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Cleveland: Downtown Office Development News

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His complaint is that Cleveland landlords aren't doing enough. He and others said that Cleveland is way behind other major cities and offering coworking opportunities.

 

Edit:  I just did a quick Google search on Cleveland coworking spaces and below is where they are. That's a pretty small number.

 

Edit2: I did a similar search on Pittsburgh, Columbus, Detroit and Cincinnati and all showed a similar number of dots on their maps. Now, of course, dots on a map don't say how many units are available at each dot so it's not really telling the full story.

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Edited by KJP
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58 minutes ago, Terdolph said:

The local economy is weak.  That is why the vacancy rate is high.

Weak? How

What vacancy rates are you discussing?

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The Class A vacancy rate is near 10 percent. That's a very good vacancy rate. The Class B and C rates are high because they are non-competitive with Class A properties downtown and especially in the suburbs.

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Looking forward to seeing more 2nd quarter reports. 

 

Meanwhile....

 

 

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7 minutes ago, Terdolph said:

So if the downtown Class A vacancy rate is below 10% why is this building going broke?

 

The article states that the building is 96% leased. The owner had trouble paying some repair bills, etc.

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On 8/23/2017 at 12:18 AM, KJP said:

AML RightSource is headquartered at 200 Public Square...

 

New York private equity firm invests in Cleveland-based AML RightSource

August 21, 2017

By SCOTT SUTTELL

 

New York private equity firm Clarion Capital Partners LLC on Monday, Aug. 21, announced it has made an investment in AML RightSource, a Cleveland company that provides clients with anti-money laundering, Bank Secrecy Act and financial crimes compliance services.

 

Specific terms of the investment, which closed last Friday, Aug. 18, were not disclosed. On the "About Us" page on its website, Clarion says it focuses "on equity investments in the range of $15-$50 million with enterprise values of $50-$200 million."

 

...AML RightSource has about 575 total full-time employees, including about 410 in Cleveland, according to the email.

 

MORE:

http://www.crainscleveland.com/article/20170821/NEWS/170829961/new-york-private-equity-firm-invests-in-cleveland-based-aml

 

OK, now this doesn't sound good....

 

Head of Cleveland-based firm buys Buffalo home for $1.4 million

https://buffalonews.com/2019/08/08/aml-rightsource-ceo-buys-1-4-million-buffalo-house/

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2 hours ago, KJP said:

 

OK, now this doesn't sound good....

 

Head of Cleveland-based firm buys Buffalo home for $1.4 million

https://buffalonews.com/2019/08/08/aml-rightsource-ceo-buys-1-4-million-buffalo-house/

 

I dunno--it says he is from Buffalo, and the firm already has 31 offices.  It also plans to expand to 50 nationally.   So hopefully Cleveland isn't going anywhere.  

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AML Rightsource also has offices at 200 Public Square. I wonder if they tried to expand downtown before choosing Highland Hills?

 

Growing tech firm snaps up full floor at East Side building

https://www.crainscleveland.com/real-estate/growing-tech-firm-snaps-full-floor-east-side-building

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Scrolling through the downtown Cleveland alliance website and their new “build it” icon I came across this graphic. 1 million square feet of office space? Seems suitable for a certain large downtown company?

image.jpg

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Old plan. New plan is for 400,000 sf of office. 

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A pretty compelling stat even if the factors behind it are complex....

 

 


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26 minutes ago, punch said:

what does "negative rent growth" meaning rents are less expensive year over year (function of supply / demand?) 

 

Could also mean a lack of quality office product which commands higher rents. Brokers have been noting that office tenants have been pursuing a "flight to quality" among office products. Yet the CBD market has only 3.165 million sf of "Trophy Class" office inventory and just 2.5 million sf of Class A inventory in a market with 15-20 million sf of office space (depends on the CBD boundaries). No one is building new Trophy/Class A office space because the rents aren't high enough to offset construction costs and there aren't enough subsidies (as with housing) to justify office construction. So the market is inactive.

