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W.P. Carey Buys, Leases Back Air Enterprises Warehouse Facility

11 Feb 2014, 11:22 am

By Adrian Maties, Associate Editor

A Northeast Ohio industrial property recently changed hands. The Air Enterprises Manufacturing/Warehouse Facility in Streetsboro, Ohio, has been acquired by W. P. Carey Inc., a publicly traded REIT, for $7 million.

Air Enterprises will continue to occupy the 178,180-square-foot property, which it has leased for a period of 15 years. The Akron-based company started moving into the new facility last fall as part of its expansion plans. The Record-Courier reported that Air Enterprises will create more than 250 new jobs at the Streetsboro facility, located at 1777 Miller Parkway, less than 25 miles from Cleveland’s central business district, in the next five years.

The property was constructed in 1993, on 23 acres of land. It offers office and warehouse space, as well as more than 250 parking spaces. It was previously occupied by Commercial Turf Products. According to PropertyShark.com, Commercial Turf Products acquired the facility in 1997 for $4.9 million.

W. P. Carey acquired the facility on behalf of CPA®:18 – Global, one of its managed non-traded REIT affiliates. It announced the acquisition together with that of a 1.6 million-square-foot Chicago distribution facility leased to a Solo Cup affiliate. For the second property,  W. P. Carey paid approximately $85 million.

“The two transactions closed on behalf of CPA®:18 – Global demonstrate how W. P. Carey can tailor transactions that enable private companies and institutional real estate investors to sell assets on a timely basis consistent with their specific investment strategies and liquidity requirements. Sourcing, structuring and executing on a variety of single-tenant property types in diverse industries and locations supports our established investment strategy of generating stable, long-term cash flow for investors,” said Gino Sabatini, W. P. Carey managing director & co-head of global investments, in a statement for the press.

CBRE recently reported that Northeast Ohio’s industrial market continued to improve in 2013, with availability decreasing to 7.16 percent at the end of the year. Sale and leasing activity in the region increased, hitting a high of 2.8 million square feet in the third quarter of 2013, levels not seen since pre-recession. And CBRE expects sale prices to continue to bounce back to pre-recession levels this year, as well.

Photo credits: Google Maps.



Buffalo Lodging Associates to Manage Hilton Garden Inn Akron

4 Feb 2014, 6:39 am

By Adrian Maties, Associate Editor

The Hilton Garden Inn Akron is scheduled to open this fall. The hotel is currently under development on three acres of land, on the former Goodyear world headquarters campus, at the corner of East Market Street and Kelly Avenue. It will be the first hotel constructed in Akron since 1980 and it will be managed by Buffalo Lodging Associates LLC.

The hotel is being developed by Pittsburgh-based Summit Development and Industrial Realty Group LLC (IRG), a national real estate development and investment firm. Work on the project started last year. At a cost of $18 million, it will deliver a 139-room hotel with a full restaurant and bar, an indoor swimming pool, a fitness center, meeting rooms offering about 3,000 square feet of flexible space and more.

The Hilton Garden Inn Akron is considered the second phase of the larger East End mixed-use project, also developed by IRG and Summit. The project calls for the renovation of the former Goodyear Tire & Rubber Co. corporate headquarters and Goodyear Hall across the street. The two developers will transform the 1.7 million square feet of space into a mix of offices, retail and residences. Located right in the heart of this massive development, the Hilton Garden Inn Akron is expected to become an important amenity for the downtown Akron business district.

“We are very pleased to have been selected by IRG and Summit and look forward to delivering an outstanding lodging experience to the Goodyear Tire & Rubber Co. and the greater Akron community,” said Cole Fach, vice president of development for Buffalo Lodging Associates, in a statement for the press.

Based in Canton, Mass., Buffalo Lodging Associates offers a wide range of development and management services for new and existing hotel owners. Its portfolio includes 42 hotels throughout New York, Ohio, Missouri, Massachusetts, Connecticut, Rhode Island, Florida, New Jersey and Ontario, Canada.

Photo credits:  www.eastendakron.com



Two More Hotels Planned for Cleveland Area

28 Jan 2014, 5:14 am

By Adrian Maties, Associate Editor

2013 was a good year for hotel construction in the Greater Cleveland area, as developers started work on a number of projects expected to deliver hundreds of new rooms to the region in the near future. And it seems that this hotel construction boom will continue  into 2014. Work will soon start on two more projects in the metro area, one in downtown Cleveland, the other in Avon.

