former Baltimore & Ohio Railroad headquarters into an upscale spot for tourists and business travelers, with touches ranging from pet-friendly rooms to 37-inch flat-screen TVs.
Downtown's residential population remained basically flat at just under 40,000, the Downtown Partnership said. Nearly a quarter of city condos were empty, a sign of how hard the housing slump hit that part of the market. Vacancies were less common among apartments, the group said: About 7 percent of rental units were sitting empty. But the gap was enough to pinch landlords.
"Concessions are high," said Grant Montgomery, a vice president with Delta Associates, a research firm that follows the apartment market. "They're averaging a little more than a month's free rent on a year's lease."
There's no apartment glut, though, and few projects are being built now. Montgomery thinks apartment owners will be well-positioned to raise rents once jobs come back.
Downtown Baltimore's population is eighth highest among downtowns in the 25 largest metro areas, according to the Downtown Partnership, which relied on Nielsen Claritas data for the ranking. The city's downtown is also eighth for the number of households making more than $75,000.
But the city doesn't rank as well on employment. With just under 107,000 jobs, downtown Baltimore is 16th — higher than downtown Dallas but lower than downtown Cincinnati. Downtown Boston, which has about the same number of residents, has two-and-a-half times more jobs.
Baltimore's rankings haven't changed much in the past year. And downtown is still a sizable piece of the city's economy. Almost three in every 10 city jobs are based within a mile of Pratt and Light streets, the Downtown Partnership said.