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Welcome to Harbor East
Harbor East is the new and evolving Baltimore neighborhood that is redefining city life and expanding the notion of the urban experience.
Situated on a spectacular stretch of waterfront just east of the Inner Harbor and just west of historic Fell’s Point, Harbor East is a place where residents, retailers, businesses and visitors collide, creating a vibrant and bustling epicenter.
Welcome to Harbor East – 12 square blocks of restaurants, boutiques, hotels, and harbor-side amazing.
Cool, busy, edgy, modern, chic . . . Harbor East is all of the above and more. Located east of Inner Harbor along the waterfront, Harbor East is one of Baltimore’s up-and-coming hot spots. Here, business people sit next to hipsters at the latest fusion restaurant. Independent films play at an art-house theater complete with a premium bar. Locally owned boutiques mingle with well-known, high-end storefronts. Luxury hotels and spas provide outstanding accommodations and welcome relaxation. If you like to be on the cutting edge with easy access to every amenity you might need, Harbor East is the place to stay.
The Recreation Pier hotel project in Fells Point will become an extension of the Under Armour Inc. brand and a tool for attracting people to the city.
That’s how Under Armour CEO Kevin Plank sees his $60 million investment in the conversion of the 100-year-old pier and head house into an “incredibly nice” 128-room hotel. Plank plans to celebrate the groundbreaking of the hotel during a ceremony Wednesday. Plank’s privately held real estate company, Sagamore Development Co. LLC, is developing the project, which is expected to be completed in fall 2016.
Sagamore acquired the property from the city in June for $3.4 million.
Plank said in an interview Monday the hotel is part of a strategy to provide Under Armour guests with a unique Baltimore experience. That will include allowing people to depart the Under Armour headquarters in Tide Point on an authentic Chesapeake Bay crab boat, voyage across the Inner Harbor and arrive in style at the hotel.
“We tell stories for a living — we tell great stories and we build products to support those stories,” Plank said. “When [visitors] come here, I want them to have a proper hotel to stay at. When they come and visit, I want them to see a proper campus. I want them to see unique things we have like the distillery.”
Although Plank considers the Four Seasons Hotel Baltimore to be a good option for visitors, the Recreation Pier project will “be different than a Four Seasons — it’ll be unique to the other properties and unique to Fells Point,” he said.
Plank said he is close to announcing who will run the hotel, adding it will be “a world-class operator that will elevate the city.”
Plank became interested in taking on the hotel project, he said, because he could see from his office that the pier was on the verge of collapsing into the harbor.
“I stared out my window [at the Recreation Pier] and it depressed me every day,” Plank said. “I said we should breathe some life into it.”
The plans for the hotel include building a first-floor pool on the edge of the pier; adding a restaurant and whiskey bar; and adding a boat launch where “people can come and tie their boats at and stay for the weekend.” Plank also plans to restore the building’s ballroom to its original grandeur.
Plank is not the first person to envision a revival for the pier. It was once owned by H&S Properties Development Inc., and developer J. Joseph Clarke was attached to the property since redevelopment ideas were first floated.
“Before we got involved, this thing was supposed to be like a Holiday Inn Express or a Garden Inn or something and I’m looking and going, ‘Why not make it great?’” Plank said. “The one thing I’ll tell you is I just want to do great things. I just want to be involved in projects that are great and build things that have people go ‘wow.’ One of my passions in life is I love blowing people’s minds.”
Previous developers struggled to find financing for the project because the pier needed so much work. A major piece of the pier’s restoration involved replacing the pilings that are driven underwater and into the harbor’s bed, an expensive undertaking that Plank said he had the resources to invest in.
“No one would’ve touched this investment, but because of my position at Under Armour, as CEO of Under Armour, I can build on things with a longer investment timeline than most people have,” Plank said. “It’s the same way we look at this — it’s a 10 to 12 year investment timeline but at the end of the day it’s going to be great.”
Bozzuto sells Union Wharf apartments in Fells Point after ‘intense’ bidding
Bozzuto Group has sold its swanky Union Wharf apartment project in Fells Point less than six months after putting it up for sale.
Bozzuto CEO Thomas S. Bozzuto confirmed the sale Tuesday, but said he couldn’t disclose the buyer or specify the price because of a confidentiality agreement. He described the buyer as a “professional manager of a pension fund” that his company has enjoyed a 20-year relationship with as an apartment manager and joint venture developer.
The company’s apartment management arm will continue to run the building and there will be no change in operations apparent to the residents of the 281-unit complex, Bozzuto said.
Although Bozzuto declined to speculate about whether the price paid for the $72 million project will break records for Baltimore apartment building sales, he indicated the sale terms likely will create a buzz among investors and developers. Competition for the 281-unit building was “intense,” Bozzuto said, adding it “proved that Baltimore is perceived by institutions across America as a viable community in which investments make a great deal of sense.”
“I was not an enthusiastic seller,” Bozzuto said. “We build our properties with the intention of holding them for a very long period of time. But our partner was desirous in their reasons for selling, we agreed, and in retrospect, it’s hard to complain about the outcome.”
Bozzuto’s equity partner in the development was Cigna (NYSE: CI), the Connecticut-based health insurance company.
Opened in mid-2013, Union Wharf was an instant success in both leasing and in the prices tenants were willing to pay for apartments. As a result, Union Wharf has been at the center of a narrative about demand for luxury properties in Baltimore among both tenants and developers.
Whole Foods’ new Harbor East store is going to be mammoth
Whole Foods Market is replacing its tiny Harbor East store on Fleet Street with a 50,000-square-foot store on South Central Avenue, significantly expanding its presence east of the Inner Harbor.
