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Developers Plan Almost 400 New Apartments for Downtown Cleveland

12 Jul 2014, 4:42 am

By Adrian Maties, Associate Editor

Although apartment construction in Greater Cleveland has reached a five-year high, developers are not ready to slow down. They continue to announce new projects, with the two most recent expected to bring almost 400 new units to the city’s downtown area.

According to The Cleveland Plain Dealer, Nathan Zaremba, CEO of Zaremba Cleveland, plans to start work on a 108-unit apartment project on land once slated for townhouses at the dormant Avenue District development. Zaremba submitted documents to the city of Cleveland last week.

Plans call for the construction of nine two- and three-story apartment buildings that will house 59 one-bedroom units and 49 two-bedroom units, ranging in size from 600 to 1,100 square feet. The project also includes parking spaces for 77 vehicles, as well as bicycle parking and storage.

The Plain Dealer also reported that Weston Inc., a Warrensville Heights developer, recently acquired the Standard Building for $3.9 million. The 21-story property, which is in need of significant renovations to its exterior, changed hands for the first time in its 90-year history.

The Brotherhood of Locomotive Engineers and Trainmen, the nation’s oldest labor organization and the former owner of the property, put the Standard Building up for sale in 2012 for $8.8 million, but Weston purchased it at a lower price than even its current market value of $6.1 million. Now it plans to invest $60 million to convert the old office building into  apartments.

Weston is working with Sandvick Architects and is considering two redevelopment plans. The first calls for the creation of 287 apartments with retail on the ground floor. The second plan would bring 240 apartments, ground-floor retail space and offices on the second through fifth floors.

Construction won’t start immediately, as the 400,000-square-foot building is still 45 percent occupied. It might start a year to 18 months from now, with project completion scheduled for the second half of 2016.

The steady economic growth and the new development in the city’s downtown continue to attract people to the Cleveland area. The Downtown Cleveland Alliance reported at the end of the year that downtown apartment occupancy was nearing 95 percent. Demand for apartments is high and continues to grow. And even though this year’s completions are expected to increase vacancy to 6.2 percent, it won’t affect average rents, which will continue to rise in 2014 to $805 per month.

Charts courtesy of Marcus & Millichap.

Joint Venture Buys Cleveland-Area Shopping Center for $47M

4 Jul 2014, 4:50 am

By Adrian Maties, Associate Editor

A joint venture between two East Coast companies has purchased the Golden Gate Shopping Center in Mayfield Heights. New York-based Hornig Capital Partners LLC and Hutensky Capital Partners of Hartford, Conn., paid $47.1 million for the premier retail plaza. Cleveland-based Forest City was the seller. The deal represents one of the largest single-asset retail sales in the Cleveland market in the past two years.

The property was constructed in 1958. It offers 371,748 square feet of space and is anchored by well-known stores such as Marshalls, PetSmart, Golf Galaxy, h.h. gregg, OfficeMax and Jo-Ann Fabrics. Golden Gate’s convenient location, at the intersection of Mayfield Road and Interstate 271, makes it easily accessible from many of the neighboring Cleveland suburbs. The property was last renovated in 1995.

Joseph Khouri, first vice president at CBRE Inc., represented the buyers in the transaction. Goodman Real Estate Services Group LLC represented Forest City.

“I am very proud to be part of such a monumental transaction in the Cleveland market. It is gratifying to see hard work pay off while providing the highest level of service and ultimately value to our client. We represent a number of active buyer-clients currently pursuing quality unlisted or off-market retail assets in Ohio in various asset categories from $10 to $100 million,” Khouri said in a news release.

In its second-quarter retail market report for the Cleveland-Akron area, Marcus & Millichap says that investor demand for multi-tenant assets has accelerated. Sales activity has surged 60 percent over the past 12 months, with the average sales price rising 5 percent to $114 per square foot.

Photo credit: Forest City
Chart courtesy of Marcus & Millichap

Ten Northeast Ohio Rehabilitation Projects Receive More Than $20M In Historic Tax Credits

27 Jun 2014, 9:09 pm

By Adrian Maties, Associate Editor

Round 12 of the Ohio Historic Preservation Tax Credit program has brought good news to 35 rehabilitation projects in 13 communities across the state of Ohio. They will receive a total of $37.7 million in tax credits. According to the Ohio Development Services Agency, these 35 projects are expected to leverage nearly $250 million in private investments.

