22 Midwest Real Estate News | NOVEMBER/DECEMBER 2018 | www.rejournals.com

Multifamily, investment fueling

Cincinnati’s CRE growth By Susan Branscome

Encore in downtown is an example of the high-end multifamily projects rising in Cincinnati.

he amount of private and this effort are government-sponsored Cincinnati Children’s Hospital began , retail space, restaurants, public capital investment entities and non-profits such as development of a $650 million expan- apartments and two hotels. in the city of Cincinnati 3CDC, The Greater Cincinnati Rede- sion to the Avondale , which during the last 10 years velopment Authority, REDI Cincinnati, will add 600 jobs. FC Cincinnati, Cincinnati’s profession- has been unprecedented. Northern Kentucky Tri-Ed and the al soccer team, began as a vision by T Greater Cincinnati Chamber of Com- The recently opened MLK/I-71 inter- manager Jeff Berding. With the finan- Cincinnati has experienced a resur- merce. change has allowed much better ac- cial support of the Lindner family the gence unlike any time in the city’s cess to 670 underutilized properties team was accepted into the MLS for recent history given an incredible Some of the following major develop- near the UC Medical Center and the the 2019 season. The club has record amount of capital invested during the ments have recently been completed University of Cincinnati in an area attendance, averaging 25,000 per last 10 years. Cincinnati is one of the or in the planning phases: known as Uptown. The expectation game and plans to develop new stadi- top cities in the country for millennial is to create an additional 7,000 jobs um in 2021 just west of the Cincinnati migration and ranked in the top 10 Amazon is expanding its Global Prime with the investment by local develop- CBD. by fDi Magazine as an “American City Air Hub in Northern Kentucky and ers. for the Future.” CNBC’s Disruptor 50 announced a $1.5 billion investment The Cincinnati/Northern Kentucky List ranked Cincinnati in the top eight at the Cincinnati/Northern Kentucky Terrex Development in a joint venture International Airport is the fast- cities in the country for business International Airport (CVG) to include with Messer have grand est-growing airport in the country startups. 3 million square feet of and plans to develop soon in this imme- with an 18 percent increase in pas- With a 3.7 percent unemployment office space. The projections include diate area. Terrex recently signed a senger travel last year. rate, strong supply and demand the addition of 15,000 jobs over the lease with the University of Cincinnati fundamentals in all real estate sec- course of 30 years. DHL has invested for 180,000 square feet for half of the The land between the Reds stadium tors, Cincinnati is poised to be one more than $280 million in the last office complex at the new interchange. and Bengals stadium, known as The of the top cities in the Midwest for year and employs 3,500 people, The development will also include a Banks, is nearly fully developed with investment and remains competitive contributing to CVG’s ranking as the 200-room hotel atop a 1,450-space the recent addition of an AC Marriott, for companies to expanding or relo- eighth largest cargo airport in the parking garage. Additionally, a joint additional apartments and plans cating. However, with long a strong country. venture between Neyer Properties for a concert venue. There are 15 unemployment rate along comes the and Kulkarni Properties has plans for restaurants and bars located at the challenge of companies to hire and Currently being developed by a joint a $500 million mixed-use develop- Banks. General Electric occupies a fill positions with qualified people. venture between North American ment for research and development, 338,000-square-foot office building Properties, Kroger Co., 3CDC, City of office, retail housing and hospitality at The Banks housing its Global Op- Today, the Cincinnati story is not Cincinnati, Northpointe and Rook- at this underutilized area. erations Center. Orchestra is unlike that in other cities. Class-B wood Properties is a $91 million proj- projected to open in the fall of 2019 downtown office space is converting ect in the CBD at Court and Walnut The Rookwood Exchange is a $100 and will host 170 events and attract to apartments while retail is in part Streets. The project will include the million mixed-use development by 250,000 attendees annually. becoming industrial. The pro-busi- first true downtown Cincinnati Kroger Jeffrey R. Anderson Real Estate Inc. ness focus, collaborative work and grocery store, a 550-space parking and is completely built out in Nor- The district immediately north of economic commitment to the region garage, and 139 luxury residential wood/Hyde Park off I-71 and includes the CBD known as Over-The-Rhine has never been stronger. Helping with housing units. a 230,000-square-foot class-A office (“OTR”) has undergone a renaissance www.rejournals.com | NOVEMBER/DECEMBER 2018 | Midwest Real Estate News CINCINNATI 23 with the addition of many multifamily mixed-use project in Pendleton area PLANNED 180,000 square feet of office and to developments and