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Hines Pays $150M for 6-Building Portfolio as Office Sales Pick Up Steam

13 Jul 2014, 3:01 pm

By Adrian Maties, Associate Editor

Halfway through 2014, it’s clear that office properties in Greater Cincinnati are selling like hotcakes. Multiple assets have changed hands as the recovering market attracts a growing number of institutional investors.

The second half of the year is off to a strong start. As the Cincinnati Business Courier reported last week, Duke Realty Corp. sold six of its office buildings in Greater Cincinnati to Hines Interests L.P. for more than $150 million. The portfolio includes the Towers of Kenwood in Sycamore Township and five buildings in Centre Pointe Office Park in West Chester Township. According to Butler County records, the five buildings in the Centre Pointe Office Park fetched $81.25 million. The 403,000-square-foot Towers of Kenwood office development sold for $69.2 million.

Improving fundamentals appear to be making Cincinnati-area office assets more attractive to investors. Due to limited development and high absorption, vacancies in the Cincinnati area are expected to continue to drop toward pre-recession levels. Average asking rents are also expected to climb to the highest levels since 2010. CBRE Group Inc. reports that office vacancy in Greater Cincinnati declined from 22.3 percent at the end of 2013 to 21.5 percent at the end of the second quarter. During that stretch, asking rents edged up from $18.57 to $18.80 per square foot.

The recent Hines acquisition followed a number of significant first-half deals, including Lone Star Funds’ $38.9 million acquisition of Executive Centre I, II and III in Springdale. And in Norwood, PBY Partners paid $34 million for the 811,670-square-foot, 10-building Central Parke Business Park Portfolio.

Last month, The Cincinnati Enquirer reported that Wessels Construction and Development Co. Inc. sold Gateway Center and Gateway Center West in downtown Covington, Ky., for $82.6 million. ARCP Acquisitions L.L.C., an affiliate of New York City-based American Realty Capital Properties Inc., is the new owner of the office buildings on Scott Boulevard and Madison Avenue, which offer about 440,000 square feet of rentable space between them, According to Wessels officials, the sale may be the largest real estate deal in Northern Kentucky history.

Photo credits: Duke Realty Corp.

Inland Real Estate Corp., PGGM Buy Phase I of Newport Pavilion

8 Jul 2014, 3:09 pm

By Adrian Maties, Associate Editor

Inland Real Estate Corporation is expending its presence in metropolitan Cincinnati. In a joint venture with PGGM, a Dutch pension fund advisor, the REIT has acquired the first phase of Newport Pavilion, a 471,800-square-foot grocery-anchored power center in Newport, Ky. The property changed hands for $43.3 million in cash.

Newport Pavilion is located within one mile of downtown Cincinnati. Phase one consists of 222,300 square feet of retail space. According to Inland Real Estate, it was 98% leased at the time of the sale, to retailers such as Kroger Marketplace, PetSmart, Famous Footwear or Chic-fil-A. The center also includes a separately-owned 134,500-square-foot Target store.

According to a recent report from Marcus & Millichap Real Estate Investment Services Inc., transaction volume in metropolitan Cincinnati’s multi-tenant retail sector has increased 50 percent over the past 12 months; the average price per square foot reached $165 at the end of the first quarter. The Inland Real Estate–PGGM joint venture paid about $195 per square foot for Newport Pavilion’s first phase.

The joint venture expects to buy the second phase of the project for about $23.8 million. Phase two includes 115,000 square feet of space that will be occupied by such retailers as Dick’s Sporting Goods, TJ Maxx and Buffalo Wild Wings. The acquisition is expected to close before the end of the year.

“Newport Pavilion is an outstanding addition to our necessity and value-based retail portfolio, representing best-in-class new power center development, with leading national retailers in a high-barrier-to-entry infill location,” said Mark Zalatoris, president & CEO of Inland Real Estate Corporation, in a statement.

“Our acquisition of this ‘Class A’ Kroger-anchored power center in Ohio’s largest metropolitan area enhances the geographic and tenant diversification of our portfolio, and represents an accretive re-deployment of proceeds from recent dispositions of non-core assets.”