Jacobs Real Estate Services recently announced it will develop a Residence Inn by Marriott hotel at its Avon Place development in Avon. It will be located on Just Imagine Drive, adjacent to the Cleveland Clinic Richard E. Jacobs Health Center.

The new hotel will be constructed on a 4.27-acre site that Jacobs Real Estate Services has agreed to sell to Emerald Hospitality Associates Inc. and its independent affiliate, Nimbus Investment Fund. It will stand five stories tall and offer 116 rooms, with all the amenities of the Residence Inn hotels. An attached 10,000-square-foot conference center will also be constructed. The hotel is expected to open in spring 2015.

“We are excited that Marriott and Emerald Hospitality have chosen Avon Place. Residence Inn will be a perfect complement to the expanding Cleveland Clinic, restaurants and offices planned for this development,” said Jim Eppele, JRES executive vice president, in a statement for the press.

Crain’s Cleveland also recently reported that workers have installed black chain link fences around the former Cleveland Metropolitan School District administration building at 1380 E. Sixth St. in downtown Cleveland. The property will be transformed into the Drury Plaza Hotel.

However, developers don’t expect any real construction to start until summer, as there are still many hurdles the project needs to pass, such as securing city approvals for Drury’s plans or obtaining Ohio Historic Preservation Tax Credits. Construction crews are currently working on site cleanup and asbestos abatement.

The makeover is expected to cost more than $35 million. It will deliver a 180-room hotel. The project is expected to be completed by late 2015.

Photo credits: Google Maps            



Westin Cleveland Downtown to Open in May

21 Jan 2014, 3:57 am

By Adrian Maties, Associate Editor

The Westin Cleveland Downtown hotel will open in May in Cleveland’s downtown financial district, following a $64 million renovation. It will have a new look and a new general manager. Recently, the ownership hired Mark Anderson to lead the hotel in operations and guest services.

Optima Ventures partnered with Sage Hospitality to buy and renovate downtown Cleveland’s second-largest hotel. They paid $9 million for the property, purchasing it from the defunct financial-services giant Lehman Brothers Holdings Inc. The renovation project started in December 2012, with Willoughby, Ohio-based Marous Brothers Construction as the general contractor. It is designed by McCarten, an award-winning New York design firm.

When finished, the project will deliver a 484-room, contemporary, art-driven hotel, within steps of some of downtown Cleveland’s most important attractions: the Cleveland Convention Center and Global Center for Health Innovation, Browns Stadium and the Rock & Roll Hall of Fame. The new hotel will feature 20,000 square feet of flexible event space that can be divided into 20 separate rooms, including a 9,000-square-foot Grand Ballroom connected to the floor above by a glass staircase. Other amenities include a state-of-the-art fitness center, a business center, a Starbucks, as well as a new restaurant, the Urban Farmer-Cleveland’s Steakhouse. Once finished, the property is expected to achieve LEED certification.

Anderson has experience with the Westin brand as well as Sheraton and Hilton. He previously managed such hotels as the 1,053-room Boston Park Plaza Hotel and Towers, the Hilton Stamford, the Sheraton Boston and the Westin Providence Hotel. He joined the Westin Cleveland Downtown on Dec. 11, 2013.

“Sage is thrilled to have Mark lead us into the exciting Cleveland market,” Vincent Piro, divisional vice president of operations, premier & lifestyle for Sage Hospitality, said in a statement for the press. “This hotel will bring modern luxury, local flavor and authentic service to the Cleveland market. We look forward to its opening.”

Photo credits: www.westincleveland.com/

 



BakerHostetler to Move to Cleveland’s Key Tower in 2016

13 Jan 2014, 3:42 pm

By Adrian Maties, Associate Editor

Prime office spaces continue to be in high demand in Downtown Cleveland. BakerHostetler is just the most recent name added to the growing list of companies looking to do or to continue doing business in the CBD. Ranked 65th on the AmLaw 100 (American Lawyer, 2013, by gross revenue), the global law firm recently signed a 15-year lease for space in Downtown Cleveland’s iconic Key Tower. Currently, it is located in PNC Center, at East Ninth Street and Euclid Avenue.

Standing 57 stories, or 947 feet tall, Key Tower is the largest building in Cleveland, the largest in the state of Ohio, the 20th largest in the United States and the 107th largest in the world. The skyscraper was completed in 1991 and opened in January 1992. It was designed by the famous architect César Pelli. The building offers 1.3 million square feet of space and is the headquarters of KeyCorp, the holding company for KeyBank. KeyCorp signed a 15-year lease extension for 37 percent of the Class A office tower in 2013.