Ten projects are located in Northeast Ohio. They were awarded about $20 million, more than half of the entire sum. Three of them won $5 million each. The remaining developments received tax credits worth between $180,000 and $1.9 million. The 10 winners are as follows:

  • The redevelopment of the Firestone Triangle Building in Akron – The $25.5 million project will turn a more than a century-old industrial building into offices. It was awarded a $5 million credit.
  • The redevelopment of the Garfield Building in Cleveland – A $31.5 million project will convert an empty building, originally constructed in 1893, into 167 market-rate apartment units and three separate restaurant spaces. It was awarded a $5 million credit.
  • The redevelopment of the Stambaugh Building in Youngstown – The $25.5 million project will turn the building into a full-service hotel with 120 rooms. It was awarded a $5 million credit.
  • The Falls Stamping and Welding Building project in Cuyahoga Falls – The $1.3 million project will turn the old industrial structure into office space and will create as many as 15 jobs. It received $241,261 in credits.
  • The Akron Soap Co. building project in Akron – Once the $2.3 million rehabilitation is complete, it will create 54 permanent jobs. It received $448,000 in credits.
  • The Guernsey Apartment Building in Cleveland – A $1.7 million project will rehabilitate the four-story apartment building and will bring 25 units to the market. It was awarded  $248,375 in credits.
  • The Murphy Hall modernization project in University Heights – A $36.6 million project will upgrade the interior of the old college dormitory located in the John Carroll University North Quad National Register Historic District. It received $1.9 million in credits.
  • The Near West Lofts Storefront in Cleveland – A $1.1 million project will rehabilitate the building’s commercial space for a restaurant tenant. It was awarded $180,499 in credits.
  • Our Lady of Mercy redevelopment project in Cleveland – MCM Cos. will redevelop the former Catholic parish into office space. The cost of the project is $5.1 million. It was awarded $1 million in credits.
  • The Ogilvie Block project in East Liverpool – Pennsylvania-based New Castle School of Trades plans to invest $6.5 million and bring new life to the vacant building. This is the first project in East Liverpool and Columbiana County to access the Ohio Historic Preservation Tax Credit Program. It was awarded $1.1 million in credits.

The awards will aid developers in the rehabilitation of these historic buildings, many of which currently sit vacant. Once complete, the projects will help improve the local economies. A Cleveland State University study has revealed that $1 million in Ohio Historic Preservation Tax Credits generates $8 million in construction spending, $40 million in total economic activity and almost 400 jobs from construction and operations.

“The Ohio Historic Preservation Tax Credit leads to investment in both small towns and big cities,” said David Goodman, director of the Ohio Development Services Agency, in a statement for the press. “These projects strengthen local communities and create construction jobs during the renovation and permanent jobs once the building reopens.”

Last December, the 11th round of the Ohio Historic Preservation Tax Credit program saw the Ohio Development Services Agency award $33 million in tax credits to rehabilitate 31 historic buildings in 10 communities across the state. Five Northeast Ohio projects scooped up more than $20 million, almost two-thirds of the sum.

Devonshire REIT Buys Beachwood’s Pavilion Shopping Center for $35M

20 Jun 2014, 11:05 pm

By Adrian Maties, Associate Editor

Devonshire REIT Inc. earlier this week announced the addition of a new grocery-anchored power center to its 44-property portfolio. The real estate investment trust paid $35 million to acquire the Pavilion Shopping Center, located in the Cleveland suburb of Beachwood. Huntington Bank provided financing for the transaction.

The Pavilion Shopping Center is located on Chagrin Boulevard, just minutes from I-271. It is a 249,873-square-foot power center anchored by Giant Eagle, one of the largest privately owned and family-operated companies in the nation, and sub-anchored by Big Lots, Marshalls, Michael’s and Stein Mart. In a news release, Devonshire said the center was 97 percent occupied at the time of the sale and that it is currently negotiating with a tenant for the remaining vacant space. The Pavilion Shopping Center is also home to Petco, Lane Bryant, Quiznos, Bruegger’s Bagels, Sally Beauty Supply, GNC, Verizon Wireless, Ruby Tuesday and Huntington Bank.

“The Pavilion is a perfect example of Devonshire’s acquisition philosophy — grocery-anchored, value-oriented, national tenants, high cash flow with upside and in an attractive sub-market. We also see it as a great opportunity to establish relationships with national tenants, like Stein Mart and Petco, who don’t currently have stores in any of our other properties,” Mike Denman, president of real estate operations, said in a statement for the press.

Marcus & Millichap reports that investor demand for multi-tenant assets has accelerated in the Cleveland metro area.  Sales activity surged by 60 percent during the past 12 months, compared to the previous year-long period, and the average sales price rose by 5 percent, to $114 per square foot.

The brokerage firm also said that multi-tenant vacancy has remained steady at 11 percent during the past year. However, available asking rents in the multi-tenant sector increased by 4.8 percent, to $11.10 per square foot.

Charts courtesy of Marcus & Millichap.
Photo credit: Devonshire REIT

Cleveland Clinic, Select Medical to Build New Adult Inpatient Rehabilitation Hospital in Avon

16 Jun 2014, 4:46 am

By Adrian Maties, Associate Editor

The Cleveland Clinic has formed a joint venture with Select Medical, one of the nation’s largest providers of specialized acute and post-acute care. The two organizations plan to enhance inpatient rehabilitation services in Northeast Ohio and build a new 60-bed adult inpatient rehabilitation hospital in Avon.

