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A New Tower in the Works for University Circle

28 Aug 2015, 7:34 pm

By Adrian Maties, Associate Editor

Cleveland Third Quarter Marcus & MillichapIn the hot Cleveland multifamily market, two developers are looking to build a new apartment tower. The project could be the first new high-rise apartment construction in the city since the 1970s.

Mitchell Schneider of First Interstate Properties and Sam Petros of Petros Development Corp. are the two developers behind the $112 million project called One University Circle. They first announced their plans last year, when they joined forces with University Circle Inc., a development, service and advocacy organization responsible for the growth of the University Circle neighborhood. At that time, the project called for the construction of a 28-story tower with about 280 units on the site of the Children’s Museum of Cleveland.

According to the Cleveland Plain Dealer, the two developers filed plans with the city this week for One University Circle. Some things have changed since last year but, although the tower will now only have 20 stories, it will still have the same number of apartments, most of which will be one and two-bedroom floor plans. There will also be some three-bedroom units, studios and even penthouses.

The Plain Dealer also reported that the project is scheduled to go before the city’s Planning Commission on Friday, September 4. If everything goes according to plan, the first apartments at One University Circle could open in October 2017.

In a recently released report for the third quarter of 2015, Marcus & Millichap said that apartment vacancies in the Cleveland area dropped to 3.5 percent at the end of Q2 and, in spite of the new construction, are expected to go down even more this year to 3.4 percent, one of the lowest levels in the country. As a result, average effective rents will rise to $830 per month, a 2.4 percent increase year over year. They will end the year more than 20 percent above the recession low seen in early 2009.

Photo credit: Marcus & Millichap



Chicago Investor Buys Fully Leased Facility in Akron

24 Aug 2015, 2:40 pm

By Adrian Maties, Associate Editor

1331 Kelly Ave.

1331 Kelly Ave.

A Chicago-based private real estate investment firm has expanded its portfolio this month with the acquisition of an industrial facility in Akron, Oh. Brennan Investment Group has purchased the building at 1331 Kelly Ave., which serves as the headquarters and sole manufacturing facility for Landmark Plastic Corp., a leading manufacturer of thermoformed and injection molded products for the horticultural industry.

According to PropertyShark, the five-story, 200,000-square-foot industrial building opened in 1994. The real estate website also says that the property’s current market value is about $7.4 million and that it previously changed hands in 2006, when Stag II Akron LLC purchased it from Keystone Opal LLC & Stag II Akron LLC for $1.75 million.

Although Brennan did not disclose how much it paid for the building, Summit County property tax records show that a limited partnership formed by the Chicago-based company purchased the property for $9.2 million. Robert Vanecko, Brennan’s managing principal and the head of its single-tenant, net lease division, also said in a statement that the acquisition “was funded through our $300,000,000 net leased joint venture with one of Arch Street Capital Advisors’ institutional clients.”

“We are pleased to complete the acquisition of 1331 Kelly Avenue, located in the Southeast submarket of Cleveland. The Cleveland market has demonstrated strong fundamentals, evidenced by 14 consecutive quarters of positive net absorption year-to-date, and an overall occupancy of 94.3 percent,” added Kevin Brennan, vice president of acquisitions.

Brennan buys, develops, and operates industrial properties in select major metropolitan markets throughout the United States. Since 2010, it has acquired over $1 billion in industrial real estate. The company’s portfolio currently encompasses nearly 22 million square feet of space in 22 states.

Photo credit: Brennan Investment Group



Investor Duo Expands in Northeast Ohio

24 Aug 2015, 2:36 pm

By Adrian Maties, Associate Editor

6800 Arnold Miller Parkway

6800 Arnold Miller Parkway

A prominent investor duo has recently acquired another property in Northeastern Ohio. Chris Semarjian of Industrial Commercial Properties and Stuart Lichter of Industrial Realty Group are now the new owners of the former L’Oreal distribution center in Solon.

The 195,000-square-foot facility is located on a 42-acre site at 6800 Arnold Miller Parkway. It opened in 1993 and served for many years as Matrix Essentials’ national distribution center. After L’Oreal acquired Matrix, they relocated the operation to Streetsboro.

Although the two investors did not reveal how much they paid for the world-class property, Cuyahoga County land records show that it changed hands for $4.9 million. According to PropertyShark, the asset’s current market value is $6.5 million.

