Days ago, the editorial board of The Baltimore Sun, Maryland's largest general-circulation daily newspaper, published an article titled "Drop in downtown Baltimore real estate values not a crisis — yet," which comes immediately after we shined a spotlight on crashing office tower prices:
- Beginning Of CRE Firesale? Baltimore Office Tower Dumped At 63% Discount
- CRE Panic Hits Baltimore As Second Office Tower Dumped At 69% Discount
The op-ed attempts to downplay the CRE earthquake in the Inner Harbor business district, citing Maryland Comptroller Brooke Lierman, the state's chief tax collector, who said, "It's not time to panic."
However, CRE turmoil is underway after the recent firesales, and a wave of building owners are expected to file assessment appeals and unleash a "potential domino effect that continually diminishes the central business district's tax base and puts further strain on the commercial market," Michael L. Higgs, director of the State Department of Assessments and Taxation, told the Baltimore Business Journal in June.
Months before the CRE panic hit the Inner Harbor in June, we provided readers with an April note titled "Entire Downtown Is Effectively Dead:" Baltimore City Descends Further Into Turmoil -- laying out the downtown district was full of shuttered shops, and vacant office building.
Just a late night run at the great Baltimore City’s #InnerHarbor #SpringBreak vibes #SpringBreak2023 #Baltimore #Maryland #น้องวินอยากเป็นพี่วิน #TAEHYUNGxCELINE #SuccessionHBO #Succession #ChaguoSmartNaAirtel #Maryland #Taiwan #TikTok #SummerMMFF2023 #INVASION #Russia… pic.twitter.com/X36btbT65g— Daniel Barahona (@GlobalSETT) April 10, 2023
Some say hybrid and remote work killed the Inner Harbor economy. Still, it could be a combination of that, and companies no longer want any parts of the crime-ridden business district following progressive city leaders failing to enforce law and order. It's not our opinion; it's the businesses that are actively searching for new office space outside the city who have conveyed this to us.
Republican State Del. Nino Mangione from Baltimore County pointed out that the issues with CRE in the Inner Harbor stem from a mix of remote work and a surge in violent crime:
"Yes, we all understand the current challenges post-Covid with commercial real estate, however I believe this current spiral of downtown values is directly tied as well to the continued increase in violent crime in Baltimore. Many businesses are reluctant to locate in Baltimore because they do not feel their employees or property are safe. Very simply, unless and until citizens and businesses feel safe, these values will continue to decrease. The leadership of Baltimore needs to take crime seriously and take steps to end violent crime. This is their responsibility, and they need to implement harsher punishment policies dealing with violent crimes extending to juvenile crimes as well. We are too busy making excuses and failing to support police rather than punishing violent offenders. You cannot have a great city when violent crime remains unchecked."
Meanwhile, the editorial board hedges itself at the end by saying, "None of this is to suggest that falling downtown property values should be taken lightly." But wait a minute. They cited earlier in the op-ed a state official who said, "It's not time to panic." Confusing.
Perhaps the editorial board is trying to instill calm because the last thing Democratic Mayor Brandon Scott needs for the imploding metro area just north of the White House is another crisis.