Columbia Property Trust, one of the nation’s largest office REITs, has owned Key Tower since December 2005.  Starting in January 2016, BakerHostetler will occupy five floors of the 57-story building, about 115,615 square feet of space. Columbia Property Trust was represented by its vice presidents of asset management, Jerry Banks and Darik Afshani, and by Douglas Miller, Cindy Greiner and John Klayman of Jacobs Real Estate Services, an affiliate of The Richard E. Jacobs Group. Sherry Cushman of Cushman & Wakefield Inc. and Doug Leary of CBRE Group Inc. represented BakerHostetler.

“We are pleased to welcome BakerHostetler as a tenant at Key Tower,” Jerry Banks said in a statement for the press. “This deal supports our strategy to build value for our investors by enhancing the tenancy of Key Tower with yet another long-term, highly creditworthy tenant.”

Over the past two years, tens of businesses have moved to the CBD, bringing over 5,000 new jobs with them. CBRE expects this trend to continue for the next few quarters and the demand for prime office space to remain strong. The overall vacancy rate decreased in the third quarter of 2013 from 20.2 percent to 20.1 percent, while office rental rates increased by $0.86, ending the third quarter at $17.87 per square foot. In the CBD, rents increased from $19.10 per square foot to $19.29 per square foot.

Photo credits: Columbia Property Trust
Charts courtesy of CBRE.


Marcus & Millichap Arranges Sale of North Olmsted Towne Center for $17.8M

7 Jan 2014, 4:51 am

By Adrian Maties, Associate Editor

Large retail properties in the Greater Cleveland area saw a lot of action in the final quarter of 2013. Devonshire REIT Inc. paid $8 million for the Great Lakes Plaza in Mentor, while Starwood Capital Group acquired two shopping centers in North Olmsted and Canton as part of a $1.6 billion, seven-property portfolio.

More recently, the North Olmsted Towne Center changed hands. Carnegie Management and Development Corp. sold the shopping center for $17.8 million, or $186 per square foot, to an out-of-state private investor. According to Marcus & Millichap Real Estate Investment Services’ Cleveland-area retail report for the third quarter, the lack of quality assets, particularly in the shopping center segment, kept the median price per square foot for multi-tenant properties 10 percent lower, at $38 per square foot, compared to the level at midyear.

The Towne Center is located in the center of North Olmsted’s commercial district, at 25100 Brookpark Road, about 17 miles southwest of Cleveland. It offers 95,446 square feet of retail space, with tenants such as David’s Bridal, The Tile Shop, Jimmy John’s, La-Z-Boy, Men’s Wearhouse, Moe’s Southwest Grill, Party City and Pearle Vision. The property is also shadow anchored by a Target and a Walmart Supercenter.

Marcus & Millichap arranged the sale. Scott Wiles and Craig Fuller, of its Cleveland office, and Erin Patton, of its Columbus office, represented the seller. Together with Dustin Javitch of the Cleveland office, they also advised the buyer.

“Multi-tenant property transaction velocity in the Cleveland metropolitan area has nearly doubled over the past four quarters as local investors became much more active in the market,” Wiles said in a statement for the press. “Well-located, high-quality centers such as the North Olmsted Towne Center attract attention from local investors and out-of-area buyers from throughout the investor spectrum.”

Photo credits: Carnegie Management and Development Corp.
Charts courtesy of Marcus & Millichap Real Estate Investment Services


Ohio Development Services Agency Awards $20M in Ohio Historic Preservation Tax Credits to Five Northeast Ohio Projects

31 Dec 2013, 8:52 am

By Adrian Maties, Associate Editor

On Dec. 20, the Ohio Development Services Agency awarded $33 million in Ohio Historic Preservation Tax Credits to rehabilitate 31 historic buildings in 10 communities across the state. Five of these projects are located in Northeast Ohio.

The Round 11 Winners of the Historic Preservation Tax Credits in Northeast Ohio are 264 Broadway Ave., the Akron Masonic Temple, the Hoover West Factory Complex, Johnson Court and the May Company Apartments. They were awarded more than $20 million, almost two-thirds of the $33 million. The Northeast Ohio projects are expected to leverage more than $250 million in private investments. In total, the tax credit recipients in the state of Ohio are expected to leverage more than $400 million. The awards will help developers rehabilitate the buildings, many of which sit vacant today, and bring new life to the surrounding neighborhoods.

