Sunday, February 04, 2001

Industry notes: Commercial real estate

Downtown office vacancy up

By Ken Alltucker
The Cincinnati Enquirer

        The downtown Cincinnati office market lost more ground than it gained in 2000 for the second consecutive year, according to an analysis released last week by Cincinnati Commercial Realtors.

        Net absorption in the central business district bordered by Third Street, Broadway, Central Parkway and Cental Avenue declined 31,557 square feet even though vacancy rates remained low at 7 percent.

        “We're in a period of equilibrium with not a real upside,” said CCR's Wayne Hach, who prepared the report. “I don't see anything that will drive the mar ket.”

        In other words, don't expect developers to add a downtown skyscraper anytime soon.

        Because businesses aren't pushing for new offices downtown, landlords have been hesitant to raise rental rates. Downtown rates for Class A, or top-of-the-line space, ranged from $20.40 to $26.10 per square foot. The top lease rates in suburban markets such as Kenwood and Blue Ash are approaching downtown's most expensive space.

        Softening the downtown market even more is about 200,000 square feet of sublease space — space leased but vacated because of cutbacks or other reasons.

        For downtown, Mr. Hach's analysis doesn't tally offices just outside the central business dis trict, such as the 200,000-square-foot Sawyer Point building anchored by Arthur Andersen, or the 177,000-square-foot Elsinore Place office that Hasbro vacated at the end of 2000.

        The downtown peripheral offices had a slightly higher vacancy, 13 percent, despite net absorption of 97,893 square feet.

        In the suburbs, most office space leased was in Kenwood, followed by Northern Kentucky and Blue Ash. The Kenwood region, which includes Oakley, Hyde Park and Norwood, had a strong year because of the opening of Rookwood Tower off Interstate 71, Mr. Hach said.

        Here's a rundown of the suburban markets, vacancy rates and net absorption (loss) in 2000:

        • Blue Ash, 14 percent, 110,039 square feet.

        • Kenwood, 8 percent, 178,064 square feet.

        • Montgomery/Milford, 17 percent, (5,878) square feet.

        • Northern Kentucky, 21 percent, 165,366 square feet.

        • Tri-County, 11 percent, 89,585 square feet.

        • I-71/Warren County, 14 percent, 110,309 square feet.

New Hannaford offers choices

               Long-term business travelers have another place to stay after last week's opening of the $5.8 million Hannaford Suites hotel in Kenwood.

        The 79-room hotel includes all the amenities business travelers expect: convenience store, business center, fitness room and conference room. Most rooms have kitchens.

        The hotel is owned by Jim Schiear, whose Mansion Hills Development Co. also developed a Hannaford Suites hotel in Newport.

        Brandy Wein Hospitality manages both hotels, as well as the Hilton Garden Inn at Interstate 275 and Wards Corner Road and Quality Inn Kings Island.

        “We're really excited about being in this market,” said Thomas R. Wein, Brandy Wein's co-founder. “We feel there is a big demand for this product.”

Midwest Mortgage signs 5-year lease

               Midwest Mortgage Co. signed a five-year lease for a 10,148-square-foot office at Sycamore Office Park in Blue Ash. Adam Simon represented Midwest and Mark Richter represented Sycamore.

        Have a news tip? Send it to Ken Alltucker, The Cincinnati Enquirer, 312 Elm St., Cincinnati, OH 45202, or call (513) 768-8384.


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