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Eagle Realty Group Hires Cassidy Turley to Lease Queen City Square in Cincinnati

18 Mar 2014, 3:34 pm

By Adrian Maties, Associate Editor

Located in the heart of Cincinnati’s Central Business District, Queen City Square is the city’s premier business center, its newest and most prominent downtown development. It was constructed by Eagle Realty Group, a member of Western & Southern Financial Group, and now its owners have hired Cassidy Turley to find tenants for the remaining space in the $400 million complex.

Queen City Square offers 1 million square feet of Class A-plus office space. It consists of the the 41-story Great American Tower and the 17-story 303 Broadway. The complex is surrounded by important Cincinnati landmarks and offers numerous amenities such as parking, shops or restaurants.

The Great American Tower at Queen City Square is a trophy office building that towers over any other structure in the Cincinnati metro area. Not only is it downtown’s largest building, it is also the first ”green” office tower in the region, with a LEED Gold certification. It was constructed between 2008 and 2011, at a cost of $322 million. The state-of-the-art tower offers 800,000 square feet of space. It currently serves as the headquarters of Great American Insurance. 303 Broadway at Queen City Square was completed in 2006. It has nearly 200,000 square feet of space.

Queen City Square’s tenant roster also includes Vorys, Sater, Seymour and Pease, Frost Brown Todd, Key Bank or Analytic Partners. According to a Cassidy Turley press release, the complex still has about 80,000 square feet of available space. Cassidy Turley Senior Vice President Scott Abernethy and Vice President Digger Daley will lead leasing efforts.

“We are extremely excited to be listing this signature asset,” Mr. Abernethy said in a statement for the press. “Queen City Square is unmatched in the region. The architecture, location and amenities immediately make a positive statement for any tenant in this facility.”

Photo credits: www.queencitysquare.com



UGN to Build $50M Plant in Monroe, Create 150 Jobs

10 Mar 2014, 8:47 pm

By Adrian Maties, Associate Editor

UGN Inc., a manufacturer and supplier of auto parts, last week announced plans to build a $50 million facility in Monroe, Ohio. Groundbreaking is scheduled to start next month, depending on the final approval of state and local incentives.

Last September, when UGN announced it had narrowed down the list to two potential locations, Ohio and Indiana, the cost of the project was set at $25 million. Since then, UGN has decided to double its investment and to choose Ohio as the home of its new facility.

“JobsOhio’s aggressive approach and Gov. John Kasich’s personal involvement were major deciding factors,” Peter Anthony, CEO of UGN, said in a statement for the press. “They do a nice job of helping business leaders explore the possibility of working in the state.”

Plans call for the construction of a 206,400-square-foot auto parts manufacturing plant. UGN also said there is room to expand by at least an additional 150,000 square feet. When finished, it will create 150 permanent jobs and generate more than $7 million annually in wages and benefits. Positions in the new plant will be added in phases.

UGN will manufacture new carpet and underfloor technologies at the Monroe plant. The company said that these products are being made in the United States for the first time ever. Beginning in 2015, they will be installed in Japanese-produced automobiles. In the past two years, UGN has increased its sales by more than 50 percent. The company has 1,500 employees at six facilities in the United States and one in Mexico.

“This new plant further strengthens our position as a world-class manufacturer,” Anthony declared. “We look forward to being a part of the community in Monroe.”

Gov. Kasich issued a statement last week following UGN’s announcement. “This is just great news for the people of Monroe and reinforces the important role that Ohio continues to play in the auto industry. It’s great that the company found the team at JobsOhio to be helpful to them and, more important, great news for the 150 families who will be receiving new jobs at UGN,” he said.

Photo of UGN’s facility in Somerset, Ky. Credit: UGN Inc.