At a cost of $477,000, 264 Broadway Ave. is the smallest of the Northeast Ohio projects. It was only awarded $93,200 in tax credits. Plans call for the transformation of the former mental health facility in Youngstown’s historic Wick Park neighborhood into five market-rate apartments.

The almost century-old Masonic Temple at 103 S. High St., in Akron, will be turned into a full-service, 16-room hotel at a cost of about $48 million. It was awarded $4,997,737 in tax credits.

The Hoover West Factory Complex is the central landmark of downtown North Canton. It consists of 19 buildings, with half-a-million square feet of space. A $51 million project will turn the former home of the nation’s leading vacuum manufacturer into a mix of retail, office and residential space, creating 132 market-rate residential units. It is the first North Canton project to use the Ohio Historic Preservation Tax Credit Program and will receive a total tax credit of $5 million.

The Johnson Court complex is one of the last properties in Cleveland’s Warehouse District to be rehabilitated. A $30 million project will transform the 200,000-square foot structure into 73 market-rate apartments, with indoor parking and commercial space. Plans also include a rooftop penthouse. It was awarded $5 million in tax credits.

The mammoth May Company Building in Cleveland sits almost completely vacant today, although it once housed one of Cleveland’s leading department stores. This autumn, developers announced their plans to turn the century-old building into a residential tower with 353 apartments and about 600 parking spaces. The total cost of the project is $129 million, the largest of the 33. It was awarded $5 million in tax credits.

“The Ohio Historic Preservation Tax Credit strengthens local communities by restoring a piece of its history,” said David Goodman, director of the Ohio Development Services Agency, in a statement for the press. “These projects help enrich cities across Ohio, preserving the character and charm of buildings that may have otherwise been demolished.”



Arhaus Furniture to Move 230 Employees to New Corporate HQ in Boston Heights

23 Dec 2013, 4:22 am

By Adrian Maties, Associate Editor

Arhaus Furniture, one of the fastest-growing furniture  retailers in the United States, has announced it plans to build a new $43 million corporate headquarters and distribution center in the village of Boston Heights. Construction is slated to start in March 2014. Arhaus Furniture hopes to move into the new building by April 2015.

The company’s current headquarters building is located at 7700 Northfield Road in the village of Walton Hills.  It only offers a combined 270,000 square feet, and is unable to accommodate the growing company’s needs. “Walton Hills has been home to us for nearly 20 years. While here we’ve experienced tremendous growth and expanded our facility several times to accommodate our high growth. We’ve now reached a point where we have literally run out of space and the ability to expand further,” Greg Teed, Arhaus Furniture CFO, said in a statement for the press. He added that a major expansion was necessary in order for the company to continue to be an industry leader.

Arhaus Furniture’s new headquarters building will be constructed on 64 acres of land at the former site of the Boston Hills Country Club, on East Hines Hill Road, near the intersection with State Route 8. The new facility will offer 770,000 square feet of space, with the possibility of expanding to 1 million square feet. “It will be substantially larger to not only accommodate the growth we’ve experienced recently in staff numbers and product assortment but continued success and expansion that we are planning for the next 10 years,” Teed said.

The furniture retailer will bring its staff of 230 to Boston Heights. It also plans to create at least 30 new positions each year. “We’re excited to welcome such a reputable and responsible company to the village of Boston Heights,” Boston Heights Mayor Bill Goncy said. “Their commitment is not only to sustainability in the design and construction of their furnishings but to minimizing their impact on our local environment with energy efficiencies for all buildings. This is a complement to the other companies already here and our residents. We look forward to having them as a corporate partner for many years to come.”

Arhaus Furniture also considered other states but chose to keep its operations in Ohio. The incentives offered by state and local officials convinced the company to stay. Arhaus will receive an 85 percent property tax abatement for 15 years. “We are very appreciative of the work that the village of Boston Heights has done in bringing such a wonderful company to our area,” said Superintendent Phil Herman. “The continuous revenue stream generated by this new corporate neighbor will provide much needed resources for the district’s on-going permanent improvement projects and other programs, benefiting both our students and community.”

Photo credits: Google Maps



CSU Breaks Ground on $45M Center for Innovation in Health Professions

16 Dec 2013, 9:28 pm

By Adrian Maties, Associate Editor

Cleveland State University broke ground on Dec. 9 on a new health sciences building. Called The Center for Innovation in Health Professions, it will be a place for students to learn and work together in interdisciplinary collaboration. The project is expected to cost $45 million.

