Sunday, May 4, 2003

Industry notes


Commercial real estate

By Ken Alltucker
The Cincinnati Enquirer

Office market still sluggish as job growth lags

The Greater Cincinnati office market continued to slump during the opening months of 2003 because of lack of job growth.

Two new reports tracking first quarter activity suggest that office vacancies downtown and in the suburbs increased slightly with few large businesses expanding or moving to new space.

Cresa Partners reported an unprecedented 1.5 million square feet of office space is available for sublease - space prematurely vacated by companies due to downsizing or other corporate decisions. That's an important figure because companies typically attempt to rent this space at less expensive rates in order to lure tenants, providing direct competition to landlords looking to rent unleased buildings.

Cresa's report says the sublease space drives up downtown's Class A vacancy rates to 13.8 percent and suburban Class A office vacancies to 27.1 percent.

CB Richard Ellis doesn't factor sublease space in its report, so it recorded lower vacancy rates for downtown buildings (10.8 percent) and suburban buildings (22.8 percent).

There was relatively little activity from January through March with just 53,000 square feet of office space rented.

Also, both reports predicted gloomy days ahead with corporate bankruptcies and large users such as Convergys Corp. contemplating moves.

Nova radio defensecontractor expands

A defense contractor that creates software for military radios is expanding in West Chester.

Nova Systems Solutions will anchor a 72,000-square-foot office on Windisch Road being built by K&W Development. Nova Systems Solutions is a spinoff company of West Chester-based Nova Engineering.

Nova Systems' mission: create software allowing all radio systems of the various military branches to communicate with each other.

Three restaurants to replace 2 in Sycamore

Up to three new restaurants will emerge at the site of the vacant Prime & Wine and Dick Clark's American Bandstand Grill restaurants in Sycamore Township.

The Chicago-based developer Jones Lang LaSalle submitted plans to Sycamore officials to raze the two vacant restaurants and rebuild three smaller-sized venues at the Sycamore Plaza strip mall.

Among the potential new eateries: Romano's Macaroni Grill.

Liberty Mutual plans move to Blue Ash

Liberty Mutual plans to move its 15,000-square-foot office out of Bank One Towers and into the Northmark building in Blue Ash.

Although a final lease deal is still being negotiated, the insurer has notified Bank One landlord Duke Realty Corp. that it plans to leave when its current lease expires at the end of August.

Ken Alltucker covers commercial real estate for the Enquirer. Call him at (513) 768-8384 or e-mail kalltucker@enquirer.com




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