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Hertz Group Acquired Major Office Tower in Cleveland

23 Sep 2015, 1:54 pm

By Adelina Osan, Associate Editor

Cleveland-based Forest City Enterprises, Inc. recently announced that it has sold a 321,000-square-foot Class A office building to Hertz Acquisition Group.

Skylight Office Tower

Skylight Office Tower

The Skylight Office Tower was acquired for $35.4 million. The 12-story building is conveniently located in downtown Cleveland and within walking distance from luxury hotels, restaurants and entertainment venues. The transaction is expected to generate net proceeds after commissions and closing costs of approximately $34.2 million.

“We’re pleased to complete this disposition and we remain focused on closing other targeted non-core asset dispositions,” said David LaRue, president & chief executive officer of Forest City, in a prepared statement. “As we sell non-core assets, we use proceeds to continue the significant progress to date on improving our balance sheet and debt metrics. Non-core dispositions also focus our portfolio on core products in the strongest urban markets.”

The Skylight Office Tower was opened in 1991, as part of the Tower City Center mixed-use complex in downtown Cleveland, with Forest City as the developer. The real estate company’s portfolio reaches $10.3 billion in consolidated assets.

Image courtesy of Hertz Investment Group

Ohio’s Tallest Building Up for Sale

15 Sep 2015, 1:58 pm

By Adrian Maties, Associate Editor

Key Center

Key Center

The tallest building in The Buckeye State is now on the market. Downtown Cleveland’s Key Tower is part of a three-property portfolio that its Atlanta-based owner hopes to sell late this year or early 2016.

Columbia Property Trust Inc. announced its intention to sell the three properties last week. In addition to the Key Center, the other two assets are the 653,000-square-foot 100 East Pratt in Baltimore and the 961,000-square-foot 80 Park Plaza in Newark. Columbia said that it expects to get between $900 million and $1 billion for both.

The 57-story skyscraper, which opened in the early 1990′s in Cleveland’s Public Square, will be sold alongside its adjoining Key Center Marriott. The entire complex offers 1.3 million square feet of office space, 400 hotel rooms and an underground parking garage for 900 cars. KeyBank is the property’s anchor tenant and has recently signed a 15-year expansion. Other tenants include the law firms of BakerHostetler, Squire Patton Boggs and Thompson Hine.

Columbia did not announce a price for the office-hotel complex it purchased back in 2005.

“Our focus is on generating long-term total shareholder returns with an emphasis on growing net asset value. We believe that the dramatic portfolio transformation we have accomplished since late 2011 has positioned us to better achieve those returns,” Nelson Mills, president & CEO of Columbia, said in a statement. “With these planned transactions, we will further reduce our exposure to non-target markets and generate substantial proceeds that will allow us to continue building a strong presence in our key markets, repay short-term borrowings, and make additional investments that add value – by repurchasing our stock and/or by sourcing acquisitions in key markets.”

The sale is part of Columbia’s strategy to focus on properties in more profitable markets. In 2011, the company held properties in 33 markets. Now, its portfolio includes properties in only 15 markets, including San Francisco, New York City, and Washington, D.C.

Photo credit: Columbia Property Trust Inc.

Home Furnishings Retailer Expands in Northeast Ohio

4 Sep 2015, 3:52 pm

By Adrian Maties, Associate Editor

Rendering of Arhaus' new HQ

Rendering of Arhaus’ new HQ

Home furnishings retailer Arhaus is growing in Northeast Ohio. The company has recently started work on a new world headquarters in the village of Boston Heights.

The more than $40 million project is expected to help accommodate the retailer’s expansion plans. Once finished, it will deliver a 770,000-square-foot facility on a 64-acre site at 51 East Hines Hill Road. At the length of approximately four football fields and the width of two, the new HQ will provide nearly three times more warehouse space than the company’s current warehouse at 7700 Northfield Road in Walton Hills, and two times more office space. It will house Arhaus’ growing product assortment as well as its 400 Northeast Ohio employees.

The new HQ will offer 650,000 square feet of warehouse space and 120,000 square feet of dedicated office space. It will also include a 15,000 square foot mock store for internal planning purposes only, a more sizeable sample room, an expanded photography studio and even space for other future expansions.

Arhaus is working on the project with Davison Smith Certo Architects and Premier Development Partners. In a news release, the company reported that the construction of its new HQ will require the following materials:

  • 18,000 yards of concrete
  • 2,405 tons of steel
  • 3,355 tons of precast panels
  • 26,150 tons of stone

If everything goes as planned, Arhaus expects to move into the new facility in March 2016.

“This is truly a monumental milestone not only for the business, but for me personally,” John Reed, CEO & chairman of the company, said in a statement. “My vision has always been to expand Arhaus into a nationally coveted brand. We continue to delight customers in existing and new markets and this new facility will help us continue to grow and continue to provide our customers with the best quality home furnishings to enhance their homes and lives. The timing is particularly poignant to me as we will move into this new facility in 2016, our 30th anniversary year.”

Photo credit: Arhaus

Transformative Development Takes Root in Independence

3 Sep 2015, 6:36 pm

By Adrian Maties, Associate Editor

The city of Independence, Ohio is planning something big. Having recently teamed up with Cleveland-based Fairmount Properties, the city intends to transform a plot of public land into a mixed-use district.

The project calls for the development of two city-owned sites totaling 33 acres of land. One is located on the north side of Rockside Road at Oak Tree Boulevard, while the other is at a former middle school on Brecksville Road. The city has already approved a series of plans for both sites, without disclosing the cost of the development.

Independence purchased the Rockside Road site in 2014 from Duke Realty Corp. for $2.5 million. Together with Fairmount, it now plans to turn the land into a walkable mixed-use district, with retail, restaurants and residences. Meanwhile, at the former middle school site on Brecksville Road, the two partners will build for-sale housing options that do not currently exist in the area. They will all be marketed to young professionals and ‘empty nesters’. The city of Independence revealed that the Brecksville Road site may also include a neighborhood retail center.

For now, Fairmount and the city said that they plan to focus on pre-development activities. The two entities hope to produce initial phases of the project by 2017.


Renowned Architecture Firm Relocates to Seven Hills

31 Aug 2015, 3:47 pm

By Adrian Maties, Associate Editor

Genesis Building

Genesis Building

The nationally renowned KA, Inc. architecture firm is leaving downtown Cleveland. The company announced last week that it intends to relocate just outside the city in Seven Hills.

KA, which currently occupies about 20,000 square feet of space in the Western Reserve Building at 1468 W. Ninth St., will move its 45 employees to the Genesis Building, at 6000 Lombardo Center. The Seven Hills property is owned by the Dalad Group, an Independence-based longtime client of the architecture firm. According to Crain’s Cleveland, KA will occupy about 14,000 square feet of space in its new home.

The move is scheduled for mid-December 2015. KA said in a statement that by relocating to a more centralized location in Northeast Ohio, it will be able to attract future employees from the Akron and Canton areas more easily, while also providing a convenient location for its current greater Cleveland staff.

The new office is being designed by KA itself and will be equipped with some of the latest technology and work spaces. The company’s employees will also have access to the Genesis Building’s amenities, including a shared board room, conference center and fitness facility.

Photo credit: KA, Inc.

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