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.
The Energy Market Drives Growth in the Multifamily Sector
Energy growth is taking off across the country. JLL recently examined the hottest energy markets in a newly released infographic, “Where Is U.S. Energy Growth Happening?” JLL found that four cities “hold 12.6% of national office stock, but account for 22.3% of net absorption since Q1 2011.” Pittsburgh is among these leading cities. The list also includes Denver, Dallas-Fort Worth and Houston.
The success of the U.S. energy market is creating more demand for multifamily housing. According to a related JLL infographic, this high demand can be attributed to a variety of factors, including the downward trend of home ownership, the movement toward areas with access to energy and technology employment opportunities and the increasing popularity of urban living among millennials.
Cities across the Midwest are catering to the increased demand for multifamily housing in metropolitan areas. For instance, within downtown Cleveland—Northeast Ohio’s hottest housing market—the list of residential projects grows with new development emerging throughout the city. Projects include K&D’s conversion of the East Ohio Gas Co. building downtown into apartments. Other developments are taking place on E. 9th Street and E. 14th Street, among others.
Chinese Property Investors Show Interest in Detroit
Chinese property investors have recently shown significant interest in distressed U.S. properties, including those that are behind on loans or experiencing significant vacancy rates, according to The Wall Street Journal.
In recent activity, Dongdu International (DDI) purchased two notorious Detroit buildings, including the asset that was originally home to the Detroit Free Press and the David Scott Building. DDI paid $13.6 million for their new Midwest properties. Also according to the Wall Street Journal, “Detroit’s central business district has seen more deals this year,” despite the city’s bankruptcy protection filing in early 2013.
Popularity Grows Among Secondary Office Investment Markets
According to a recent article from National Real Estate Investor:
“Office investment sales are gaining traction as a new wave of buyers have emerged, bidding up pricing for core assets and driving investors to second-tier markets in their search for higher yields.”
Office investment sales continued their upward climb in October, and are forecasted to far surpass last year’s total sales revenue, also according to National Real Estate Investor. With so many buyers seeking space, some are looking to secondary markets for more options. Distressed properties are also gaining renewed interest.
News Wrap-Up In Our Region
- Bob Evans announced plans to build its 27th restaurant in the Cincinnati area. The new location is projected to create about 60 jobs, and is expected to open in March 2014.
- Mane Inc. will expand its current operations in Woodlawn following the purchase of the Kerry Ingredients’ facilities for about $4.3 million. The new space, located at 10261 and 10311 Chester Road, along with neighboring land, totals more than 22 acres.
- American Greetings Corp. will move forward with establishing Westlake as its new world headquarters location. The company has not finalized a move-in date.
- Northeast Ohio’s premier Cambria Suites hotel will be located in Avon. The 113-room hotel is projected for completion early next fall, and is expected to create about 50 jobs.
- Crawford Hoying Development Partners is planning to invest approximately $300 million in a proposed mixed-use project in Bridge Park. New development would include apartments, condominiums, commercial office space and a hotel, among other plans. Crawford hopes to break ground in September 2014.
- Avanco Group received approval for a seven-year, 50% tax credit to invest $6 million in a new U.S. auto parts plant, located in Licking County. The company plans to hire 59 employees in the 50,000 square foot facility.
- The David Stott Building and the former Detroit Free Press headquarters was purchased by DDI Group in an auction. DDI intends to continue preconceived plans for both buildings.
- Trek Development Group will begin to carry out renovation plans at the 90,000 square foot Washington Trust Building in November. Plans for the renovation include consolidating “60 percent of the building occupied by office and first-floor tenants, and redevelop the rest into 44 apartments.”
- Pittsburgh Intermodal Facility rail operator CSX Corp. announced plans to build on property near Trinity Commercial Development. Construction for the new rail operator is slated to begin in 2015, with an expected cost of roughly $50 million.