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Value Place Opens New, 124-Room Hotel in Cleveland21 Oct 2014, 1:02 am
By Adrian Maties, Associate Editor
The newly constructed property is located at 20829 Emerald Parkway, close to the Hopkins International Airport. Value Place did not disclose the cost of the project. Although the hotel opened to the public on Oct. 10, the company said it will hold a ribbon-cutting ceremony on Oct. 23.
According to Value Place, extended-stay hotels are an appealing option for government employees, construction workers, business travelers and other people with jobs that require them to travel and stay for extended periods of time. The company’s new Cleveland hotel has 124 rooms, on four stories. It offers laundry facilities, free Wi-Fi, kitchens and many other amenities. On its website, Value Place says rooms in the hotel cost between $250 and $310 per week.
“This new hotel is conveniently located for our business travelers near the Hopkins Airport,” Kyle Rogg, president & COO at Value Place, said in a statement for the press. “As evident through our recent flurry of grand openings across the country, demand for economy extended-stay hotels is on the rise.” Value Place has nearly 190 hotels in 32 states.
According to Marcus & Millichap’s midyear hospitality report, hotels in the Midwest region—which consists of Ohio, Illinois, Wisconsin, Indiana and Michigan—are still on course to post stronger results in 2014, in spite of the severe weather that hindered travel early this year. Room demand in the area increased by 3.2 percent in the first half of 2014, with overall occupancy rising to 57.9 percent.
The state of Ohio saw an increase of 3.1 percent in room demand, and its occupancy also reached 57.9 percent. Marcus & Millichap predicts that by the end of the year occupancy in the Midwest will reach 59.9 percent.Photo credit: Value Place Charts courtesy of Marcus & Millichap
AkzoNobel Leases Space in Hackman Capital Partners’ Strongsville Facility11 Oct 2014, 6:00 am
By Adrian Maties, Associate Editor
AkzoNobel is opening a research-and-development center in the Cleveland area. The paints, coatings and chemicals company has recently leased space in a Class-A industrial facility located in Strongsville.
AkzoNobel’s new facility is located at 8220 Mohawk Drive and offers 77,500 square feet of space. The Dutch multinational will move a selection of its Performance Coatings businesses to the Strongsville building. It will be the new home of one of AkzoNobel’s global research and development centers focused on metal coatings.
CBRE’s Fred Herrera represented AkzoNobel in the transaction. George Stevens and David Ford, also of CBRE, represented the landlord, an affiliate of Los Angeles-based Hackman Capital Partners LLC.
“We’re excited to have AkzoNobel as a tenant and are thrilled we could accommodate their needs in Strongsville. We also appreciate the efforts of the city, which helped retain the company here,” David Smith, managing director of Hackman Capital, said in a statement for the press.
8220 Mohawk Drive is just one of 13 properties owned by Hackman Capital in the Cleveland area, and one of 78 in the state of Ohio. The company entered the Ohio market in July 2012, when it purchased a 2.8 million-square-foot industrial portfolio. A year later, it acquired another large portfolio from New York-based Square Mile Capital Management LLC. It totaled 2.56 million square feet of industrial space, including 1.6 million square feet in the Cleveland area.
In a news release, Hackman Capital said the Cleveland area properties were 76 percent occupied at the time of the acquisition, in mid 2013. Since then, the company has brought the occupancy rate up to 90 percent. The numbers include the AkzoNobel lease.
“We’ve had great success in Cleveland,” added Ben Struewing, Hackman Capital’s vice president of leasing, sales and acquisitions. “In just a year, we’ve executed 15 leases here—more than 129,000 square feet in new deals, 190,000 square feet in renewals and expansions—and we’ve sold three buildings totaling over 354,000 square feet, with another currently in negotiation.”
Photo credit: Hackman Capital Partners
Mentor Industrial Property Sold for $3.2M6 Oct 2014, 4:39 am
By Adrian Maties, Associate Editor
The property is located at 9470 Pinecone Drive. It was constructed in 1991 on approximately 10 acres of land, in the heart of the easily accessible Mentor Industrial Park. The 67,200-square-foot building offers several manufacturing amenities, including air conditioning, buss duct throughout the warehouse, heavy power, ability to expand, an epoxy floor, compressed air and external air exhausts. It also includes 17,500 square feet of office space. The building’s current tenant will relocate to Eastlake.
Terry Coyne and Kristy Hull, both with Newmark Grubb Knight Frank’s Cleveland office, represented the seller, while Mike Gatto, of Gatto Group Inc., represented the buyer. 9470 Pinecone Drive was on the market for less than 45 days before a purchase offer was made. According to PropertyShark.com, the transaction closed on Aug. 8, with the property trading for $3.2 million. KCS Pinecone Realty purchased it in 2004 for $2.1 million. PropertyShark.com also reports that the property’s current market value is approximately $1.9 million.
According to a second-quarter report from Newmark Grubb Knight Frank, the Cleveland industrial market posted its seventh consecutive quarter of positive net absorption, totaling 59,093 square feet. Thanks to the robust demand, the area’s vacancy rate dropped to 8.5 percent in the second quarter, while the average asking rent increased to $3.83 per square foot.