redevelopments, of downtown. This mixed-use project • One41 Wellington is a $30 million include restaurants and parking. condo units, a variety of restaurants would include 150 apartments with multi-family development by Uptown and dozens of bars. The American parking and retail. Rental Properties LLC and North Besides the Summit Park develop- Planning Association has named OTR American Properties. The project in- ment mentioned earlier, The Fortus as one of five Great Neighborhoods in • NorthPoint Group completed $17 cludes a 202-unit building Group also has plans to develop two America in its annual Great Places in million development, Duveneck near the University of Cincinnati. additional new multi-family proper- America list. The $143 million renova- Square, 110-unit project in Covington, ties--- tion of Music Hall and $48 million ren- Kentucky. • Hills Development was recently ovation and expansion of Washington approved to develop a $40 million, 1. A new mixed-use $55 million, 285- Park are key projects here. • Neyer Properties and Casto Devel- 200-unit new project in Anderson unit in East Walnut Hills will break opment converted Baldwin Office into Township. ground in the summer of 2018 in the MULTIFAMILY $100 million development of 190 loft neighborhood of East Walnut Hills. The Cincinnati MSA has a multifamily apartments north of the city in mid- • Capital Investment Group is work- market with many new developments town. ing toward getting approval 2. Freeport Row has been planned as in both downtown and the suburbs. for a $90 million mixed-use project a new building on vacant land as well Vacancies are beginning to increase • Capital Investment Group devel- in Kenwood known as Gallery of as four historic buildings and once slightly with the year-end vacancy oped the $80 million Aqua on the Kenwood. The property will include restored will include 110 apartments. expected to be 4.6 percent. Rental levee in Newport, Kentucky which 266 apartments, a 130-room hotel, rates have continued to rise each includes 239 apartments including quarter, having increased since the retail space and a parking garage as first quarter of 2010. well as a hotel. COMMERCIAL REAL ESTATE According to Kurt Schoemaker with • Construction has begun on The DEBT, EQUITY & SERVICING CBRE’s multifamily division, activity Academy is a 202-unit, $37 million and absorption of newly completed multi-family development in Newport units continues to be strong. sponsored by the Carmel, Indiana developer, CRG Residential. MULTIFAMILY SUBURBAN OFFICE Under construction or recently deliv- ered • Jeffrey R. Anderson Real Estate and Miller-Valentine Group are developing $31,000,000 $14,900,000 • 139 luxury residential housing units $30 million development to include ENCORE APARTMENTS LINDEN POINTE currently under development at Court 200 units in Silverton. CINCINNATI, OH | 133 UNITS CINCINNATI, OH | 120,759 SF and Walnut Streets by North American LIFE COMPANY CMBS Properties and Rookwood Properties. • PLK is developing Echelon Apart- ments, a 191-unit, $30 million project • Encore Apartments was a $52 mil- on the east side of Cincinnati on Glen lion, 17-story luxury, 133-unit apart- Este-Withamsville Road. MULTIFAMILY MULTIFAMILY ment building downtown at 8th and Sycamore Streets developed by North • The District at Summit Park in Blue $5,000,000 $4,750,000 American Properties. Ash is a joint venture between Al VILLAGE GREEN TOWNHOMES RAVENWOOD APARTMENTS Neyer Inc. and Fortus Group based in FAIRFIELD, OH | 105 UNITS CINCINNATI, OH | 192 UNITS • 49Hundred, a 266-unit luxury prop- Fort Wayne, Indiana which includes a LIFE COMPANY FREDDIE MAC erty in Blue Ash has stabilized and 290-unit multi-family development. was developed by Hills Development. • Anderson Birkla, based in India- OUR CINCINNATI TEAM • City Club Apartments a developer napolis converted a class-B office based in Detroit has redeveloped a building into a $61 million conversion class-A office building at 309 Vine to include 179 apartments, known as Street into a nearly $67 million trans- @580. formation of 294 apartments. Susan Noah • Riverhaus, a 192-unit development Branscome Juran • Flaherty and Collins and 3CDC have is being developed by Flaherty & 513.985.2266 513.985.2263 made progress on the approvals Collins Properties, a $40 million de- to develop a $116 million, 14-story velopment in Covington, Kentucky. mixed-use development with six floors of 264 apartment’s downtown • Continental Properties based in at Fourth and Race Streets. Milwaukee, Wisconsin developed a 308-unit multi-family development in • Circle Development is beginning West Chester, a northern Cincinnati phase II of a $30 million development suburb. including 104-unit units in Madison- ville. • Schottenstein based in Columbus is developing a 236-unit property • Just announced, Charles Street De- in Florence, Kentucky known as the velopment Co., a Denver-based devel- Grand at Florence oper is planning to build a $40 million Visit northmarq.com/cincinnati to learn more 24 CINCINNATI Midwest Real Estate News | NOVEMBER/DECEMBER 2018 | www.rejournals.com

49Hundred in Blue Ash is a 266-unit luxury apartment project.

