Commercial Real Estate News Brief: July 2014

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Commercial real estate is a dynamic industry. Keep up with Spaces’ monthly recaps of the most valuable industry articles we’ve recently come across, focused on news in Ohio, Michigan and Pennsylvania.  

Office Recovery Spreads Beyond Gateway Cities  

JLL CRE News BriefThe U.S. office sector hit a significant milestone in the second quarter of 2014, reported GlobeSt.com. Aside from notable activity across big cities, experts reported an upturn in office markets “far beyond the gateway cities.”

John Sikaitis, JLL’s managing director for local markets and office research, explained that some of this positive growth can be attributed to secondary, Midwest markets, including Cincinnati, Cleveland, Columbus and Detroit. Sikatis specifically called out growth opportunities in Detroit:

“Healthcare, tech and creative companies, among others, have set up shop in the CBD seeking to attract all the millennials that want to live and play downtown.”

For an in-depth overview of real estate trends in our region, visit JLL’s Q2 market highlights:

Gilbert’s Mission: Operation Detroit

Detroit’s resurgence has taken center stage—with media attention from both local and national publications in recent months. Many of these reports applaud Dan Gilbert as the key instigator for positive change in the Motor City.

The New York Times reported on Gilbert’s mission, stating that: 

“He has gone all-in. He has brought 12,500 employees with him to downtown, and along with other private investors is funding the construction of a light-rail system that will connect the central business district with the neighboring Midtown district.” 

According to Bloomberg, the planned rail system has had mixed reviews locally. Supporters of the rail transit claim it will accelerate growth in the CBD, which will eventually extend to Detroit’s abandoned neighborhoods. Skeptics assert the rail system will run too slow, is more expensive, and overall will not help low-income residents. 

Cleveland Changes the ‘Rust Belt’ Stereotype 

When you think of ‘rust belt’ cities, what comes to mind? Historically, the term has not been a flattering one … until now.

Cities in the ‘rust belt’ are creating a new label for surrounding cities. Specifically, recent wins in Cleveland are making big waves across the country, including the 2016 Republican National Convention, and the return of LeBron James to the Cleveland Cavaliers. Both triumphs demonstrate the city’s revitalization and potential for continued growth.

According to the Los Angeles Times, the key to help remove the stereotypes of Rust Belt cities is to effectively restore urban areas. This, coupled with building a foundation in industries like healthcare, technology and biotech, will attract young professionals and bring more revenue to these markets.

News Wrap-Up in Our Region

Cincinnati  

  • Denver-based CH2M Hill will relocate from 10123 Alliance Road to a new regional facility in Sharonville, Ohio. The new four-story, 106,000-square-foot building will house more than 200 employees from its current location.
  • ThyssenKrupp Bilstein of America is expanding its manufacturing operations by 60,000 square feet. The project will add 214 new jobs.

Cleveland 

Columbus

  • Two new tenants, Drive Capital LLC and QICParc Inc., join the Offices at the Joseph project in the Short North, increasing the total occupancy of the building to about 66 percent.
  • Southgate Corp. began a $3.2 million project to build a 50,000-square-foot industrial property in Licking County.

Detroit

  • Dan Gilbert purchased the 58,000-square-foot former Globe Tobacco Co. building located at 407 E. Fort St. for $3.3 million. Gilbert now owns more than 60 properties in Detroit.
  • Detroit’s VernDale Products Inc. plans to open a new 82,000-square-foot plant on Weaver Street in mid-August. The plant will be used to make dried milk for premium chocolate.

Pittsburgh 

  • Direct Energy signed a five-year lease at Liberty Center, and will condense its occupancy at the building in the process—moving from three floors to two floors.
  • Currently leasing 10,000 square feet, WindStax Wind Power Systems is looking to expand operations by quadrupling its space.

Newspaper image via NS Newsflash.

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