The largest transaction of the quarter was the sale of the American Greetings industrial park, in Brooklyn. This massive property was acquired by Industrial Realty Group, one of the largest commercial and industrial property owners in Ohio, for $15.5 million.
Photo credit: Newmark Grubb Knight Frank
Executive Insight: Michael Cantor, Allegro Realty Advisors6 Oct 2014, 4:10 am
American Greetings sold its world headquarters building in Brooklyn, Ohio, earlier this year, to Industrial Realty Group. Allegro Realty Advisors, the largest exclusive tenant representation and corporate services firm based in Ohio, facilitated the transaction. Allegro Managing Director & Principal Michael Cantor worked on the deal together with George Hutchinson, Allegro’s Director of Corporate.
Q: What led Industrial Realty Group to buy the massive American Greetings world headquarters facility?
A: Industrial Realty Group is a company that has established itself as a developer that buys and repositions large corporate real estate facilities. In fact, I believe that they are now the largest industrial property owner in Ohio, and certainly one of the largest in the United States. What they do is they buy a large facility that’s being underutilized, they break it into a multi-tenant facility, upgrade it and do some new development. And that’s what they plan for this new facility, as well.
Q: What are the terms of the deal?
A: The facility has more than 1.6 million square feet of space, and occupies more than 150 acres in Brooklyn, Ohio. The transaction closed midyear. Property records show that the purchase price was $15.5 million, so close to $10 per square foot. Also, American Greetings will continue to occupy space in the Brooklyn facility until their new Creative Studios headquarters facility is completed; their new facility is currently under construction in Westlake. While the construction process takes place, they have a lease agreement with Industrial Realty Group, and will remain in the Brooklyn building until they’re ready to move.
Q: American Greetings first announced its intention to move to a new location in 2011. Was it hard to find a buyer for the massive facility? How much interest did it attract?
A: We toured and evaluated the building with more than 10 industrial and office developers, and received proposals from three. Generally, my sense was that each of these groups was looking at the property from a similar standpoint as Industrial Property Group, which meant taking a 1.6 million-square-foot building and dividing it into smaller components that can be leased to multiple businesses.
Q: American Greetings announced its plans to move to the new location in the summer of 2016. Will finding tenants to replace it be a problem?
A: First of all, there are also a couple of third-party tenants occupying industrial spaces in the building. I believe that the building has potential and is marketable to office and industrial users. Allegro Realty Advisors was first engaged by American Greetings a few years ago to provide strategic corporate real estate advisory services, to help determine the most appropriate use for the property and the best approach to dispose of it. I think that our study, which we market tested with a number of office and industrial developers, really pointed in the same direction as Industrial Realty Group is now turning, which is that there is a market for office and industrial space and that this building should be a multi-tenant facility in the future.
Q: What does this deal mean for Brooklyn and the Cleveland area?
A: Brooklyn knew that American Greetings was planning to move to Westlake. The deal gives them some clarity about American Greetings’ plans to leave, and it also provides them now with a new partner to work with in Industrial Realty Group. It will help them develop a strategy to attract new businesses, jobs and a tax base for the city. The fact that American Greetings will continue to occupy space in the Brooklyn building until their Westlake facility is finished gives both Industrial Realty Group and the city of Brooklyn some time to attract businesses to refill this space.
Hyatt Place Cleveland/Independence Sold to Lone Star Funds as Part of 38-Hotel Portfolio29 Sep 2014, 4:02 am
By Adrian Maties, Associate Editor
The Hyatt Place Cleveland/Independence is changing hands. The Northeast Ohio property is one of 38 sites that Hyatt Hotels Corp. has agreed to sell to Texas-based Lone Star Funds for about $590 million.
Located seven miles south of downtown Cleveland, in the city of Independence, the hotel features 127 studio-style suites and 1,200 square feet of flexible meeting space. Amenities include a 24-hour fitness center, indoor pool, free Wi-Fi, complimentary parking and more.
The 38-property portfolio totals 4,950 rooms and includes another Ohio hotel, the Hyatt Place Cincinnati- Northeast, in Mason. Hyatt Hotels said it will enter into franchise agreements with Lone Star Funds as part of the sale. This means that all the hotels will keep their current Hyatt Place and Hyatt House branding. The transaction is expected to be completed this November, subject to customary closing conditions and approvals.
Aimbridge Hospitality LLC will manage the hotels. Over the next 24 months, Lone Star Funds will invest an additional $50 million to renovate and upgrade its new hotels.
“Hyatt utilized its strong balance sheet and industry expertise to launch the Hyatt Place and Hyatt House brands. We are now leveraging that brand equity to recycle capital while maintaining a long-term brand presence in multiple markets,” Steve Haggerty, global head of capital strategy, franchising and select service for Hyatt, said in a statement for the press. “We believe the renovations planned for the portfolio will help maintain the brands’ reputation as the leading brands in their segments, and we look forward to deepening our relationship with Lone Star and Aimbridge.”
This is the second large hotel portfolio to sell this month. NorthStar Realty Finance Corp. also recently announced it will buy a 7,000-room portfolio of upscale extended-stay and select-service hotels from Inland American Real Estate Trust for $1.1 billion.
Photo credit: independence.place.hyatt.com