The cost of the project was not announced. However, construction is expected to start this summer, with the opening of the new facility scheduled for late 2015. The West Side rehabilitation hospital will be located next to Cleveland Clinic’s Avon medical campus.

“We recognize that the best way for patients to heal and recover is to have their rehabilitation close to their family,” Robert Wyllie, M.D., Cleveland Clinic’s chief medical operations officer, said in a statement. “This joint venture allows us to expand our services with a national leader in post-acute rehabilitation who has a proven record of partnering with academic medical centers, like Cleveland Clinic, to take care of the sickest patients.”

“Between Cleveland Clinic’s world-class reputation for excellence and our expertise in inpatient rehabilitation, there is terrific synergy between our two organizations,” added David Chernow, president & CEO of Select Medical. “Through a shared commitment to delivering the best possible patient experience, I know that we can build something truly special in the post-acute care space.”

In addition, the joint venture will start a residency program for physicians in physical medicine and rehabilitation. And the two organizations have also entered into a management agreement to improve the Clinic’s existing rehabilitation facilities and expand post-acute care capabilities. This agreement takes effect on Aug. 1.

The Cleveland Clinic is involved in several projects in Northeast Ohio. According to The Plain Dealer, it recently paid $1 million for a piece of Euclid Avenue land. The Cleveland Clinic plans to invest $40 million and build a 276-room Holiday Inn on the site. The new hotel could open in early 2016.

Photo credit: The Cleveland Clinic

Cleveland City Council Approves $700M Lakefront Development

5 Jun 2014, 1:27 pm

By Adrian Maties, Associate Editor

Cleveland’s lakefront is getting a makeover. The city recently approved plans to develop more than 20 acres of lakefront property close to the central business district. The project is expected to cost $700 million.

Cumberland Development is working on the development together with Trammell Crow Co. Bellwether Enterprise Real Estate Capital LLC will provide loan origination and financing strategy beyond traditional debt and equity mortgage banking.

Plans call for the construction of more than 2.2 million square feet, including more than 1,000 apartments, 800 parking spaces, 80,000 square feet of office space, 60,000 square feet of retail space, a boutique branded hotel and a charter school serving downtown Cleveland residents.

The project will be developed in three phases. Phase I will include mixed-use development, while Phases II and III call for the construction of residential housing. Each phase will use different sources of capital.

The partners on the project have worked together since the request for proposal phase and will continue to collaborate through its completion. “This project is 25 years in the making and will be transformative for Cleveland. We’re honored to be involved,” Ned Huffman, Bellwether Enterprise president, said in a statement for the press.

Richard Pace, CEO of Cumberland Development, will serve as the principal on the development, managing the project and assuming responsibility for its design, construction and management. “It’s right in the heart of some of Cleveland’s major attractions, and there is no other property like it in the Midwest that has yet to be developed,” he added.

Gilbane Inc. and Coleman Spohn Corp. are the construction managers. The team also includes HKS Architects, URS Corp., SWA Group and Mobius Grey LLC.

Photo credit: Bellwether Enterprise

Joint Venture Buys Large Cleveland Industrial Portfolio

31 May 2014, 4:12 am

By Adrian Maties, Associate Editor

A joint venture acquired a large industrial portfolio in the Cleveland area. Alex. Brown Realty Inc., a real estate investment firm headquartered in Baltimore, teamed up with Biynah Industrial Partners LLC, a Minneapolis-based real estate private equity firm, to buy the Great Lakes Industrial Portfolio. The seller was a joint venture between Virginia’s Harbor Group International and local investors.

The Great Lakes Industrial Portfolio includes nine Class A buildings with 766,477 square feet of space. The properties are located in Cleveland’s South, Southeast and Southwest submarkets. According to CBRE Group Inc., these three submarkets had a good first quarter of the year, registering a decrease in vacancy. The South submarket saw the largest drop in vacancy of the three, falling from 6.2 to 5.6 percent. Meanwhile, the Southeast and Southwest markets showed vacancy rates of 7.3 and 7.2 percent, respectively.

Cleveland’s overall vacancy decreased to 6.2 percent in the first quarter of 2014 and remains significantly lower than the U.S. average. Meanwhile, the average asking lease rates remained steady at $4.51 per square foot.

“We like the fundamentals of this deal—quality assets, submarket diversification, and a strong and stable tenant base,” Jeff Josephs, Biynah’s co-founder & managing principal, said in a statement for the press. He added that the existing leases have at least five years of remaining term and that more than 80 percent of the existing tenants have made significant capital improvements to their space.

The Great Lakes Industrial Portfolio represents the eighth transaction between Alex. Brown Realty and Biynah. According to The Plain Dealer, the price of the transaction was $43 million. The joint venture said it acquired the portfolio at a substantial discount to replacement cost. “Given our low basis and the in-place income, our investment should yield strong cash-on-cash returns from day one,” commented Tom Burton, Alex. Brown Realty’s chief investment officer. He also said that the financing arranged by ARES Real Estate gives the joint venture the flexibility to sell off individual buildings. “That flexibility will undoubtedly enhance our exit strategy.”

