Residents and businesses are moving to the Baltimore Peninsula. Here’s a first look.

Penelope Blackwell

Published on: April 27, 2023 2:13 PM EDT|Updated on: April 28, 2023 9:58 AM EDT

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Commercial, retail and residential spaces have opened at Baltimore Peninsula, the ambitious, 235-acre mixed-use development on the site of an old industrial port in South Baltimore’s Port Covington neighborhood.

The first few office tenants and residents have moved into three newly constructed buildings at the historically underutilized site, which neighbors several predominantly Black communities to its south.

MaryAnne Gilmartin, founder and CEO of MAG Partners, the lead developer, is not stopping there.

“We need Baltimore to be on everybody’s radar,” she said.

More than 800 townhomes, a large entertainment venue and plans to reconfigure major nearby roads and highways are also in the works for the multi-block project, spanning some 200 acres. Existing tenants there include City Garage, Sagamore Spirit Distillery and Rye Street Tavern.

Hotly contested due to its record-breaking tax increment financing package — which allows developers to use property taxes generated at the site to pay back bonds issued early on for public infrastructure needs — the $5.5 billion waterfront venture promises more than 14 million square feet of new construction upon its completion. City residents, housing activists and economic watchdog groups also have opposed the use of such a large incentive — City Council approved $660 million in tax increment financing funds in 2016 — given Baltimore’s other pressing and existing needs.

Baltimore could be on the hook to pay back the bond costs if developers fail to lease up the site, which has only landed two new office tenants so far. Between the first two residential buildings, 11 units have been leased.

The H. Chambers Company, a planning and design firm specializing in private clubs and hospitality, is the first tenant to occupy an office within the Rye Street Market business complex located at 2455 House St. The company signed on for about 9,000 square feet of space.

The building can accommodate smaller businesses with spaces around 25,000 square feet, but there are larger floor plans as well. The rooms are divided by glass walls and doors, and “the sun, the light and air is abundant in the all corners of the floor plate,” Gilmartin said.

Robert Hickman, board chair of the design firm, said the company looked all over the region for their sixth office location.

But it was the Baltimore Peninsula that offered a place that was “really special,” he said, including access to an outdoor balcony.

“We needed something that really brings the outdoors in. And we deal in the world of private clubs … it’s all about inside outside,” Hickman said.

CFG Bank has also signed on to lease about 100,000 square feet in Baltimore Peninsula. They plan to move in by the end of 2023.

By 2024, Gilmartin expects enough activity to get nearly 75% of the commercial space leased, she said.

Just across the courtyard are two mixed-use apartments buildings, Rye House and 250 Mission, where maritime-inspired units — with natural wood, and glass and steel finishings — are available. Other amenities include ample green spaces, co-working spaces and some Juliet balconies.

Ryan Watts, the general manager at real estate developer Bozzuto, said the leasing since early April amounts to 15% of the units at Rye House and 10% of the units at 250 Mission.

Of the 416 units at Rye House, 54 will be dedicated to households earning 80% of the area median income, or AMI, while another 35 will be dedicated to those earning 50% of the AMI.

Last year, New York-based MAG Partners and the San Francisco-based MacFarlane Partners took over the large-scale development, first pitched in 2016 by Under Armour founder Kevin Plank and his Sagamore Ventures development firm. Plank and his associates began buying up the land for the site about a decade ago. Since then, sales at the sportswear company have dropped, and the company has scaled back plans for its new Baltimore Peninsula offices.

In November, developers at MAG and the San Francisco-based MacFarlane Partners rebranded the development, changing the name to the Baltimore Peninsula from Port Covington. They said they hoped to turn a page on some of the project’s contentious history.

Sagamore Ventures still maintains a “major equity stake” in the project, and a new corporate headquarters for Under Armour is slated to open in the fourth quarter of 2024.

Gilmartin said the master plan allows for flexibility, and she envisions building a large entertainment or sports venue, as well as an accompanying hotel and conference center.

She also thinks the project’s scale and easy access to a major highway will make it attractive to the film industry.

“And so we are looking at ways the public sector could develop programs that will attract to that industry, because they’re really good jobs; they train the people both on the other side of the camera and behind the camera,” she said. “And they need the kind of space that our master plan is conducive for.”