Semarjian and Lichter are well known throughout the United States for their ability to purchase large-scale facilities and repurpose them for new tenants. The two said that the Solon distribution center, which is one of their smaller properties, will likely become home to a single tenant.

“We are very excited about the potential of this building.  There is really nothing like it in the market,” Chris Semarjian said in a statement. ”It is a flexible building that can be used for warehousing or manufacturing. We also have up 20 acres of surplus land that can be used for expansion or development.”

“We are experiencing strong growth in the region,” Semarjian added.  “We are continuing to make advantageous acquisitions, while filling our vacancies faster than ever. We are also seeing rental rates climb in the more mature markets.”

Together, Semarjian and Lichter own and operate over 70 properties with more than 40 million square feet of space in Ohio.  Notable projects include Goodyear, Lockheed Martin, Hoover, American Greetings, and Randall Park Mall.

Photo credit: Industrial Commercial Properties



Canadian Investor Buys Another Historic Cleveland Hotel

14 Aug 2015, 9:49 pm

By Adrian Maties, Associate Editor

Renaissance Cleveland

Renaissance Cleveland

Downtown Cleveland’s historic Renaissance Hotel is about to change owners. Skyline International Development Inc., a Toronto-based hotel owner and developer, announced this week that it has entered into an agreement with a company controlled by CTF Holdings Ltd. to buy the property for a hair under $20 million.

JLL brokered the deal. Skyline said it competed against three other bidders for the hotel. The Renaissance Cleveland represents the Canadian company’s third acquisition in the U.S. and the second in the Cleveland market. Skyline also purchased the historic Arcade building for just under $7.7 million in 2011.

The 491-key Renaissance Cleveland was constructed in 1918. It occupies nearly 1 million square feet of space and includes 15,000 square feet of penthouse space, 68,000 square feet of state-of-the-art meeting space, several restaurants, 10,000 square feet of commercial space, and parking for 304 vehicles. Skyline said that it intends to start work on a multi-million-dollar renovation of the property once the deal closes in October 2015. The Renaissance Cleveland is currently managed by Marriott Corp.

“Throughout our near 20-year history, Skyline has made substantial investments into other historic hotels and resorts and we will do the same with this acquisition,” Gil Blutrich, president and chairman of Skyline, said in a statement. “We will renovate this landmark hotel, by instituting our world-class asset management strategy, maximizing client retention and applying our management expertise to streamline operations, cut waste and provide a superior level of customer service.”

“Our goal is not to re-brand or reposition the hotel — there is tremendous value behind its heritage and we want to not only preserve that, but to convert it into an efficiently run enterprise that will meet our aggressive short-and long-term goals in occupancy and customer satisfaction,” Michael Sneyd, Skyline’s CEO, added.

Photo credit: Skyline International Development Inc.



Huge Win for Huge Greater Cleveland Development

7 Aug 2015, 7:08 pm

By Adrian Maties, Associate Editor

Pinecrest

Pinecrest

The $225 million Pinecrest mixed-use development southeast of Cleveland in Orange has landed a helping hand from a national investor. Lennar Commercial, an affiliate of Miami Beach-based Lennar Corp., made an initial investment of $17 million in the project.

The investment represents and advance from Rialto Capital, a real estate investment and asset management firm and sister company to Lennar Commercial, to the project’s development team, which is led by Fairmount Properties.  Other partners include the DiGeronimo family and Lewanski Development.

Construction crews have already started work on clearing the site for the development. Pinecrest is expected to open in 2017. It is rising on a 58-acre site near the Harvard Road and I-271 interchange, and will offer 90 new apartments, 400,000 square feet of retail and restaurant space, 150,000 square feet of office space and a 120-key hotel. The retail portion of the project will feature a number of upscale retailers such as Pinstripes, REI, Old Town Pour House and Silversport Cinema.

“It’s extremely gratifying to see the potential we knew in Pinecrest affirmed by an accomplished national investor with such deep industry expertise,” said Randy Ruttenberg, founder of Fairmount. “After years of careful and strategic planning, the team is thrilled to gain this commitment from Lennar Commercial. Their investment is not only a huge win for Pinecrest, but for the region.”

Photo credit: Fairmount Properties







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