Photo credit: Alex. Brown Realty
Charts courtesy of CBRE

Cleveland’s Victory Center Wins 2014 Preservation Achievement Award

27 May 2014, 3:49 pm

 By Adrian Maties, Associate Editor

The new Victory Center redevelopment received recognition on May 1 at the 2014 Celebration of Preservation. The $26.6 million redevelopment of the almost 100-year-old, four-story building at 7012 Euclid Ave. was honored with the Preservation Achievement Award for a Commercial Building by the Cleveland Restoration Society and the Cleveland Chapter of the American Institute of Architects. The new mixed-use complex is located in the core of Cleveland’s Health-Tech Corridor, and is now ready to house the city’s growing incubator and accelerator growth-stage companies.

Garson Victory LLC,  a partnership led by real estate broker Scott Garson, was behind the project. The redevelopment team also includes Domokur Architects, Partners Environmental Consulting, Heritage Consulting, HLMS Sustainability Solutions and NAI Daus.

According to real estate website PropertyShark, the building was constructed in 1917 by the Craig Curtis Co. Griebel and Ebeling architects designed the building in the Neo-­Classical Revival style.

Garson Victory acquired the property in late 2010 for $2.7 million. The restoration project called for the repair and replacement of the terra cotta cornice, the replacement of almost 90 window lintels, repairs to the brick façade and the replacement of 337 windows to exactly match the original window system of the property. The main lobby off Euclid Avenue was also restored. It includes the original terrazzo floor and marble wainscoting, which now sparkle under the upgraded contemporary lighting. The renovation was financed with the help of historic tax credits.

Victory Center opened its doors to tenants earlier this year. The 170,000-square-foot facility is LEED Silver certified and offers both lab and office space.

Photo courtesy of NAI Daus.


Trulia Study Ranks Ohio Cities High for Affordable Housing

18 May 2014, 4:46 am

By Adrian Maties, Associate Editor

Are you a middle-class American looking to buy a home? Head to the Midwestern United States — and make sure you stay away from California. That was a recommendation of real estate research firm Trulia’s list of the least and most expensive U.S. housing markets for today’s middle class.

According to Trulia, affordability has worsened in the past year. Home prices have climbed faster than incomes and mortgage rates have risen. As the nation recovers from the last housing crash, homes are still relatively affordable. And even though prices continue to rise, they are still below pre-recession levels. But homeownership is out of the reach of the middle class in many markets, especially along the coasts.

If you really want to buy a home, you should definitely start your search in Ohio. Last year, Coldwell Banker named Cleveland the most affordable city in the United States. Second on that list was Garfield Heights, a city in the Cleveland metro area. Now, Trulia reports that five of the top 10 most affordable housing markets for the middle class are located in the Buckeye State.

Akron tops the list, with 86 percent of the homes in the area affordable for the middle class. It shares the podium with two other Ohio cities, Toledo (with 84 percent) and Dayton (with 83 percent). The top 10 also includes Columbus, in sixth place, and Cleveland, in eighth place. In both areas, 81 percent of the homes are affordable for the middle class. The remaining markets in the top 10 are Gary, Ind.; Columbia, S.C.; Detroit; Little Rock, Ark.; and Rochester, N.Y.

The Cincinnati area came close to making the top 10. It occupied 13th place, out of 100, with 80 percent of the homes affordable to the middle class.

But if Ohio is the hero, then the villain is definitely California. Seven of the 10 least affordable markets are located in the Golden State. San Francisco occupies first place with only 14 percent of its homes affordable for the middle class. It is followed by Los Angeles (23 percent) and Orange County (24 percent). San Diego, Ventura County, San Jose and Oakland are the other California markets on the list. That list also includes two East Coast markets, New York and Fairfield County, Conn., as well as Honolulu.

According to Trulia, middle-class affordability will continue to worsen in the nation’s most expensive markets.  It’s not expected to improve in the long term without any new construction.

Chart: Trulia

Developers Plan to Break Ground This Fall of Phase I of Intesa

10 May 2014, 4:04 am

By Adrian Maties, Associate Editor

In March 2012, University Circle Inc., a nonprofit corporation established in 1957, announced it had hired the Coral Co. of Cleveland and Panzica Construction Co. of Mayfield Village to develop the mixed-use Intesa, one of the largest such projects to be constructed in Cleveland’s University Circle neighborhood. Groundbreaking was scheduled for early 2013, but the project was delayed and many people started to wonder if it would ever happen. But its time has come.

The Cleveland Plain Dealer recently reported that after spending the past year renegotiating its deal with University Circle Inc. and redesigning the buildings, the development team plans to start work this autumn on the first phase of the project.

The Intesa will be developed on Lot 45, a surface parking lot with 200 spaces at the edge of University Circle and Little Italy, a crucial piece of real estate in University Circle. Originally, the project called for the construction of buildings ranging from eight to 12 stories, more than 100,000 square feet of offices, 96 apartments, retail, a 700-car garage and even student housing.