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Downtown Cleveland getting a new Fortune 500 HQ

 

 

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24 minutes ago, KJP said:

Downtown Cleveland getting a new Fortune 500 HQ

 

 

Was this the big news you had been hinting about in the SHW thread?

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4 hours ago, freefourur said:

Was this the big news you had been hinting about in the SHW thread?

 

No 😄

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How will they be establishing their corporate headquarters downtown if this is a merger (actually an acquisition) and they are now a combined company? 

Edited by newyorker

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^That is unknown. Ken is making guesses based on what the new release shared.

 

I think it is safe to say the Fortune 500 headquarters is in Cleveland, but how that impacts jobs in Cleveland and West Chester Township is not known/determined/public/etc. 

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9 hours ago, tykaps said:

Lol you're really enjoying this aren't you?

 

No, actually I'm not. I am regretting saying anything until I can say more. It's not fair to all of you, especially when there's a solid chance that nothing will happen.

 

2 minutes ago, ink said:

^That is unknown. Ken is making guesses based on what the new release shared.

 

I think it is safe to say the Fortune 500 headquarters is in Cleveland, but how that impacts jobs in Cleveland and West Chester Township is not known/determined/public/etc. 

 

It's not a guess that the headquarters will be in Cleveland. It's what their official release said. I don't expect a publicly traded company to reverse course on that. The job numbers are certainly a guess, but they are based on some available data.

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^Ha!  I stopped using Jakprints after they moved out of Downtown to Lake County. I use Hotcards now at 24 and Superior. They do a great job!

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This is big news -- going from 31 employees to 150 in a year? Fund that Flip is located at West 6th and Lakeside in the Warehouse District. It is jointly HQ'd in New York and Cleveland. It's one of many fast-growing companies that are leasing more space downtown that I'd like to write about soon with @tykaps help...

 

Fund That Flip adds to Cleveland office

https://www.crainscleveland.com/government/fund-flip-adds-cleveland-office

Edited by KJP
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53 minutes ago, KJP said:

This is big news -- going from 31 employees to 150 in a year? Fund that Flip is located at West 6th and Lakeside in the Warehouse District. It is jointly HQ'd in New York and Cleveland. It's one of many fast-growing companies that are leasing more space downtown that I'd like to write about soon with @tykaps help...

 

Fund That Flip adds to Cleveland office

https://www.crainscleveland.com/government/fund-flip-adds-cleveland-office

That’s awesome news.. and looking forward to that blog.  You and @tykaps are the dynamic duo.

 

9369762F-990F-4647-8A30-D1EC2DFCF784.gif

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Anxiously awaiting Mr. Leonhardt’s decision.

 

“I’m looking for a new headquarters,” Leonhardt says. “Brecksville has been great, allowing me to park across the street. So we’re looking at maybe building across the street on the VA site or doing something between Superior and Payne. The idea is to figure out which one’s going to work out best long term. But we plan on developing the Superior and Payne property. It’s either going to be our new headquarters or some type of housing.”
 

http://www.sbnonline.com/article/ronald-j-leonhardt-jr-has-crosscountry-mortgage-poised-for-greatness/

 

 

 

 

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11 hours ago, Sapper Daddy said:

Anxiously awaiting Mr. Leonhardt’s decision.

 

“I’m looking for a new headquarters,” Leonhardt says. “Brecksville has been great, allowing me to park across the street. So we’re looking at maybe building across the street on the VA site or doing something between Superior and Payne. The idea is to figure out which one’s going to work out best long term. But we plan on developing the Superior and Payne property. It’s either going to be our new headquarters or some type of housing.”
 

http://www.sbnonline.com/article/ronald-j-leonhardt-jr-has-crosscountry-mortgage-poised-for-greatness/

 

 

 

 

Very informative article but also slightly disappointing.  Based on numerous posts in other threads, while nothing has been announced, I was under the impression that the Cross County move to Superior was practically a done deal.  Hardly sounds like that.  Are the DiGeronimos (spelling) gumming up the works again with an aggressive pitch to a guy with a somewhat suburban mindset himself?  Of course they have every right to do so and would be crazy not to get this plum business onto their land.  Also less of a blow than a Cleveland company "moving" to Brecksville since Cross County is already located in that suburb, but still...