INDUSTRIAL 1.3-million-square-foot building just veloped a 541,000-square-foot wood Development is developing Cincinnati is well-located at the built, not yet occupied, in IDI’s Park speculative distribution center near the former Showcase Cinema convergence of two interstates, I-71 North. According to Dave Noonan of the Cincinnati/Northern Kentucky site in Erlanger, Kentucky. Candy and I-75, providing a centralized Lakota Commercial Realty, “Amazon International Airport, in Florence, maker Perfetti Van Melle USA Inc. transportation region serving the has made Kentucky a large, big-box, Kentucky. It will also develop a has signed a lease for half of the Midwest with a total industrial in- cross-dock speculative market, yet 264,000-square-foot spec building 780,000-square-foot building, Er- ventory of around 300 million square the savvy developers to the north across the street. Both were leased langer Commerce Center I, where the feet. Much of the new industrial are building medium-sized rear load well before completion. company will relocate its warehous- development is occurring at or just products and only secondarily big ing operations. Coca-Cola Bottling outside the I-275 outer belt, south cross-docks.” Springdale Commerce Park is a joint Co. will also bring more than 400 around the airport as well as north venture development between de- new jobs to its $30 million sales and of the City. The Opus Group has announced veloper Strategic Capital Partners distribution center here. Neyer/Hill- plans to construct a speculative in- LLC and real estate finance firm PCCP wood has already started building II, According to REIS, there is more than dustrial development in Middletown, LLC. The partners purchased the for- a 575,000-square-foot speculative 14 million square feet of planned or . The development is 612,730 mer GE Park golf course in Springda- building. proposed new warehouse and distri- square feet on Todhunter Road, near le and will convert the property into bution industrial space. According to the I-75 corridor. This project is ex- Springdale Commerce Park, which Developer Ridgeline, new to the mar- Dave Noonan of Lakota Commercial pected to finish in May 2019. Duke will include four buildings designed ket, has just completed a speculative Realty, “The market is vibrant with Realty completed a 450,000-square- to include more than 1.1 million 216,000-square-foot building in Flor- much activity in response to the foot industrial space in 2016 that square feet of class-A industrial ence. The Paul Hemmer company, demand.” added its first tenant in late 2017, space. in conjunction with Chicago-based CompuCom. The development is in Molto, also new to the market, is The vacancy reported by REIS in all Fairfield, Ohio. KP Development, a St. Louis-based underway on a 142,000-square-foot sectors is 7.2 percent and rents are company, will be developing a speculative building near the air- up year-over-year by 3.6 percent. IDI Logistics, which just completed 900,000-square-foot speculative . An additional 162,000-square- a spec 756,000-square-foot build- bulk distribution building at Logistics foot building will soon follow. Some of the larger industrial De- ing in Monroe, plans to develop a Park 75 near the Interstate I-71/I-75 velopments recently completed or seventh industrial building at 61 split in Walton in Northern Kentucky. Duke Realty purchased 47 acres in planned projects are: Logistics Blvd in Walton, Kentucky. The development could eventually Clermont County and is developing This building will be more than 1.06 include more than 3.5 million square a 617,000-square-foot facility for n’s Global Air Hub is spurring land million square feet. feet of industrial development. home accessories company Design acquisition and development with within Reach at South Afton Industri- Northern Kentucky. Amazon has a VanTrust Real Estate recently de- Al Neyer in joint venture with Hill- al Park. This development is expect- www.rejournals.com | NOVEMBER/DECEMBER 2018 | Midwest Real Estate News CINCINNATI 25 ed to create 3,500 new jobs. between I-275 and downtown, so Elizabeth in Northern Kentucky have As Garrick Brown, vice president of larger tenants will have fewer choic- all made major investments in de- retail intelligence with Cushman & Duke Realty Corp. also broke ground es other than downtown and Blue velopment and lease commitments Wakefield, says, retailers must inte- in March on the Fairfield Logistics Ash for the eastern submarkets. throughout the region as the need grate their ecommerce platform with Center on Seward Road. The com- increases. their physical stores. Some retailers pany purchased a vacant 22.8-acre West Chester, Mason-Montgomery are doing this well and others are parcel of land and is developing a and Northern Kentucky have report- RETAIL not. 284,000-square-foot warehouse. ed among the highest vacancies According to Cushman & Wakefield, with Kenwood being the tightest the retail vacancy at the end of the Brown says the media have over- ProLogis is developing a $33 million, and most expensive office market. second quarter in the Cincinnati blown