The reconfigured project features all the same elements, but the buildings have changed location on the site. The apartments will sit at Mayfield and Circle, the offices will move to the east and the parking garage to the north to make it more accessible from Euclid Avenue.

This fall, Coral and Panzica plan to start construction on almost 200 apartments as well as the 700-space parking garage. There will be a single residential tower, with three types of apartments: traditional apartments, micro-suites and 13 two-story, townhouse-style penthouses. Units will range in size from less than 300 square feet to 1,900 square feet, with rents going from $600 to $3,000 per month. The apartments and the parking garage are expected to open in the spring or summer of 2016. The 11-story office building will be constructed in the second phase of the project, once it has tenants lined up.

The award-winning Bialosky + Partners Architects designed the Intesa. The entire project is expected to cost between $100 million and $110 million.

Photo credit: Bialosky + Partners Architects.

Developers Break Ground on $272M, 600-Room Hilton Cleveland/Downtown Convention Center Hotel

2 May 2014, 6:28 pm

By Adrian Maties, Associate Editor

Cleveland is getting ready to say hello to a new skyscraper. On April 28, ground was broken on the new Hilton Cleveland/Downtown Convention Center Hotel, a massive structure standing 32 stories tall. Cuyahoga County Executive Ed FitzGerald and Cleveland Mayor Frank Jackson joined Ted Ratcliff, senior vice president of operations for Hilton Worldwide, for the groundbreaking ceremony.

The new hotel will feature a 28-story tower with 600 hotel rooms, positioned atop a four-story podium of ballrooms, meeting space, retail and the hotel’s lobby. Amenities include approximately 55,000 square feet of meeting space, a restaurant, a lobby bar, a rooftop bar, an indoor pool and a fitness center. The hotel will also have underground connections to both the Cleveland Convention Center and the Global Center for Health Innovation.

The cost of the project is $272 million. The Hilton Cleveland/Downtown Convention Center Hotel will be constructed on the site of the demolished Cuyahoga County Administration Building, right in the heart of downtown. Cooper Cary, an Atlanta-based architectural firm, designed the project. It is being constructed by Turner Construction Co., Ozanne Construction Co. and Van Aukin Akins Architects. Hilton Hotels & Resorts will operate the hotel.

According to Cuyahoga County, the hotel’s construction will employ 25 percent small businesses, 7 percent female-owned businesses and 15 percent minority-owned businesses. Cuyahoga County and Turner Construction also plan to meet or even exceed residency goals for employees hired during the construction project, including 40 percent Cuyahoga County residency and 20 percent city of Cleveland residency.

Scheduled to open in 2016, the new hotel is expected to create 2,800 jobs construction jobs and 450 full-time jobs.

Photo credits: Cuyahoga County

Local Investors Buy Historic Aurora Inn, Plan Full Renovation

25 Apr 2014, 4:36 pm

By Adrian Maties, Associate Editor

A group of local investors has acquired the historic Aurora Inn. Led by Dan Bliss, Stephen Mansfield and Matt Lopatin, Aurora Hotel Partners LLC plans to invest into this well-known fixture in the center of Aurora’s historic district and give it a full makeover.

The Aurora Inn was built in 1927, on a site that was a stagecoach stop in the 1800s. A fire burned the hotel down in 1963, and it was rebuilt and reopened the following year. Nowadays, the Aurora Inn includes 69 rooms, a restaurant, indoor and outdoor pools, and conference facilities.

The current ownership plans to breathe new life into the historic property at the intersection of Routes 82 and 306 through a renovation of its rooms, restaurant, bar, lobby, ballroom and pools. The renovated Aurora Inn will feature 67 rooms, including three suites, a restaurant, patio dining, a bar, an indoor pool, an outdoor pool, a spa, a fitness center and an outdoor event/wedding space.

HGTV celebrity designer Genevieve Gorder has been hired to oversee the design of the hotel. She will work closely on the project with Cleveland-based architect David Krebs of AODK. The new owners have also retained the Riley Hotel Group, an award-winning management company based in Medina, to manage the hotel.

Bliss, CEO of the Bliss Venture Group, was born in Aurora. He believes the historic hotel can can serve the region’s unmet demand for quality food, atmosphere and event spaces. “For many years, the Aurora Inn was known as a destination for great food and a vibrant bar. Sadly, that was lost over the years. We expect to turn that around and restore the hotel’s stature in Northeast Ohio,” Bliss said in a statement for the press.

“Thousands of people have attended weddings and events at the Aurora Inn, or they’ve dined with their families, or they’ve been members at the pools. There are so many memories here. Our team will restore the Aurora Inn in a way that pays respect to its long history, while also providing guests with the modern amenities of a luxury hotel,” Mansfield added.