The new store at 711 S. Central Ave. will feature expanded cafe seating and a second-floor mezzanine. There will also be two outdoor seating areas along Lancaster Street — one on a second-floor mezzanine and the other on a first-floor patio.
Site work is expected to start on the new building later this year. The site is currently a vacant lot next to the H&S distribution center and the project is unlikely to be completed until at least 2017. Until the new store is completed, Whole Foods will remain open at 1001 Fleet St.
Scott Allshouse, Whole Foods’ mid-Atlantic regional president, called the store a “flagship” in a statement issued to the Baltimore Business Journal, indicating the store will have the latest in the company’s prepared food offerings and store designs.
“We see Baltimore as an incredible area of opportunity and are so pleased to grow along with development and the community as a whole,” Allshouse said.
The store will be similar in size to Whole Foods’ new store in Columbia, which has begun testing prepared-to-order foods with a new diner concept. Whole Foods occupies a cramped, 13,500-square-foot space in Harbor East that sharply limits the store’s prepared food offerings and cafe seating.
The location choice, inside Bozzuto Group’s planned 335-unit apartment and condominium project, will make the Whole Foods a waterfront store because there’s a canal that runs along Lancaster Street to the south. It will also eventually be a highly visible location because the city has committed to build a bridge spanning the canal to provide access to the 3 million-square-foot Harbor Point development under construction to the south.
Bozzuto Group is developing the site in a joint venture with Harbor East Developer H&S Properties Development Corp.
There’s been speculation that Austin, Texas-based Whole Foods (NASDAQ: WFM) would move ever since H&S Bakery announced it was moving its distribution center from the property one block north of the proposed Bozzuto-H&S Properties project. But the project became the more likely contender after the Greenbelt-based developer said it planned to open a grocery store in its new building.
Tim O’Donald, the president of Harbor East Management Group, noted that Whole Foods was among the neighborhood’s first tenants, opening as a Fresh Fields in 2002. O’Donald said in a statement that he was pleased the market has decided to expand and stay in the neighborhood.
“It is a testament to the community and to Baltimore as a whole that the company is committed to deepening its relationship with Harbor East and further investing in the city,” O’Donald said. “Whole Foods Market is often at the core of the most exciting developemnts in the country, and it is no different here in Harbor East.”
Harbor East Management said it is “currently evaluating options for the space.”
Hyatt Place opens in Harbor East, offering $95-a-night rooms
Baltimore’s newest hotel is open for business.
The 208-room Hyatt Place Baltimore Inner Harbor in Harbor East opened its doors on Thursday.
“We’ve got guests checking in tonight, and we’ve got a fairly busy weekend with the Army-Navy game,” said Ken Finkelstein, president of Bethesda-based Englewood LLC, the hotel’s developer.
The hotel is offering stays through March for less than $100 on Groupon. It’s part of a soft opening.
King rooms and double-queen rooms — normally $139 — are going for $95 on Groupon, and king specialty rooms are available for $129. More than 30 customers have already booked stays at the new hotel through Groupon, and there are a limited number of the deals available. Dates are available with the Groupon deal starting Dec. 14.
Hyatt Place is a contemporary hotel brand geared toward business travelers. Finkelstein said the Hyatt Place is offering discounted rates to spread the word about the hotel.
“It’s just increasing awareness. They want to go out through all sorts of different channels to let people know that the hotel is open and get people to try it out,” he said. “It’s a different product, a little more upscale. Once we get people in, we think they’ll really like it.”
Located at 511 S. Central Ave., the 150,000-square-foot Hyatt Place has an indoor pool, fitness center and green roofs. Each room has a 42-inch flat-screen television, free wireless internet and a sofa or sleeper sofa. The Groupon deal includes complimentary continental breakfast and a $10 dining credit per day.
Cava Mezze, Nando’s Peri-Peri and Jimmy John’s Gourmet Sandwiches are under construction on the first floor of the eight-story hotel and slated to open in February or March, Finkelstein said.
Union Wharf price pushes Baltimore apartment sales into D.C.’s orbit
There’s no question that the Bozzuto Group and its development partner, Cigna, set a Baltimore record in selling Union Wharf to J.P. Morgan Investment Management Inc. for $121.5 million.
The per-unit price of $432,384 was so high, it topped the most recent per-unit multifamily sale prices in Baltimore by nearly $200,000. So I looked to our closest neighboring city for some context in understanding where Baltimore multifamily sale prices could be headed.
Once I did some checking with a CoStar Group Inc. researcher on Washington, D.C., investment sales of apartment buildings, I found that the price for Union Wharf approaches some of the more recent buildings that have been selling in D.C. That’s a big milestone. Baltimore has historically been seen as a second-tier city for investments, but Bozzuto has raised the possibility that Baltimore’s multifamily assets can reach the heights of more competitive markets.
“I think that’s just so gratifying in a lot of respects,” said Owen Rouse, who directs capital markets at Manekin LLC. “How interesting is it that Baltimore is delivering a product that can command Washington prices? Forget for a moment about the geography. For now, it’s not about the geography.”
What Rouse means is it’s about the quality of the building. The waterfront location, the attention paid to design details and the location in one of the city’s hottest neighborhoods all combined to make it a hot property companies were willing to invest in.
Rouse added that J.P. Morgan is known for pursuing high-quality real estate assets, further underscoring the allure of Union Wharf. But he also cautioned that other apartment owners shouldn’t get too excited about the price, saying this level of investment probably won’t be seen again until another top-tier property goes on the market.
“You can say well, if you’re comparable to Washington, you’ve arrived,” Rouse said. “But how many of those do you have?”
Here’s a look at the recent prices paid for multifamily investments in both Baltimore and Washington. Thanks to CoStar for helping with the research.