The developer of Harborplace, MCB Real Estate, took steps to expand its Inner Harbor real estate holdings on Thursday when a representative submitted the high bid of $25 million in an auction sale for a 10-story office building at Pratt and Light streets.
The building that sold at auction was One East Pratt Street, a 356,000-square-foot building that opened in 1977. The auction was a foreclosure sale held on behalf of an MCB Real Estate affiliate that has held the mortgage on the property since last April.
The auction, by BSC America/Atlantic Auctions, was scheduled because the building’s owner, a Florida-based group, defaulted on a loan held by MCB OEP Noteholder, the MCB affiliate, and the lender was seeking to recoup the money owed by the borrower.
The Florida group, Banyan Street/Gap 1 East Pratt LLC, purchased the property in 2018 for $80.1 million. According to state land records, it has a phased-in assessed value of $62,042,500 as of July 1, 2023 and a phased-in assessed value of $64,201,300 as of July 1, 2024.
About a dozen spectators gathered for the auction near the steps of the Clarence M. Mitchell Jr. Courthouse on Calvert Street, but the only bid came from a representative for the lender. He submitted the $25 million bid, effectively acquiring the property for the lender.
According to Gephardt & Smith attorney Michael Nord, a substitute trustee at the auction, the sale must be ratified by the Circuit Court for Baltimore City before it becomes final. Nord said the ratification process involves advertising the transaction in a local newspaper for three weeks and could take up to two months beyond that. The buyer then has 30 days after the court ratification to complete the sale.
Auctioneer Bill Hudson described One East Pratt as a “showcase property” in downtown Baltimore. MCB managing partner P. David Bramble said before the sale that the occupancy rate for its commercial space is in the “high 70s.”
Assuming the transaction goes through as outlined by the trustee, One East Pratt Street, occupying more than 1.7 acres, will be the third major property controlled by MCB Real Estate near Baltimore’s Inner Harbor, along with the Harborplace pavilions and the former News American development site at 300 E. Pratt St.
The land beneath Harborplace is owned by the city but the two pavilions on the land are owned by an MCB affiliate, which has a long-term lease with the city. In October, MCB unveiled plans to raze the two pavilions and replace them with a $500 million mixed-used, multi-phase development containing two high-rise buildings with 900 to 1000 apartments, shops, restaurants, offices and public space.
As part of its project, MCB is seeking to control the paved park area known as McKeldin Square and make it part of an enlarged Harborplace development footprint. The site of the former McKeldin Fountain, McKeldin Square is a triangular parcel between the Harborplace pavilions and One East Pratt Street, roughly an acre in size.
The Baltimore City Council’s Economic and Community Development Committee will hold a public hearing on pending legislation related to the Harborplace project on Feb. 13 at 2 p.m. at City Hall, 100 Holliday St.