Photo credits: AuroraInnOhio.com

Akron’s Newest Luxury Student Housing Community to Open in August

19 Apr 2014, 4:13 am

By Adrian Maties, Associate Editor

In May 2013, the Cleveland-based NRP Group, one of the largest multifamily developers in the nation, started work on a 624-bed, four-story luxury student housing community in Akron. Called the Depot, the project is now nearing completion. It is scheduled to open for residents this August.

The Depot is located at 80 East Exchange St., just across the street from the campus of the University of Akron. It offers 624 one-, two-, three- and four-bedroom units, as well as a host of amenities including a resort-style heated pool, lounge areas, an on-site concierge, a modern clubroom, an on-site mini market, an indoor gas fireplace, a game room, a media lab, a conference room, group study areas, a large group fitness classroom and two state-of-the-art fitness facilities.

Units range in size from 592 to 1,386 square feet. They come equipped with granite countertops, in-unit washer and dryer, walk-in closets, contemporary furnishings and a 42-inch flat screen television. The units are all leased by-the-bed. This means each resident will only be responsible for his or her individual rent.

The Depot is managed by Asset Campus Housing, a leader in the management and development of student housing facilities nationwide. The Houston-based company is also in charge of finding residents. Leasing started last August, and since then the Depot has generated significant interest. The one-bedroom units are completely sold out.

The NRP Group is developing the Depot on the site of the old Akron Beacon Journal newspaper storage and sorting facility. It invested $30 million in the project. Together with other important projects, such as the $200 million expansion of the Akron Children’s Hospital campus, it has significantly improved downtown Akron.

Aaron Pechota, vice president of development at The NRP Group, gave assurances that the new community will open on time. “We look forward to welcoming The Depot residents into their new home come August,” he added.

Photo credit: The Depot

Developers Plan $130M, 28-Story Apartment Tower in University Circle

14 Apr 2014, 6:14 am

By Adrian Maties, Associate Editor

Cleveland is getting ready to say hello to a new residential tower, the first to be developed in the city in more than 40 years. The new high-rise will cost $130 million and will be located in the city’s University Circle neighborhood.

University Circle Inc. has partnered with two local developers, Mitchell Schneider of First Interstate Properties and Sam Petros of Petros Development, for the project, called One University Circle. Their plans call for the construction of a 25- to 28-story building, with about 280 units. Work is expected to start in the summer of 2015, with the first units ready for occupancy in mid-2017.

The apartments will range in size from 720 to 4,200 square feet. They will feature floor-to-ceiling windows and will offer residents views of the city skyline and Lake Erie. One University Circle will include such amenities as concierge services, a fitness center, an indoor pool, a green rooftop, an entertainment theater/gaming room and lounges.

Councilwoman Mamie Mitchell described the project as ”good news for University Circle and good news for Cleveland.” In a news release, she said One University Circle “will generate multiple benefits for University Circle and Cleveland. It’s going to add a new component to the neighborhood, offering residents a new housing option and bringing additional economic diversity and benefits to the neighborhood. This is going to be another gem in this jewel-filled neighborhood that helps to define Cleveland.”

“One University Circle will provide a quality urban design solution that meets a market demand, brings greater density to University Circle and supports neighborhood businesses with new residents. We believe this project will continue the momentum of University Circle and the renaissance underway in Cleveland – from downtown to University Circle along the Euclid HealthLine. One University Circle will be a welcoming gateway to the institutions of University Circle and a home for their employees coming from all over the world,” Chris Ronayne, president of University Circle Inc., added.

The project will feature green-building principles. One University Circle will be constructed on a site mostly owned by University Circle Inc. However, a portion of it is occupied by the Children’s Museum of Cleveland. University Circle Inc. has been working together with the museum to find it a new location in Cleveland, one that will better accommodate its plans to expand.

Photo credits: Google Maps

Akron Children’s Hospital Celebrates Topping Out of New Critical Care Tower

7 Apr 2014, 4:36 am

By Adrian Maties, Associate Editor

Akron Children’s Hospital first announced plans to build a $200 million expansion of its downtown Akron campus in the summer of 2012. Called Building on the Promise, the project broke ground on May 30, 2013. Just a few days ago, it reached another important milestone.

On April 2, Akron Children’s Hospital held a topping-out ceremony to celebrate the project reaching its highest point without loss of life or serious injury. Construction crews hoisted the traditional evergreen tree and American flag to the top of the new seven-story building to symbolize growth and to bring good luck.

Building on the Promise is Akron Children’s first major project in more than two decades and will help the hospital keep up with an increase in patients and services. The centerpiece of the project is the 300,000-square-foot critical-care tower. Located on the west side of the campus, at the intersection of Locus and Exchange streets, it will feature a new 100-bed neonatal intensive care unit, new emergency department, outpatient surgical suites and an enclosed concourse that takes patients and staff from the new six-level, 1,250-space parking garage to the new building and beyond into the existing hospital.

Plans also call for the renovation of the Ronald McDonald House on the hospital’s campus. It will expand from 20 to 60 rooms for families receiving treatment at the hospital.

