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Four Northeast Ohio Projects Get Historic Tax Credits

3 Jul 2015, 4:45 am

By Adrian Maties, Associate Editor

As June ended, four more Northeast Ohio real estate projects received assistance from the state. This time, the funds were Ohio State Historic Preservation Tax Credits.

On June 30, the Ohio Development Services Agency (ODSA) awarded a total of $27.5 million in historic tax credits to 19 applicants looking to rehabilitate 33 historic buildings throughout the state. About $7.75 million went to the four Northeast Ohio projects, with three of the projects located in Cleveland. These are the $60 million conversion of the Leader Building, the $2.4 million conversion of the Gund Brewing/Scott Drug Building and the $16 million rehabilitation of the Stuvesant Motor Company Building. The fourth, in Akron, is the $12 million conversion of the United Building.

The Leader Building got the largest portion of the funds, with $5 million. The money will help the K&D Group transform the 15-story downtown Cleveland property into 234 apartments, with retail on the first floor and offices on the second and third.

The other two Cleveland projects will also bring apartments to the city. The Stuyvesant Motor Company Building will have 42 market-rate apartments, while the Gund Brewing/Scott Drug Building will only have five. The ODSA awarded $877,438 to the first project and $249,999 to the second.

The Akron project received $1.6 million in tax credits. It calls for the redevelopment of the United Building, which currently functions as office space, into a hotel with 65 rooms.

Developers are not issued the tax credits until they complete their projects and all program requirements are verified. According to the ODSA, the awards will not only help them rehabilitate historic buildings, many of which are currently vacant, but also generate economic activity. The agency expects the 19 projects to leverage almost $279.4 million in private investments.

So far this year, the Ohio Historic Preservation Tax Credit program has completed 100 projects in 28 Ohio communities. They rehabilitated 120 historic buildings, created 3,439 housing units and generated more than $1.4 billion in investment.

Cleveland Residential Projects Receive Low-Income Housing Tax Credits

23 Jun 2015, 7:07 pm

By Adrian Maties, Associate Editor

Two developers plan to start work on three affordable housing projects in Cleveland. And they’ll do it with the help of the state.

Last week, the Ohio Housing Finance Agency announced the recipients of the 2015 Housing Tax Credit program awards. More than $30 million in federal housing tax credits went to a total of 40 projects. The recipients were selected out of a list of 103 applicants seeking to receive approximately $77 million in credits.

Three of the 40 projects are located in Cleveland. They are being developed by the Detroit Shoreway Community Development Organization and Cleveland Housing Network. Together, they will bring more than 160 units with affordable rents to Cleveland’s Clark-Fulton, Hough and Euclid Green neighborhoods.

The Detroit Shoreway project is named The Lofts at Lion Mills. It calls for the conversion of the former Lion Knitting Mills Building, a mostly vacant structure developed in 1919 at the intersection of West 25th  Street and Meyer Avenue, into an apartment community with 36 loft-style units. There will be 21 one-bedroom units and 15 two-bedrooms. Amenities include 18 parking spaces, a laundry facility and community rooms. According to Crain’s Cleveland, the project is expected to cost $9 million.

Cleveland Housing Network is the developer of the remaining two projects, called Hough Heritage and Emerald Alliance IX. The first will be an apartment community for the elderly. It will be located on a site on East 97th Street and will feature 60 affordable units. The second project will be developed at 17704, 17710, 17716 and 17722 Euclid Ave. It will feature 66 one-bedroom units, each one fully furnished and equipped with a bath, kitchen and storage. Emerald Alliance IX will provide housing for formerly homeless and low-to-moderate-income households.

OHFA has reserved $662,984 in credits for The Lofts at Lion Mills, $917,146 for Hough Heritage, and $906,705 for Emeral Alliance IX.

Massive Cleveland Historic Building’s Massive Transformation

18 Jun 2015, 2:58 am

By Adrian Maties, Associate Editor

Cleveland Huntington BuildingMore details have come to light about the redevelopment of Cleveland’s former Huntington Building. On June 16, during a press tour of the historic building, the new owner revealed that it intends to convert the mammoth structure into a mixed-use property.