Octal Leases 130,000 SF of Industrial Space in West Chester, Opens First Plant in North America

3 Mar 2014, 10:07 pm

By Adrian Maties, Associate Editor

OCTAL, a world leader in polyethylene terephthalate (PET) resin and integrated PET sheet manufacturing, is expanding its operations with the opening of its first plant in North America. The Muscat, Oman-based company recently signed a lease for 130,720 square feet of space in the Greater Cincinnati area.

The new plant is located just 20 miles north of Cincinnati, at 5399 E. Provident Drive in West Chester. The office and warehouse property is part of Duke Realty’s World Park industrial development. Other tenants in the park include Totes Isotoner and TradeGlobal.

Cushman & Wakefield Inc. worked together with Cincinnati Commercial Realtors, a  C&W Alliance firm, to represent OCTAL. The team that brokered the deal included Cushman & Wakefield’s Mark Collins and Dean Collins, as well as Josh Young and Si Pitstick of Cincinnati Commercial Realtors.

“This was a six- to eight-month process of performing the proper studies and analyzing which markets made the most sense for OCTAL to place its first North American plant,” Mark Collins said. “We worked very closely with our alliance firm partners at Cincinnati Commercial Realtors to find the right mix of location, incentives and opportunity for OCTAL. This was a collaboration at every phase of the process, and that’s important when you’re dealing with an important, international client who is new to the market.”

OCTAL was formed in 2006, but it managed to quickly become the world’s largest PET sheet producer and the largest PET resin producer in the Middle East. At its facility in West Chester, the company will focus on converting post-industrial PET flake and resin into reusable rPET Sheet. The Cincinnati Business Courier reported that between 25 and 50 people will be employed at the new plant.

“We performed an in-depth site analysis to determine the optimal location for OCTAL’s long-term growth plan,” Mark Collins said. “They are a successful company that will bring jobs and investment into the area.”

Photo credits: OCTAL



URS Capital Partners Sells Two Cincinnati-Area Apartments

25 Feb 2014, 2:22 pm

By Adrian Maties, Associate Editor

URS Capital Partners, a real estate investment company based in Huntington, N.Y., completed the sale of two multifamily properties in the Cincinnati area at the end of January. The two properties are the Westshore Apartments, in Covington, and the Incline Apartments in Cincinnati’s Incline District.

The Westshore Apartments, formerly known as Harbour House, is a Class B apartment building with 37 units. URS Capital Partners acquired the property in October 2011.

“Due to the property’s positive attributes, including its amazing views and proximity to downtown Cincinnati, we saw the opportunity to buy the property well, implement a strategic upgrade plan and rebrand the property to greatly improve cash flow and value,” said Christopher and Lisa Urso, partners of URS Capital Partners, in a statement for the press.

URS said the upgrade was a success and that it was able to increase average rents by 10 to 15 percent throughout the property. Although it did not disclose the price of the transaction, URS said the asset was sold to a local investor at a 7.5 percent cap rate. At the time of the sale, the apartment building was 95 percent occupied. The Westshore Apartments generated an unleveraged 21 percent internal rate of return with a two-year hold period.

The Incline Apartments is a 40-unit Class C apartment complex. URS Capital Partners purchased the property out of foreclosure in November 2011. At that time, it was 80 percent vacant. URS Capital Partners renovated the Incline Apartments. The property, also sold for an undisclosed price, generated an unleveraged 16 percent IRR.

“As a result of the timely execution of our strategic plan, we allowed our investors to enjoy healthy unlevered cash-on-cash returns during uncertain economic times,” said Christopher Urso.

URS Capital Partners plans to acquire additional multifamily properties in 2014. The company will focus primarily on Class B and C assets. According to Marcus & Millichap, small private buyers are searching for these types of assets and they’re bringing new capital to the market, increasing the investment activity in the Cincinnati metro area. At the end of 2013, cap rates for Class B and C properties started in the low-8 and low-9 percent range, respectively.