The new building is expected to open as early as March 2015. It will have a LEED for Healthcare Silver certification, reflecting its environmentally responsible and resource-efficient status. Between 175 and 200 people will be employed in the new critical care tower.

The project is funded through donations and a combination of public financing and the use of the hospital’s internal reserves. Akron Children’s is looking to raise $50 million for the critical care tower and $10 million for the Ronald McDonald House expansion. At the start of March, the hospital announced that more than $25.2 million has been raised so far. A public fundraising campaign will launch this fall.

Photo credits: Akron Children’s Hospital


American Greetings Prepares to Start Construction on New HQ, Crocker Park’s Third Phase

1 Apr 2014, 4:21 am

By Adrian Maties, Associate Editor

American Greetings Corp. has taken another important step toward moving from Brooklyn, Ohio, to Westlake’s Crocker Park. Along with Stark Enterprises and the city of Westlake, the greeting card company last week finalized the transaction to relocate its world headquarters.

American Greetings announced its intention to move to Westlake in May 2011. Work on the new building was scheduled to start by 2012, with the company expecting to move in this year. However, the project encountered some problems along the way. American Greetings put its plans to move on hold in November 2012 while it considered a buyout offer from the Weiss family.

But the project won’t be delayed anymore. Construction on the new, 650,000-square-foot facility is scheduled to begin this September. American Greetings plans to move into the new headquarters in spring 2016.

Called Creative Studios, the new facility is part of the third phase of Crocker Park, along with more than 300 rental apartments, a hotel and over 220,000 square feet of retail and restaurants. According to a statement from American Greetings, Stark Enterprises will start work on Crocker Park’s third phase in early April. New tenants are expected to begin opening in the summer of 2016. The combined project will provide an important economic boost for the city of Westlake. Costing between $350 million and $400 million, it will create thousands of jobs.

“Projects of this magnitude require foresight and tremendous partnership, and we want to thank all of those involved for making this project a reality,” said Elie Weiss, president of American Greetings real estate, in a statement for the press. “We would like to specifically recognize the role that Jobs Ohio and the city of Westlake have played in bringing this project to fruition.”

Robert Stark, president & CEO of Stark Enterprises, said the announcement was “the result of 15 years of doggedly pursuing making Crocker Park the best example of a mixed-use community core development anywhere.”

“The city of Westlake is excited that this important step is complete and looks forward to continuing to work with American Greetings as they establish their new world headquarters,” added Michael Killeen, president of Westlake City Council. “These joint efforts of all parties will also ensure the completion of Crocker Park in becoming an even more outstanding place to live, shop, work and play.”

Photo credit: Stark Enterprises

Value Place Reopens Cleveland-Area Hotels Following $500,000 in Renovations

24 Mar 2014, 4:50 pm

By Adrian Maties, Associate Editor

Value Place, a U.S. extended-stay hotel chain, recently completed the renovation of two of its Cleveland-area hotels, in Akron and Mentor. The hotel brand has spent $500,000 for each of the two renovation projects.

The Akron hotel is located at 3325 Fortuna Drive. The four-story 121-room property is  just a short drive south of downtown Cleveland and is accessible from exit 120 off Interstate 77. The Mentor hotel is located near First Energy Stadium, at 5650 Emerald Court, and features 119 rooms on three stories. Both hotels are located in amenity-rich areas.

Value Place said the renovations were inspired by guest feedback and competitive offerings. The two hotels now feature upgraded lighting, beds and TVs. Also, guests now have high-speed, wireless Internet access. The renovations are part of the company’s national effort to enhance corporate- and franchisee-owned properties.

“Enhancing our current properties is a great way to improve our guest experience,” Value Place COO Kyle Rogg said in a statement for the press. “We already meet the ‘needs’ of budget-conscious guests. These upgrades answer the ‘wants.’”

Value Place was founded by renowned hotelier Jack DeBoer in 2002. It currently operates 10 hotels in the state of Ohio, three of which are located in the Cleveland area, in Mentor, Avon and Akron-Green. Last year, the hotel brand announced plans to build six more extended-stay hotels in Greater Cleveland. They will be constructed over the next three years, with the first hotel expected to cost $6 million.

Photo credits: Value Place

City of Cleveland Selects Lakefront Developers

18 Mar 2014, 3:37 pm

By Adrian Maties, Associate Editor

Cleveland’s lakefront has seen little major construction since the late 1990s. But that’s about to change. Last week, Mayor Frank Jackson’s Lakefront Development Advisory Committee selected a developer for the 28 acres at the water’s edge. The project is expected to breathe new life into the area and provide an economic boost for the city.

After months of interviews and proposals, the committee picked a development team out of the four interested in building up Cleveland’s lakefront. Based on recommendations from the committee, Mayor Jackson will now start negotiations with the development group which includes the Dallas-based Trammell Crow Co. and Cumberland Development LLC, a local commercial real estate company led by Richard Pace.