Baltimore Banner reporter Hallie Miller contributed to this story.

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Baltimore Peninsula begins transformation from construction site to community

Baltimore Peninsula, the once-industrial South Baltimore waterfront that’s being redeveloped, has turned the corner from longtime construction site to emerging community.

The first phase of the 235-acre project south of Interstate 95 has nearly completed streets, landscaped courtyards and a park with a children’s playground underway. It’s made up of two apartment buildings, now 15% and 10% leased, the Roost hotel, an office building that will be half-filled by CFG Bank and another where 125-year-old design firm H. Chambers Co. moved with 30 workers.

“These are no longer stories or part of a great vision of Kevin Plank. They’re no longer lines on paper,” said MaryAnne Gilmartin, one of the developers and founder and CEO of New York-based MAG Partners. “They’re no longer part of a massive construction and infrastructure undertaking. This is a real place.”

Gilmartin’s firm, along with San Francisco-based MacFarlane Partners, took over the then-partially built project a year ago as lead developer and investor with owners Sagamore Ventures and Goldman Sachs. Plank, the founder of Under Armour who heads the Sagamore investment firm, spearheaded the project nearly a decade ago, buying up land for redevelopment.

Part of the land Plank acquired is being developed in a separate project across East Cromwell Street as a new global headquarters for the Baltimore-based athletic apparel brand. It’s slated to open in the last three months of next year, with 1,500 workers, a flagship retail store and a multipurpose field.

Gilmartin spoke about Baltimore Peninsula during a media tour Wednesday to offer an initial glimpse of new buildings since the first occupants moved in.

A handful of residents first moved in last month to the project’s midrise, upscale apartments. Workers for H. Chambers — the first commercial tenant — have settled into hybrid schedules in an office building with outdoor terraces and a fitness center.

The developers are working on signing street-level retailers, and a sign just went up on one building for a Roost extended stay hotel, expected to open this summer.

Gilmartin predicted that by the time Under Armour’s new corporate campus opens at the end of 2024, the apartments will be close to 90% leased, while the commercial portion will be between 70% to 75% leased.

Despite a difficult housing market, high interest rates and high office vacancies in parts of Baltimore, including downtown, Gilmartin said she has reason to be optimistic.

For one, she believes economic conditions will improve by next year. Demand for housing in Baltimore, she said, remains strong. And she sees opportunity in the office market that Baltimore Peninsula can tap into, especially in a post-pandemic work world where she believes more people will return to offices as part of hybrid schedules and where fewer office buildings will be able to be built.

Bob Hickman, chairman of H. Chambers, which has been in the city for more than a century, said Wednesday that the firm needed space suited to a hybrid remote and work-from-office schedule that would be inviting for employees. The firm looked in Towson, Columbia, Annapolis and Baltimore. Besides offering a central location for employees, Baltimore Peninsula offered a “forward thinking and inclusive” spot, he said.

“We needed a much more collaborative kind of space,” Hickman said. “We needed something that really brings the outdoors in.”

Gilmartin said she expects office users to be attracted from outside the city with offerings such as build-to-suit options and short-term leases, both of which can be hard to find, and more efficient space for those looking to downsize.

In many ways, this project allows the real estate community in Baltimore to redefine what it means to go to work every day,” she said.

Gilmartin also said she hopes to see Baltimore Peninsula connected to, rather than divided from, the rest of the city and said developers are working on a long-term plan with state and federal highway officials to come up with alternative configurations for the nearby ramps onto and off I-95.

Looking to the future, she said residents will continue to want homes in work-play-live environments, including Washington commuters who may work more days at home.

She believes the project will be well-suited to meet demand from Baltimore’s medical and research sectors as well as the film industry, which she said is recession-proof, offers good jobs and requires access to highways and large spaces.

“I think the film industry could have a place here at Baltimore Peninsula, and we’re exploring that,” she said.

And eventually she envisions building a large-scale entertainment or sports venue that would draw large numbers of people, one that might even justify a hotel and conference center.

“We need Baltimore to be on everybody’s radar,” Gilmartin said. And when it comes to businesses and residents looking to relocate, “we need it to be on the short list.”