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^I’ve seen him downtown in his Ferrari so let’s hope he doesn’t have a suburban mindset and wants to work where he plays.  I have no inside information on where they set up their new HQ though.  I would think if they are to position themselves for future growth place matters, and young talent wants to be in walkable, urban areas.

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^Based on no evidence whatsoever, I'd imagine that in that current location he has plenty of suburban-minded employees from places like Medina County, who already think Brecksville is 'the city'. They're not gonna follow him to Downtown and I'd fully expect a two-site compromise, at best.


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I know the article is fairly recent, but I swear I remember reading that exact same quote from him at least a year ago when they first bought the Superior complex. I think they just took that and rehashed it since they didn't have anything new. I'm more inclined to believe that what KJP has been hinting at is more recent and likely at this point.

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4 hours ago, PoshSteve said:

I know the article is fairly recent, but I swear I remember reading that exact same quote from him at least a year ago when they first bought the Superior complex. I think they just took that and rehashed it since they didn't have anything new. I'm more inclined to believe that what KJP has been hinting at is more recent and likely at this point.

 

But I wasn't aware that DiGeronimo and its Valor Acres was competing for CrossCountry's HQ when I wrote my articles about their CEO's purchase of properties in the Superior Arts District. Since SHW isn't going with Valor Acres, DiGeronimo is stepping its efforts to attract other employers. They may also be going after Minute Man's HQ too, since 1801 Superior hasn't transferred yet either. And there is another development I have reported yet that suggests there has always been at least some residential angle to what the CrossCountry CEO is considering.

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Interesting news. Cleveland desperately needs to boost its information technology employment....

 

Zilker Technology sets March opening for new office in Northeast Ohio

 

Cleveland already has a concentration of experienced IT professionals, according to Rob Thomas, CEO and co-founder of Zilker Technology. What he is interested in now is developing the region's next generation of tech talent.

 

Zilker, an e-commerce and application development technology company, announced last week that it will open an office in downtown Cleveland in March, though a location has yet to be determined. It will be the company's fourth office overall and its first in the Midwest.

 

...The decision to put an office in Cleveland was not completely driven by the number of remote workers here, as Zilker has similar numbers of satellite employees in other cities. Thomas said state and local economic development organizations helped narrow the choice to Cleveland over two other locations that were under consideration.

 

https://www.crainscleveland.com/technology/zilker-technology-sets-march-opening-new-office-northeast-ohio

 

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On 1/19/2020 at 9:04 AM, KJP said:

Interesting news. Cleveland desperately needs to boost its information technology employment....

 

Zilker Technology sets March opening for new office in Northeast Ohio

 

Cleveland already has a concentration of experienced IT professionals, according to Rob Thomas, CEO and co-founder of Zilker Technology. What he is interested in now is developing the region's next generation of tech talent.

 

Zilker, an e-commerce and application development technology company, announced last week that it will open an office in downtown Cleveland in March, though a location has yet to be determined. It will be the company's fourth office overall and its first in the Midwest.

 

...The decision to put an office in Cleveland was not completely driven by the number of remote workers here, as Zilker has similar numbers of satellite employees in other cities. Thomas said state and local economic development organizations helped narrow the choice to Cleveland over two other locations that were under consideration.

 

https://www.crainscleveland.com/technology/zilker-technology-sets-march-opening-new-office-northeast-ohio

 

 

Zilker was intending on signing a lease at the old Stark Enterprises HQ but recently (since this article was published) walked away due to some unfavorable stipulations in the lease.  The language allowed for the lease to be terminated at any point, a result of developing situations with a “future neighbor”.