The Trammell Crow/Cumberland team proposed a mixed-use project to be developed in three phases. It was similar to the Cleveland Downtown Lakefront Development Master Plan passed by the city planning commission in May 2012.

Phase I calls for the construction of an office, retail and residential development on Dock 32, as well as restaurants and retail space between the Rock & Roll Hall of Fame and the Great Lakes Science Center and along the East 9th Street Pier. Phases 2 and 3 include the development of apartments and public waterfront amenities on Docks 30 and 28B.

No timeline for the project or construction costs have been announced so far. Before construction can start, the developers and the city still have to hammer out the finer details of the deal. The developers will also have to sign a long-term lease with the city for the land.

“Development of the lakefront is important for the continuing economic growth of our city as well as providing amenities for residents and visitors to enjoy,” Mayor Jackson said in a statement for the press. “I thank the Lakefront Advisory Committee members for their hard work in reviewing the submissions and their recommendation of Trammell Crow and Cumberland who have exceptional development skills, a willingness to invest, and a shared vision for a lively waterfront and I look forward to taking the next steps in the process.”

Photo credits: www.clecityhall.com

Noble Investment Group Buys Four Residence Inn by Marriott Hotels in Greater Cleveland

10 Mar 2014, 8:56 pm

By Adrian Maties, Associate Editor

Noble Investment Group last week announced the acquisition of four Residence Inn by Marriott hotels in the greater Cleveland metro area. The Atlanta-based company did not disclose how much it paid for the properties.

According to Noble’s website, the four properties include the 175-room Residence Inn Cleveland Downtown, the 174-room Residence Inn Cleveland Beachwood, the 118-room Residence Inn Cleveland Independence and the 96-room Residence Inn Cleveland Mentor. They all feature large suites with full kitchens and offer complimentary hot breakfast, Wi-Fi, grocery delivery service and other amenities. Noble also announced plans to upgrade and redesign the properties to enhance the guest experience. The Residence Inn by Marriott brand is a top choice for guests seeking affordable, upscale accommodations when traveling for an extended period.

“Given the robust demand growth in the Cleveland MSA, Noble believes there is significant opportunity to maximize asset performance with renovations targeted toward enhancing the guest experience. With a going-in cap rate of approximately 11.5 percent on trailing 12-month income, this portfolio represents an attractive combination of in-place yield, considerable income upside and a basis that is well below replacement cost,” said Noble principal Ben Brunt in a statement for the press.

Marcus & Millichap reports that the hospitality market in the Midwest, a region that encompasses Illinois, Indiana, Michigan, Ohio and Wisconsin, performed well in 2013 and that it is expected to continue on the same path in 2014. Business travel remains a primary driver of the hotel sector’s performance, and Cleveland has no shortage of businesses. The city has emerged as a global leader in healthcare, biomedical engineering and technology, home to many important companies. Also, Ohio’s Utica Shale is fast becoming an important driver of economic activity in the region. As households regain the wealth lost during the recession and as the job market becomes more stable, leisure demand will also improve, leading to increased performance.

Photo credit: Marriott.com


Victory Center Prepares to Receive Tenants in Health-Tech Corridor

3 Mar 2014, 10:14 pm

By Adrian Maties, Associate Editor

What was once a vacant building is about to be launched as a mixed-use complex. Garson Victory LLC,  a partnership led by real estate broker Scott Garson, redeveloped 7012 Euclid Ave. after purchasing it in late 2010 for $2.7 million. The result was Victory Center, a complex featuring offices, labs and research facilities and now ready to welcome tenants.

According to real estate website PropertyShark, the four-story building was constructed in 1917. It occupies 3.3 acres of land in the core of Cleveland’s Health-Tech Corridor and offers 165,965 square feet of space.

Garson Victory worked on the project with a local development team including Domokur Architects, on project and construction services; Partners Environmental Consulting; historic consultant Heritage Consulting; LEED consultant HLMS Sustainability Solutions; and NAI Daus. It also collaborated with the city of Cleveland and the state of Ohio.

The developers used tax credits to finance the renovation of the building’s core and shell. The  project received a $4.2 million Historic Tax Credit Award from the state of Ohio in December 2011. It will generate another projected $3.7 million in Federal Historic Tax Credits. Huntington National Bank will finance tenant improvements and other project-related costs.

The total cost of the project was $26.6 million. It delivered a LEED Silver-certified building, ready to house Cleveland’s growing incubator and accelerator growth-stage companies, biomed and tech businesses. Local stakeholders such as BioEnterprise Inc., Jumpstart Inc., Magnet Inc. and Global Cardiovascular Innovation Center are working to attract business tenants to Victory Center.

“The goal of this space is to give local companies room to grow,” Scott Garson, developer and investment partner, said in a statement for the press. “It’s a prime location for occupants to capitalize on Cleveland’s increased investment in tech and biomed businesses, where they can leverage a wealth of local resources and support.”

Photo credits: www.victorycentercleveland.com

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