10-story office building near Harborplace goes up for auction

A 10-story structure at Pratt and Light streets is the latest downtown office building to hit the auction block.

One East Pratt Street is the name of the building, and the auction is a foreclosure sale on behalf of the mortgage holder, an affiliate of MCB Real Estate.

BSC America/Atlantic Auctions is scheduled to conduct the sale on the steps in front of the Clarence M. Mitchell Jr. Courthouse, 100 N. Calvert St., on Jan. 25 at 2 p.m.

Opened in 1977, One East Pratt contains more than 356,000 square feet of office and retail space one block from Baltimore’s Inner Harbor promenade. It is located at the same intersection as the two Harborplace pavilions, which MCB has proposed to replace with a $500 million mixed-use development that would be carried out in phases.

According to state land records, the building’s owner is Banyan Street/Gap 1 East Pratt LLC, based in Florida. It purchased the property in 2018 for $80.1 million. The property occupies more than 1.7 acres and has a phased-in assessed value of $62,042,500 as of July 1, 2023 and $64,201,300 as of July 1, 2024.

According to a legal notice about the sale, the original loan for One East Pratt Street was held by the New York branch of Deutsche Bank AG and was assigned to an MCB affiliate, MCB OEP Noteholder, as of April 13, 2023, making it the mortgage holder for the property.

Since then, the legal notice states, the borrowers defaulted on their loan under the terms of the deed of trust and the secured party, the MCB affiliate, requested that the property be offered “for sale to the highest qualified bidder at a public auction.”  

P. David Bramble, the managing partner of MCB Real Estate, said one local publication reported last year that MCB had purchased the property and that the sale price was $55.1 million less than the sale price in 2018, but that report was not accurate.

Bramble explained that the property did not change hands in 2023, only the assignment of the mortgage. The original news report, which quoted “three sources familiar with the transaction,” created the impression that MCB had expanded its holdings around the Inner Harbor, and it was later picked up by other news outlets.

“I can confirm that an affiliate of MCB is the lender on the property,” Bramble said on Monday. “It’s right in the loan documents…We acquired the mortgage, not the building…We are foreclosing.”

Bramble said the foreclosure auction was requested because MCB, as the mortgage holder, is seeking to recoup money owed by the borrower. The property is being sold in “as is” condition and subject to all existing commercial leases. 

Tenants at One East Pratt Street include PNC Bank; Cushman & Wakefield; Gensler and the law firm of Tydings and Rosenberg. Kona Grill-Baltimore occupies space on the first level and there is room for a second restaurant with an entrance off Light Street, where Sullivan’s Steakhouse was. The property also includes a garage with parking space for more than 200 cars. Bramble said the occupancy rate for the commercial space is in the “high 70s.”

According to the auctioneer, a deposit of $1 million in the form of a certified check is required of all bidders at the time of the sale, and the deposit must be increased to 10 percent of the purchase price within three business days from the date of the sale. Settlement will be held in the law offices of Gebhardt & Smith LLP.

The Jan. 25 auction could have several possible outcomes:

First, the owner could pay what it owes and the sale could be called off or the owner could file for bankruptcy court protection and the auction would be cancelled.

Second, if the owner does not bring the loan current and a third party emerges as the highest qualified bidder, One East Pratt Street will change hands.

Third, there is a possibility that MCB will become the property’s owner, if Banyan does not pay what it owes and no one else submits a winning bid. Then MCB will control a third key downtown property, along with the Harborplace pavilions and the former News American property at 300 E. Pratt St.

One day before the auction, Bramble will take part in a community forum about MCB’s redevelopment plans for Harborplace. Billed as a “Harborplace Community Information Session with Councilman Eric Costello, David Bramble and Vaki Mawema” of Gensler, the lead architect on the project, the meeting will be held at the Maryland Science Center, 601 Light St., on Jan. 24 from 6:30 p.m. to 8:30 p.m.

The City Council’s Economic and Community Development Committee will hold a public hearing on three council bills related to the Harborplace redevelopment plan on Feb. 13 at 2 p.m. at City Hall.