Photo illustration: Inland Real Estate Corporation
Charts courtesy of Marcus & Millichap.

Milhaus Development Breaks Ground $13M M-F Project in Cincinnati’s Northside

30 Jun 2014, 4:15 pm

By Adrian Maties, Associate Editor

Milhaus Development started construction on the Gantry, a $13 million project expected to revitalize the former lumberyard and railroad depot in Cincinnati’s historic Northside neighborhood. It is the first new construction project of its size to be developed in the Northside community in many years.

Indianapolis-based Milhaus announced the project in July 2013. It was approved by the Cincinnati City Council in August and, on October 30, it received its name. Ground was broken last on June 24.

The project calls for the construction of three new buildings at the corner of Hamilton Avenue and Blue Rock Street, on the former Myron G. Johnson & Son Lumber Co. property. They will house 130 studio, one-, and two-bedroom rental units as well as 8,000 square feet of first-floor retail and restaurant space. The apartments will feature granite countertops, designer lighting, wood-style flooring and more. Monthly rents will range between $600 and $1,500.

Milhaus Development is the owner, developer, construction contractor and property manager. It designed the project with input from local residents so that it respects Northfield’s historic guidelines.

“Milhaus is really proud to boast a track record of working with neighborhoods to design each and every project to its specific tastes and characteristics,” said Jake Dietrich, Project Manager for Milhaus, in a statement. The Gantry will apply principles of good urban design. It will also preserve an historic building on Langland Street. Milhaus plans to submit the project for LEED Silver certification.

The $13 million development will not only help revitalize Northside, it will also help address a growing demand for high-quality housing. “Northside is in the midst of the biggest development boom it’s seen in 100 years, said Ollie Kroner, president of the Northside Community Council. “The Gantry project has been a decade in the making, and is the product of numerous community conversations. We are excited to see more housing coming to the heart of the business district.” Completion is expected by the end of 2015.

Photo credits: Milhaus Development

National Air Force Museum Starts $35M Expansion at Wright-Patterson AFB

21 Jun 2014, 3:17 am

By Adrian Maties, Associate Editor

Each year, more than 1 million people from around the world come to Wright-Patterson Air Force Base near Dayton to visit the National Museum of the United States Air Force. Its collection is among the largest of its kind and includes more than  360 aerospace vehicles and thousands of artifacts.

“As the Air Force’s window to the public, the museum is where the people come to learn about the history, mission and evolving capabilities of America’s Air Force and about the Airmen who are truly the foundation of everything we do,” noted Air Force Secretary Deborah Lee James in a statement.

The museum’s collection occupies more than 17 acres of indoor exhibit space, and its facilities are about get bigger. One June 3, .the museum broke ground on a 224,000-square-foot building that will house aircraft from the Presidential, Research and Development (R&D) and Global Reach collections, as well as a new and expanded Space Gallery. The new facility will also house three science, technology, engineering and mathematics learning centers. The U.S. Army Corps of Engineers selected Turner Construction Co. last December to serve as general contractor.

Estimated to cost $35.4 million, the expansion is being financed by the Air Force Museum Foundation, Inc. Since its establishment in 1960, the foundation has raised more than $85.6 million for the museum. Its current capital campaign has raised funds from individuals, foundations and companies such as Lockheed Martin, Boeing, United Technologies, Pratt & Whitney, Rolls Royce North America, and Northrop Grumman.  The capital campaign is seeking to raise $46 million to finance additional building and educational requirements.

Photo credits: National Museum of the United States Air Force

Rolling Hills Hospitality to Develop 120-Key Hotel at Sharonville Convention Center

12 Jun 2014, 9:33 pm

By Adrian Maties, Associate Editor

In late May, the city of Sharonville and Rolling Hills Hospitality Group signed a memorandum of understanding to develop a 120-key select service hotel at Sharonville Convention Center.

The $14 million project will be part of the transformation of the city’s Northern Lights Entertainment District and is expected to boost the local economy by attracting more conventions, trade shows and other events. Sharonville has secured more than $200 million in public and private investments to help revitalize the Northern Lights district.

