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D.C. developer a forerunner of city's office condo market
Baltimore Business Journal - November 17, 2006
Staff
The former Odd Fellows building along Cathedral Street in downtown Baltimore is going condo, and depending on its success, the project could prompt other developers to follow suit.
Developer Farhad Nasseri, owner of Farhad Nasseri Development Inc. in Washington, D.C., bought the 56,122-square-foot building at 300 Cathedral Street in November 2004 for about $3 million. He plans to market the five-story building as an office condominium, with prices starting at $250 a square foot.
Industry experts say Nasseri might be proposing the right thing at the right time, just as the demand for office space is increasing, rents are rising, and some companies are giving more thought to owning their own office spaces to eliminate rent as a variable in their budgets.
Corridor Reznick Senior Vice President John Hamilton, who is marketing the site, said the project should give smaller firms a wider array of options to locate their offices in the city.
"There's just no other opportunity for a small- or medium-sized business to buy anything here, anywhere," Hamilton said. "The owner-developer, he's got a lot of guts."
"I give a lot of credit to those guys, especially in the city, because it hasn't really been done before," said Terri Harrington, a broker with the Shapiro Co. not connected with the deal.
Cathedral Place, which will include a 15-space underground parking lot and a new mechanical system, could be ready for occupancy in the first quarter. The building sits at the corner of Cathedral and Saratoga streets, across Cathedral Street from the Old St. Paul's Parish. Once the home to the Odd Fellows fraternal organization, it later hosted the USO and was then converted into an office building.
Harrington said a rise in the number of buildings being converted from offices to hotels and residential buildings has diminished the amount of available office space in the city and forced smaller tenants to find new offices.
The vacancy rate in Baltimore City is about 13.31 percent for Class B office space and about 9.7 percent for B + space. Many real estate experts believe a vacancy rate below 10 percent is a sign of a strong market. Harrington said she believes those figures, combined with an asking rent that now hovers at around $17, could combine to make Nasseri's condominium project successful.
J. William Miller, senior vice president with NAI KLNB, said developers have launched office condominium projects in the Baltimore suburbs to varying degrees of success. Columbia and White Marsh, he said, have been stronger markets for that type of product than in places like Hunt Valley.
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