Newmark Grubb Knight Frank announced last week that Florida-based Hudson Holdings LLC purchased the property at 925 Euclid Ave. from Optima925 LLC, for $22.5 million. The new owner now plans to start work on a renovation worth more than 12 times what it paid for the historic office building. The total cost of the project is $280 million.

According to The Plain Dealer, the renovation project will create 550 new apartments, with hotel-style services for tenants, 300 hotel rooms, 200,000 square feet of retail space, a lobby open to the public once more, and a rooftop restaurant and club. The property will also have 400,000 square feet of office space, a lot less than the 1.4 million square feet it has now. This might be a good thing, as the building is currently only 8 percent occupied.

During the press tour, Andrew “Avi” Greenbaum, a founder & principal of Hudson Holdings, said that the $280 million renovation will preserve the history of the building and will not include exterior changes. He added that his company hopes to start work in the first quarter of 2016. But before this can happen, the developers still have to put together financing and obtain various permits. The project is expected to be completed no later than 2018.

Photos courtesy of Newmark Grubb Knight Frank.

Florida Developer Takes on Redevelopment of Guerin-Decorated Office Building

16 Jun 2015, 3:00 am

By Adrian Maties, Associate Editor

The Huntington BuildingOne of Cleveland’s historic buildings is now under new ownership. The Huntington Building is not only one of the largest multi-tenant office buildings in the city but also one of the largest such properties in the state of Ohio.

On June 10, commercial real estate advisory firm Newmark Grubb Knight Frank announced that Optima925 LLC sold the office property at 925 Euclid Ave. to a Florida-based developer, Hudson Holdings LLC. The price of the transaction was $22.5 million.

The Huntington Building was constructed in 1924 and last renovated in 1991. It has 22 floors and 1.4 million square feet of office space. In addition to masonry construction, ornate plaster cornice and detailed bronze work, the historic building also includes the largest bank lobby in the world, with four large murals by the artist Jules Guerin, Corinthian columns and a three-story barrel-vaulted ceiling. The Huntington Building was 8 percent occupied at the time of the sale.

The Huntington BuildingVice Chairman Terry Coyne SIOR, CCIM and Managing Director Richard Sheehan, both of NGKF’s Cleveland office, represented the seller in the transaction. The new owner has also selected NGKF as exclusive leasing agent and property manager for the historic building. Because of the massive size of the property, it represents one of the largest office management assignments in Ohio.

According to NGKF, Hudson Holdings now intends to start work on an extensive redevelopment of the building. More details about the project will be revealed during a press tour of the building on June 16.

“The sale and forthcoming redevelopment of the Huntington Building represents another noteworthy step in the resurgence of Downtown Cleveland,” Coyne said in a statement for the press. “A re-energized Huntington Building not only makes downtown Cleveland stronger, it further illustrates why Cleveland continues to receive the national attention it deserves. It is exciting that such a historically significant piece of real estate will be brought to its full potential and will once again take center stage.”

Photos courtesy of Newmark Grubb Knight Frank.

Finding Convenience in Northeast Ohio

15 Jun 2015, 3:24 am

By Adrian Maties, Associate Editor

Investor activity continues to stay strong in the Northeast Ohio retail market. After the acquisition of the Creekside Commons and Cedar Center North shopping centers by a joint venture of Inland Real Estate Corp. and Dutch pension fund administrator PGGM this spring, it’s now time for single-tenant retail properties to take center stage.

On June 8, Inland Private Capital Corp. (IPCC) announced the sale of a portfolio of 12 retail properties located in various cities in northeastern Ohio to an unnamed buyer. IPCC is part of the Oak Brook, Ill.-based Inland Real Estate Group of Cos., as is Inland Real Estate Corp. It facilitated the sale through a subsidiary on behalf of one of its 1031 investment programs. The gross sale price of the portfolio was $35.3 million.

Rahul Sehgal, chief investment officer of IPCC, said in a statement for the press that his company purchased the portfolio in November 2013. It now sold it at a premium to the original acquisition price as well as the investors’ purchase price.

The 12 properties are all 7-Eleven convenience stores. They are located in Akron, Brunswick, Chagrin Falls, Cleveland, Mentor, Painesville, Streetsboro, Stow, Strongsville, Twinsburg, Willoughby and Willoughby Hills. The portfolio totals approximately 30,000 square feet of space. Its properties have more than 14 years remaining on their original 20-year absolute triple-net leases.

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