The new hotel will anchor the Sharonville Convention Center, which recently underwent a $25 million expansion and renovation.

“While our event business has grown significantly since the expansion, our convention and tradeshow customers have continually communicated their need for a first class hotel that is attached to our center,” said Jim Downton, the convention center’s executive director, in a statement.

The developers have yet to announce a starting date for construction, which is expected to take 16 months. Bimal Patel, founder of Fort Mitchell, Kent.-based Rolling Hills Hospitality, will oversee development. The firm is also working to secure a national hotel flag.

Rendering: City of Sharonville

eBay Plans $52M Expansion in Boone County

8 Jun 2014, 2:49 am

By Adrian Maties, Associate Editor

eBay Enterprise is expanding its operations in Northern Kentucky. Gov. Steve Beshear announced on May 29 that the global provider of retail-optimized commerce solutions plans to invest nearly $52 million in a new fulfillment center in Boone County.

Scheduled to open this summer, the 630,000-square-foot facility will be located on Transport Drive in Walton. The project will create more than 300 full-time jobs, eBay said. Joining fulfillment centers in Louisville and Shepherdsville, the Walton facility will expand the company’s distribution space in northern Kentucky to more than 1.4 million square feet.

The company is expanding in order to meet rising customer demand. It invested $45 million last year to expand its Louisville facility, adding 150 new jobs.

“This is a remarkable investment in the Commonwealth, with eBay Enterprise spending $52 million to expand its footprint in northern Kentucky,” Beshear said in a statement. “This announcement is further proof Kentucky provides a strategic location for companies to ship their products around the world.”

The Kentucky Economic Development Finance Authority gave preliminary approval for up to $2.3 million in tax incentives through the Kentucky Business Investment program. The incentives, which are performance-based, will allow eBay to  keep a portion of its investment over the term of the agreement through corporate income tax credits and wage assessments by meeting job and investment targets.

Port Authority Names Cassidy Turley To Market MidPointe Crossing

30 May 2014, 3:25 pm

By Adrian Maties, Associate Editor

The Port of Greater Cincinnati Development Authority has started planning and site development of the MidPointe Crossing project in Cincinnati’s Bond Hill neighborhood, and has named Cassidy Turley to market the $80 million project.

MidPointe Crossing will rise on 25 acres at the intersection of Seymour Avenue and Reading Road. The site was once the home of Swifton Commons, the region’s first shopping mall, which was demolished last December to make way for the new development.

Plans call for the construction of office, retail, residencies, parking spaces and a hotel. During the first phase, the Port Authority plans to develop up to 500,000 square feet of office and retail space.

Cassidy Turley Senior Vice President Scott Abernethy and Associate Joshua Smitherman will lead office land sales. Vice President Andrew Sellet and Associate Terry Ohnmeis will handle retail land sales.

“MidPointe Crossing is Cincinnati’s next great office and retail location,” said Port Authority President & CEO Laura Brunner in a statement. “The Port Authority and City of Cincinnati have teamed on making significant investment in this location that complements all of the other momentum nearby. We now expect the market will respond favorably, because there are only a handful of development-ready city sites of this caliber.”

Over the past decade, the Seymour/Reading corridor has attracted more than $270 million in investment, including 300 new homes, new schools, recreational facilities, and religious institutions. That investment has created more than 1,900 jobs.

Photo illustration credit: The Port of Greater Cincinnati Development Authority

Celanese Breaks Ground on $20M Expansion of Florence Facility

24 May 2014, 1:39 am

By Adrian Maties, Associate Editor

Celanese Corp. broke ground May 15 on a $20 million expansion of its manufacturing  facility in Florence, Kent. The expansion will help Celanese keep pace with demand for its advanced engineered materials products.

Celanese’s facility is home to 350 employees  and the company’s research and development center. The project will create a 25,000-square-foot manufacturing and technology innovation hub. It will add compounding process lines to the existing site and create 10 new jobs. The new unit is expected to be operational in the first quarter of 2015.