the retail buying shift with 827,000-square-foot leased facility Northern Kentucky’s office market region was 8.4 percent. There are mostly negative news being report- for Bed Bath and Beyond in Monroe, is improving with Corporex renovat- few new retail developments in the ed. The fact is there were 14,000 Ohio, on I-75. Bed Bath and Beyond ing Rivercenter I and II. Leasing in area as developers are taking a stores opened in 2017 and 10,000 is expected to bring 900 new jobs to the two buildings on the river have wait-and-see approach. Given the closed, with a net 4,000 positive the area. In addition, Prologis has struggled for years yet with the ren- acceleration of ecommerce and a growth in store openings. started a new 156,000-square-foot ovation leasing has improved to an higher retail inventory than neces- speculative building in Hamilton. overall 75 percent, according to Nick sary, Cincinnati, like most other U.S. The Cincinnati region has enjoyed a Heekin of Corporex. cities, will experience a shift in which long yet slow recovery from the great Becknell completed a spec tenants will occupy retail space in recession. There is uncertainty of 176,000-square-foot building in Fair- One of the positive shifts in down- the future. where we are in the cycle, when the field. town has been the ongoing conver- next recession will occur and where sion of Class-B office buildings into According to Terry Ohnmeis, a retail interest rates will be in the future. Northpoint Development developed multifamily and hotel. This has con- specialist with Cushman & Wake- Despite the uncertainty, with the two spec buildings on Seward Road tributed to the trend of downtown field, the spaces where big-box ten- commitment to the region, develop- in Fairfield, a 476,500-square- rental dwellers and a need for more ants have vacated are being replaced ment and growth, the Cincinnati and foot cross-dock building and a hotel rooms, leading to more activity generally by three users, discount Northern Kentucky region should 130,000-square-foot rear-load. A and vibrancy downtown. stores, fitness places or furniture fare well. first new tenant at this park is Hollar, and home goods stores. Restaurants Inc., which will lease 125,000 square Snow says there is a trend of tenants are among the most successful re- Susan Branscome is senior vice pres- feet. Both buildings are just about desiring for their employees a “live- tailers in this economy and paying ident and managing director with full. work-play” environment. An example among the highest. the Cincinnati office of NorthMarq is the master plan of Neighborhoods Capital. In addition, Northpoint purchased at Summit Park, which includes plans two farms totaling 106 acres in West for a significant office development Chester in a planned $75 million being developed by a joint venture development at Union Centre Bou- between Al. Neyer, Vandercaar Hold- levard and Seward Road that could ings and the Fortus Group. bring 1,000 new jobs. The industrial office park will eventually include Another example of live-work-play 1.8 million square feet of space in six is Montgomery Gateway,the devel- buildings on more than 100 acres. opment of 12 acres in downtown ExcEptional Montgomery. The city of Montgom- OFFICE ery selected Gateway Partners, a EnvironmEntal The overall office market vacancy in consortium of five development the region is 19.5 percent, according partners, to develop this $100 Consulting to Peter Snow of Cushman & Wake- million development with a mix of field with overall average rents at office, restaurants, hospitality, retail $17.94 per square foot and $21.82 and residential. » Phase I Environmental per square foot for Class-A space. Site Assessments The opening of the MLK interchange » For Private Equity Phase II Limited Site While activity is strong, there is still on I-71 north of the city in 2017 has Investigations Investors, Real Estate softness in downtown, Blue Ash and already spurred growth for undevel- » Risk Management Investors, Realty West Chester. VanTrust purchased oped areas in the Uptown area. There » Vapor Intrusion Sampling Landings I and II in Blue Ash and is are 670 acres of unused properties in Purchasing & Sales » Brownfields speculatively developed Landings this area and the potential to create III, a 140,000-square-foot building in 7000 new jobs. Terrex Development » Remediation Blue Ash. and Messer Construction have plans » Independent Review to develop a 360,000-square-foot Also in Blue Ash, Summit Park is office complex anchored by 180,000 Your environmental risk solution being developed by Al Neyer and square feet to University of Cincin- Vandercar Holdings. The first phase nati. Neyer Properties in partnership of this development is Class-A with Kulkarni Properties also have multifamily, yet plans call for office plans to develop office at this loca- development. tion.

According to Snow, there is little The major healthcare providers of availability for 20,000-square-foot- Christ Hospital, Mercy Health, Tri- HanisConsulting.com (262) 853-4913 plus tenants along the 1-71 corridor Health, Children’s Hospital and St.