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https://www.crainscleveland.com/real-estate/post-office-plaza-lands-tech-property-services-companies

 

Two companies moving to Post Office Plaza:

  • OnShift moving all 220 employees from 4 floors in the Keith Building to the second floor of POP (exact square feet not mentioned, but guessing between 50-60,000 sq ft, plus right of first refusal to additional 25,000 sq ft if needed in the future).
  • Exacta Land Surveyors moving 60 employees from the Knights of Columbus Building to 20,000 square feet on the first floor of POP.

These moves push POP's occupancy to over 80%.  Gotta give K&D credit for bulking up the tenant roster here relatively quickly.

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^ I posted late last year, somewhere but not in this thread, about a legal firm also moving out of the Keith Building after being there since the place was built in 1922. With OnShift moving out, that building must be close to empty. A deliberate move by K&D? It’s maybe addressed in the Crain’s article, but I can’t read it. 

Edited by roman totale XVII
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^I wonder how decision on the location of new Justice Center courthouse tower is impacting landlords' mindsets. If the new courthouse tower does anywhere near Playhouse Square, i would think that the Keith building would see increased demand from small legal offices, etc. 

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13 minutes ago, 3231 said:

^I wonder how decision on the location of new Justice Center courthouse tower is impacting landlords' mindsets. If the new courthouse tower does anywhere near Playhouse Square, i would think that the Keith building would see increased demand from small legal offices, etc. 

 

The new Justice Center will not be near PHS.  It will be within a few blocks of the current location.

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On 1/24/2020 at 10:55 AM, federer_1984 said:

 

Zilker was intending on signing a lease at the old Stark Enterprises HQ but recently (since this article was published) walked away due to some unfavorable stipulations in the lease.  The language allowed for the lease to be terminated at any point, a result of developing situations with a “future neighbor”.

 

Looks like Zilker may have found their new home: The Caxton building.

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2 hours ago, federer_1984 said:

 

Looks like Zilker may have found their new home: The Caxton building.

 

Of all the gin joints in the world....


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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The Keith building is not empty, but I'd guess that OnShift's four floors will create a significant opening.   The first couple floors are pretty small spaces due to the Connor Palace lobby and dual elevator banks (one side for floors 1-10, the other for floors 10-20).

 

My understanding is that there are a bunch of internet server rooms in the building connected to the high speed fiber highway under Euclid. 

It will be interesting to see what K&D has planned for that space after they shift OnShift to another property.

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On 9/1/2019 at 9:27 PM, KJP said:

AML Rightsource also has offices at 200 Public Square. I wonder if they tried to expand downtown before choosing Highland Hills?

 

Growing tech firm snaps up full floor at East Side building

https://www.crainscleveland.com/real-estate/growing-tech-firm-snaps-full-floor-east-side-building

 

AML RightSource continues to expand with new office in Highland Hills

https://www.crainscleveland.com/finance/aml-rightsource-continues-expand-new-office-highland-hills

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Subsidies for the last new office tower, the Ernst & Young Tower, built in downtown Cleveland came from this program before it was scaled back....

 

 

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Lockton Cos. forms Ohio beachhead with new Cleveland office

 

Lockton Cos., which bills itself as the world's largest privately owned insurance firm, has set up shop in Cleveland with a new office — spearheaded by some former members of Oswald Cos. — that will serve as the business' beachhead for further expansion across Ohio.

 

Lockton's office, located at the Fifth Third Building in downtown on Superior Avenue, is led by president Kyle Anthony and senior vice president Monica Trusley.

 

Anthony said additional offices are expected to open in the future in both Columbus and Cincinnati.

 

MORE:

https://www.crainscleveland.com/finance/lockton-cos-forms-ohio-beachhead-new-cleveland-office

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