“Celanese has been producing high-performance engineering thermoplastics at its Florence facility since 1984, providing hundreds of jobs and millions of dollars in capital investment in northern Kentucky,” Gov. Steve Beshear said in a statement. “We’re excited that Celanese chose to build this new and innovative manufacturing facility in Boone County. We welcome this investment and thank the company for providing more jobs for Kentuckians.”

“Our manufacturing facility in northern Kentucky is a center for innovation that drives research and development and the advancement of high performance engineered materials,” said Phil McDivitt, vice president and general manager of the Celanese engineered materials business. “In addition to critical design and engineering support, we provide our customers with technical expertise throughout the product development cycle. This expansion and investment in new prototyping and full-scale production lines will help us better serve our customers around the world, align our manufacturing capability and improve operational efficiency.”

The Kentucky Economic Development Finance Authority has approved Celanese for tax incentives up to $300,000 in tax incentives through the Kentucky Business Investment program. The company will also receive up to $100,000 in tax benefits through the Kentucky Enterprise Initiative Act.

U Square @ The Loop Takes NAA’s Best Student Housing Award

15 May 2014, 2:25 am

By Adrian Maties, Associate Editor

A Cincinnati student housing development is among this year’s winners in the National Apartment Association’s annual PARAGON awards. U Square @ The Loop won the award for best student housing community in the annual awards program, which recognizes the multifamily housing industry’s top communities, executives, employees and affiliate programs.

A joint venture between Al Neyer and Towne Properties started work on the development in 2012. At a cost of $78 million, the project was the second largest besides The Banks to break ground in Cincinnati since the recession.

The LEED certified community opened last August on a 4.2-acre site between McMillan Avenue and Calhoun Street, just south of the University of Cincinnati. U Square @ The Loop features 80,000 square feet of retail space, 40,000 square feet of office space, 161 studio units, one- and two-bedroom apartments, a community green and two structured parking garages with more than 700 spaces. According to the community’s website, apartments rent for between $820 and $2,500 per month. Amenities include a club room, a fitness center and outdoor terraces.

This year’s winners will be recognized on June 21 during the 2014 NAA Education Conference & Exposition in Denver. U Square @ The Loop is also a candidate for the NAA Community of the Year award. The winner will be selected from the winners in other categories.

In addition to U Square @ The Loop’s award, the NAA also named Access Property Management’s Michael Markus of Cincinnati the Certified Apartment Maintenance Technician of the Year.


Photo credits: U Square @ The Loop

Historic Crosley Building Could Get New Life as Apartments

9 May 2014, 10:08 pm

By Adrian Maties, Associate Editor

Throughout its long history, the Crosley Building in Cincinnati’s Camp Washington neighborhood, has witnessed the rise and fall of major American companies and has  itself experienced that cycle. But its story is not yet over. Indianapolis-based Core Redevelopment plans to bring new life to the ten-story, light industrial facility and turn it into apartments.

Upon its completion in 1928, the Crosley Building was a state-of-the-art facility. It was also the headquarters of the Crosley Corp. once nation’s largest manufacturer of table-top radios. The renowned Samuel Hannaford and Sons architectural firm created the building’s Art Deco-flavored design.

Over the years, the Crosley Building served as a manufacturing and production facility, where Crosley built cars, radios, refrigerators and many other products. It also served as home to WLW, as well as other broadcasting stations. However, when the Crosley Corp. started its decline, the 290,000-square-foot facility was sold to AVCO Electronics, along with other company assets. AVCO held on to it until the late 1970s, when the Crosley Building was sold to a succession of owners. For the past 20 years, the Crosley Building has been sitting vacant, turning into an eyesore.

But the property’s luck might finally be turning. According to FOX19, Core Redevelopment plans to turn the Crosley Building into 238 market rate apartments. The company will invest between $25 million and $35 million in the project. The project’s backers say that it has the potential to boost the local economy, help revitalize the neighborhood, lower crime rates and increase property values.

At the moment, the project is in its early stages and no construction start date has been announced. Core Redevelopment hopes to receive some help from the city of Cincinnati and the state of Ohio in the form of tax incentives.

Photo credits: Google Maps.

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