Photo credits: URS Capital Partners



Procter & Gamble Selling Sycamore Building Downtown

18 Feb 2014, 4:54 am

By Adrian Maties, Associate Editor

Another high-rise building in Cincinnati’s CBD is on the market. Last week, I wrote about the Garfield Tower, an apartment building listed for sale by CBRE Group Inc. Now, Procter & Gamble is selling its office property at 299 E. Sixth St.

The Sycamore Building, as it is known, was constructed in 1915. It is a 10.5-story building, standing 142 feet tall. The property offers approximately 110,000 square feet of rentable space. Its location in the heart of the CBD places the Sycamore Building close to many hotels, restaurants, parking facilities and other important amenities.

According to PropertyShark.com, Procter & Gamble acquired the building in 2007 for $6.8 million. The total market value of the property is now $8 million, with the building valued at $6.3 million. The Sycamore Building is being marketed for sale by David Ottenjohn and Rusty Myers, executive vice presidents at Jones Lang LaSalle Inc. The sale price is set at $6.5 million, or about $59 per rentable square foot.

Right now, the property is occupied by Procter & Gamble, as well as Cintrifuse and the Port of Greater Cincinnati Development Authority. The Cincinnati Enquirer reports that the tenants will vacate the building in late November. Procter & Gamble spokesman Bryan McCleary told the Enquirer that the multinational consumer goods company plans to move about 200 people from the building to its two larger sites in downtown Cincinnati. The Sycamore Building will be available for occupancy starting this December.

CBRE reports that office building sales in the Cincinnati area picked up at the end of 2013 as investor interest increased. Out-of-state investors see Cincinnati as an attractive and stable place to allocate their investments.

The area’s overall vacancy rate decreased in fourth quarter 2013, from 22.6 to 22.3 percent, with the CBD remaining flat at 20.1 percent. Meanwhile, office rents increased from $19.64 to $19.73 per square foot. In the CBD, rents increased from $20.74 to $20.98 per square foot.

Photo credits: http://www.sycamorebuilding299.com
Charts courtesy of CBRE.


Garfield Tower in CBD Goes Up for Sale

11 Feb 2014, 2:26 am

By Adrian Maties, Associate Editor

A Cincinnati apartment tower located in the heart of the city’s Central Business District is now for sale. CBRE has listed the property but did not disclose a sales price.

Cincinnati’s Garfield Tower is located on a 0.37-acre site at 111 Garfield Place, within walking distance of Great American Ballpark, Paul Brown Stadium and the headquarters of some important companies, including Procter & Gamble and The Kroger Co. It was constructed in 1969 and consists of a 16-story high-rise residential tower and an attached two-story commercial building, the home of the Cincinnati Shakespeare Co. The commercial building is included in the sale.

Garfield Tower has about 102,600 square feet of residential space and about 25,000 square feet of commercial space. It offers 160 studio and one-bedroom apartments and includes such amenities as a fitness center, indoor heated rooftop pool and laundry facilities. The units have an average size of 651 square feet. They were converted to individual electric heating and cooling Island Aire systems between 2011 and 2013. According to the Garfield Tower website, rents in the building range between $780 and $920 per month.

Propertyshark.com lists the owner of Garfield Tower as Garfield Associates LLC. The property was last sold on June 19, 2003, for $5.7 million, according to the site. It sets the current market value of the tower at $3.7 million.

Marcus & Millichap said in its 2014 annual report for the Cincinnati area that urban development is reviving the local economy, boosting employment and creating new apartment demand. The commercial real estate brokerage firm expects the pool of buyers targeting apartment assets in the area to expand this year, as capital remains plentiful. It also said that larger properties of 150-plus units will remain most sought after, generating multiple bids from well-capitalized buyers.

Photo credits: CBRE
Charts courtesy of Marcus & Millichap


$500M Middletown Energy Center to Be Top Gas Power Plant

4 Feb 2014, 6:36 am

By Adrian Maties, Associate Editor

The city of Middletown, in Butler County, will be home to one of the most efficient natural gas-fired power plants in the United States. St. Augustine, Fla.-based NTE Energy announced last week its plans to develop, own and operate the power plant, which is expected to provide numerous benefits to the city, county and state economies. The massive project represents an investment of more than 500 million.