The state-of-the-art facility will be located at the corner of Euclid Avenue and E. 22nd Street, on the site of the former Viking Hall dormitory, the Wolfe Music building, the Rascal House restaurant and Peabody’s Concert Club. CSU started the demolition of the Peabody’s and Rascal House buildings earlier this month.

The 100,000-square-foot center will serve as the new home of the Partnership for Urban Health, a partnership between CSU and the Northeast Ohio Medical University (NEOMED), dedicated to training physicians and other health professionals. Nursing, occupational and physical therapy, music and art therapy, social science research, criminal forensics, cultural anthropology and contemporary alternative medicine also will be taught at the center. NEOMED will occupy about 20 percent of the new building and will lease the space for 25 years.

The new facility will include:

  • An Innovation Center that supports creative teaching and learning strategies as well as collaborative and innovative research;
  • A Speech and Hearing Clinic, complete with observation and testing labs.
  • Nursing simulation labs;
  • An occupational therapy/physical therapy training room;
  • The CSU Health and Wellness Services Department;
  • NEOMED standardized patient exam rooms; a pharmacy simulation lab and classrooms;
  • Distance-learning rooms and classrooms for students from both universities;
  • “Touchdown” rooms for small-group learning;
  • Quiet study areas;
  • Lounges;
  • A café;
  • A large central atrium for informal gatherings and events;
  • Faculty and administrative offices clustered to maximize collaboration.

 “Our new health sciences building will foster an exciting new model for health-care education,” CSU President Ronald Berkman said in a statement for the press. “For too long, healthcare education has been relegated to silos, with little or no interaction among aspiring physicians, nurses and other health professionals. In a city renowned for world-class healthcare, our collaborative approach to healthcare education will lead to new efficiencies that ensure better health, better care and lower healthcare costs.”

Construction is scheduled to start this month. Internationally renowned architectural firm Pelli Clarke Pelli designed the building. The New Haven, Conn.-based company also designed New York City’s World Financial Center, Malaysia’s Petronas Towers, Hong Kong’s International Finance Centre and Cleveland’s Key Tower. The Center for Innovation in Health Professions is expected to open in June 2015.

Photo credits: Cleveland State University Tumblr



Devonshire REIT Buys Mentor’s Great Lakes Plaza for $8M

10 Dec 2013, 9:49 am

By Adrian Maties, Associate Editor

Another Cleveland-area shopping center has changed hands. A few weeks ago, Starwood Capital Group has completed the acquisition of two Northeast Ohio shopping centers, as part of a seven-property portfolio for which the Greenwich, Conn.-based investment firm has paid $1.6 billion to the Sydney, Australia-based Westfield Group. Now, Devonshire REIT, Inc. Has announced it has closed the purchase of Great Lakes Plaza.

Great Lakes Plaza is located at 7900 Plaza Boulevard, in Mentor, a far eastern suburb of Cleveland, on the south shore of Lake Erie. The shopping center is co-anchored by Michaels Stores, Inc., the largest arts and crafts chain in the United States, and hhgregg, Inc., a publicly traded electronics and home appliance retailer. Its tenant roster also includes other national retailers such as: Shoe Carnival, Tuesday Morning and Cato Fashions.

Great Lakes Plaza offers 81,349 square feet of leasable space. According to a press release by Devonshire REIT, Inc., the shopping center is 100% leased. The Whitehouse, Oh.-based fully integrated real estate investment trust acquired the property from the Simon Property Group for $8.0 million. The Goldman Sachs Mortgage Company provided financing.

“As a value-oriented center, the property is a perfect fit for our portfolio, it is also 100% leased, will be accretive to earnings, and expands our footprint into the Cleveland MSA,” said Chris Campbell, President and CEO of Devonshire REIT, in a statement for the press. Mike Denman, Executive Vice President of Real Estate Operations, also added that “Great Lakes Plaza is in a prime location across the street from Great Lakes Mall, which is a destination shopping center for Northeast Ohio. It’s a great center with a solid tenant mix and we’re excited to include it in our portfolio.”

Devonshire REIT, Inc. owns, operates, and develops dominant shopping centers primarily in the Great Lakes and Midwest regions of the United States.  The company’s portfolio currently consists of 36 properties representing over 2 million square feet of leasable space.

Photo credits: Devonshire REIT, Inc.







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