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BALTIMORE-Over the last six to nine months a shift has occurred in Baltimore: increasingly the city is being viewed in the same investment bucket as the Washington, DC area, according to Bo Cashman, a locally based broker for CB Richard Ellis. To be sure, Baltimore and Washington, DC have been seen as virtually married, with the stretch of acreage between them representing one long municipal corridor. What Cashman and other brokers are seeing though, is something different.

More institutional investors view a property in Baltimore as being supported by the same fundamentals as those in Washington. With prices per sf for offices nearly half that of Washington, DC in many cases Baltimore comes out ahead.

For instance, at the end of August a real estate company located in Edgewater, MD, acquired a Baltimore mixed-use office building, located at 1820 Lancaster St., for $9.3 million, a deal that was reported in GlobeSt.com. A 45,000-sf, five-story building that priced at $205 per sf, it became one of Baltimore’s highest trades. Yet despite the aggressive pricing, the buyer, the Brick Cos., still viewed it as a bargain compared to other cities in the Mid-Atlantic, especially Washington, DC where Downtown office buildings can be anywhere from $400 to $700 per sf.

Investment sales in Baltimore reflect these dynamics, Cashman says. “Year to date for total sales here has been $1.3 million, compared to $541 million for the total year of 2006.” There is roughly a 100 basis point to 120 basis point difference in higher yields for investors in Baltimore as well, he adds.

Cashman, though, is not inclined to think DC will suffer all that much from Baltimore’s growing lure to institutional investors. “Not everyone will think of Baltimore as being on the same par as Washington.” Those that do, however, are finding the price comparison hard to resist.

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