The plant will be called the Middletown Energy Center. It will use a Mitsubishi Power Systems Americas (MPSA) M501JAC advanced combustion turbine in combined cycle configuration and will generate approximately 500 MW of low-cost electric power, enough to supply 400,000 homes. According to NTE Solutions, the plant will be fueled by clean-burning natural gas, allowing for greater operating efficiencies and as much as 60 percent less emissions than conventional fuel.

NTE Solutions has begun permit applications and hopes to start work on the project in 2015. The Middletown Energy Center is expected to become fully operational in 2018. During the three-year construction period, the project will create 300 to 400 construction jobs, most of them to be filled by the members of skilled trade unions.  Once finished, the Middletown Energy Center will employ  25 to 30 full-time workers. Most of them are expected to come from the local workforce.

“As the energy landscape continues to change, the need for affordable, cleaner base load generation is upon us,” said Seth Shortlidge, president of NTE Energy, in a statement for the press. “NTE Energy looks forward to working with the Middletown community in developing one of the cleanest, most efficient and most reliable sources to fulfill this growing demand.”

Photo credits: www.middletownenergycenter.com



Port Authority Receives $400,000 Grant from Duke Energy to Revitalize Cincinnati Neighborhoods

28 Jan 2014, 5:11 am

By Adrian Maties, Associate Editor

Duke Energy, the largest electric power holding company in the United States, recently awarded a $400,000 grant to the Port of Greater Cincinnati Development Authority to help redevelop the Bond Hill, Roselawn and Queensgate areas. The money will be used to create development-ready sites that will ultimately bring new investment from industrial and logistics companies, breathing new life into the Cincinnati neighborhoods.

On Jan. 14, Laura Brunner, president & CEO of the Port Authority, received the check from Jim Henning, president of Duke Energy Ohio & Kentucky. The ceremony was located in Cincinnati’s Roselawn neighborhood, at TechSolve II, a Port Authority site currently undergoing redevelopment.

The Port Authority purchased the 13-acre site last year, after receiving funding from the city. It started the redevelopment by demolishing most of the vacant and blighted structures located on the different parcels that make up the site. Recently, the Port Authority received approval to expand TechSolve Business Park to the site, creating TechSolve II.

“Returning sites to productive use is essential to revitalizing Greater Cincinnati’s communities and building a stronger regional economy,” Jim Henning said in a statement for the press. Mayor John Cranley also thinks improving neighborhoods is an important strategy to attract new businesses and residents to the area. He said the city of Cincinnati ”is committed” to the TechSolve project, adding that ”we will be successful here.”

Another, larger site is also undergoing redevelopment near the TechSolve II park. The Port Authority recently finished the demolition of a 350,000-square-foot shopping center there. The entire project is expected to cost around $80 million and calls for a high-impact, urban-style commercial development of the 25-acre site.

In Queensgate, the Port Authority plans to develop a large industrial park through the modernization of real estate and transportation assets. Once an important manufacturing center, the area fell onto hard times in the 20th century. Now, it is plagued by contaminated sites, aged buildings and inefficient transportation. The Port Authority said the area’s re-industrialization will require multiple stages of evaluation and execution.

“We are pleased that Duke Energy recognizes the redevelopment potential in Bond Hill, Roselawn and Queensgate. This investment will go a long way to unlocking that potential, creating jobs and bringing new energy to our neighborhoods,” said Jeff McElravy, interim director for the city of Cincinnati’s Department of Trade and Development. “Now, with the help of Duke Energy and other community partners, we will begin to see a future of new productivity and value,” Brunner added.