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Baltimore Peninsula Developer Leans Into Flexible Office, Considers Building Entertainment Venue

As the 235-acre Baltimore Peninsula megaproject marches toward the completion of its most extensive building phase yet, the development team has embraced agility as a key to negotiating the obstacles working against the $5.5B project.

That flexibility is reflected in lead developer MAG Partners adopting measures like pre-built office space to boost leasing or potentially constructing a new entertainment venue that could draw visitors and spur hotel demand. 

“We tend to think about the possibilities and to know how to pivot and be nimble,” MAG Partners CEO MaryAnne Gilmartin said during a tour of the project Wednesday. “That really separates the mediocre from the good.”

As she walked through the waterfront development’s almost completed Chapter 1B portion, which totals nearly 1.1M SF of office, residential and retail, Gilmartin detailed how her team has responded to headwinds since taking over as lead developer roughly a year ago.

Baltimore’s sagging office market presented arguably the most significant challenge to the development, which includes a considerable amount of office space. 

The office market has gone through a tumultuous period as more companies have allowed employees to work from home. In the first quarter, Baltimore’s office market vacancy hit a new record high above 18% after leasing activity dropped about 50% from the fourth quarter, according to CBRE‘s Q1 market report.

With office leasing lagging in the market and MAG Partners set to deliver a glut of new space, the developer explored measures to boost the project’s attractiveness to more tenants. 

Those measures include offering short-term leases, designing a pre-built office pilot program, and potentially converting office to lab space in the wake of the plummeting demand for office space.

“It’s been slow, but the world is coming back, and we think … that hybrid work is here to stay,” Gilmartin said.

Bisnow/Adam Bednar

Space in Rye Street Market that may end up pre-built offices or even lab space.

MAG Partners has identified pre-built office space — a concept where the landlord builds out, partitions, carpets and readies the space for occupancy — as a sector with the potential to attract tenants amid the Baltimore office market’s struggles.

She said Baltimore’s office market comprises about 14M SF of Class-A and Class-B space. However, she estimated only 10K SF of pre-built product is available in Baltimore. 

MAG Partners plans to offer roughly 6K SF of pre-built office space in its Rye Street Market building, featuring designed units between 1,800 SF and 2,700 SF.    

“I’m doing it as a pilot that I think is going to be very popular,” Gilmartin said. 

MAG Partners also plans to offer tenants short-term leases of two to three years. Generally, the shortest lease offered on office space is five years, with 10-year leases the most common deals.

“The world is still evolving in the post-Covid condition,” she said. “We’re offering short-term leases, we are building out the space, which capital is precious today. So, the idea that a company not in the real estate business doesn’t have to get into the business of building their own space is also an enormous benefit.”

Most innovative approaches to boosting office leasing are confined to the Rye Street Market building, which landed Baltimore Peninsula’s first office lease when interior design and architecture firm Chambers signed a 10-year lease for roughly 9K SF of the building’s 228K SF of office space in September. 

Robert Hickman, Chambers’ board chairman, said the development team’s vision for Rye Street Market as a home for smaller and emerging businesses fits well with the firm’s goals.

Chambers Chairman of the Board Robert Hinkman stands outside his firm’s office at Rye Street Market.

“We don’t want to be a huge company. We want to be a niche company,” Hickman said.

Given the demand for lab space in Baltimore, Gilmartin said the development team is also “experimenting” with turning office space at Rye Street Market into lab space. However, she said, that doesn’t mean converting the building to wet lab space that requires substantial infrastructure investment. 

“It could be places for scientists and researchers to get together where they’re trying new technologies and innovations in the life science, space or bioscience space,” she said. “But we have the building here, and we’ve done the research, and we believe that we should dedicate a portion of this building to lab space.”

MAG Partners still needs to decide what the next construction phase will include once it has fully delivered Chapter 1B and various infrastructure and park projects by the end of this year.

Gilmartin said one possibility is to build a large public venue that attracts enough people to justify building a hotel and conference center on the property. 

“This idea of there being a large-scale entertainment venue available here, whether it’s sports, culture, entertainment, we have inbounds that suggest that if we thought we’d pull it off, meaning that we could have a meeting of the minds, we could build a large-scale venue,” Gilmartin said.

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