Demand for Greater Cincinnati Industrial Space Strongest Since 2005

21 Jan 2014, 3:53 am

By Adrian Maties, Associate Editor

2013 was an excellent year for the Cincinnati industrial market. As companies snatched up more and more space, rents increased and vacancies dropped, reaching pre-recession levels.

In the third quarter, the overall industrial vacancy rate in the Greater Cincinnati area dropped below 7 percent for the first time since 2007. And the market continued to perform very well in the final quarter of the year, as well. Cassidy Turley reports that more than 615,000 square feet of space was absorbed in the fourth quarter, making it the 10th consecutive quarter of positive net absorption.

“Demand for industrial space across Greater Cincinnati was impressive throughout 2013,” said Jarrett Hicks, senior research analyst for Cassidy Turley’s Cincinnati office, in a statement for the press. “Overall net absorption totaled nearly 5.2 million square feet for 2013, signifying the highest level of demand since 2005.”

The overall vacancy rate in the region finished the year at 6.35 percent, compared to 6.55 percent in the third quarter, due primarily to Class B bulk warehouse and freestanding leases in the Northwest submarket. Overall bulk vacancy dropped to 7.1 percent in the fourth quarter, from 7.7 percent in the third quarter. Northern Kentucky continues to have a historically low bulk vacancy rate, currently standing below 2 percent. Freestanding space is also in short supply, with a 5.4 percent vacancy at the end of the year. The office/warehouse market experienced negative absorption in the fourth quarter, but three of Greater Cincinnati’s four submarkets showed slight positive absorption. The overall average asking rent stands at $3.63 per square foot.

According to Cassidy Turley, only three projects totaling 215,000 square feet were delivered in Greater Cincinnati in the fourth quarter, with almost 2.2 million square feet of space still under construction. The high demand for space will lead to a further decline in vacancy, which could then result in an increase in industrial construction in the region in 2014.

Charts courtesy of Cassidy Turley.



Cincinnati Seeks Brownfield Fund Grant for Brewery X Redevelopment Project

13 Jan 2014, 2:58 pm

By Adrian Maties, Associate Editor

Cincinnati Beer Week is less than a month away. It’s scheduled to start on Feb. 6, but real beer fans will be able to get into the spirit of the event even sooner. On Jan. 27, a public meeting will be held at The Brew House to discuss the city of Cincinnati’s application for a grant from the  Brownfield Fund for the Brewery X Redevelopment Project. The project’s goal is to turn a dilapidated historic building close to downtown Cincinnati into a brewery with a tap room and an outdoor beer garden. The application is available for review at the Walnut Hills Branch of the Public Library of Cincinnati and Hamilton County.

The historic building is located at 1430 Martin Drive, in the 180-acre Eden Park, one of the most popular parks in Cincinnati. It was constructed between 1889 and 1894 and served as a pump station, moving water from the East Reservoir to downtown’s growing suburbs. It was renovated and in 1939 reopened as the new home for the city’s Central Fire Alarm System and the Cincinnati Police. The Pump Station continued to operate as the Central Dispatch for the Cincinnati Police and Fire Departments until 1988 and as a backup for 911 until late 2004. It was listed in the National Register of Historic Places on March 3, 1980.

The city of Cincinnati has owned the building since it was constructed and will continue to own it during the the implementation of the Clean Ohio grant. Brewery X L.L.C. has signed a long-term lease for the property. The company will invest approximately $4 million in the project and plans to buy the building in the future.

Although dilapidated, the building is still structurally sound. The redevelopment calls for the  complete gutting of the interior and replacement of the roof and windows, as well as the removal of asbestos and lead paint. The developers requested $736,520 from the Clean Ohio Assistance Fund to perform asbestos abatement and $490,380 from the Brownfield Revolving Loan Fund to perform the lead paint abatement. Work is expected to start as soon as the funding is approved.

Brewery X is expected to open in mid-2015. It will create at least 13 full-time jobs. The average hourly wage will be $12.94 within the first three years of operation.

Photo credits: The City of Cincinnati







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