2013 FINANCIAL REVIEW & FORECAST 2014 Improving Outlook Progress in 2013 promises bright 2014 for commercial real estate in Cleveland By John W. Waldeck, Esq. Walter | Haverfield here’s a sense of optimism regarding commercial real estate in the City of Cleveland. Not only are Tpeople in the industry feeling it, but they can also see it in the form of more deals getting done. In 2013, credit was more readily avail- able for development and refinancing. With more cash flowing, area developers and property owners saw opportunities they had not seen in many years and were quick to act upon them – especially in the area of residential housing. High demand, combined with high occupancy rates, particularly in and around the downtown area, drove much of the development. What were some of the more signifi- cant accomplishments within the City’s limits in 2013? Starting with the east side, the University Circle area experi- enced tremendous growth, including: • Completion of phase I of the Uptown Apartments, including retail and resi- Photo by Jim Maguire dential housing lease-ups, and the CENTER OF ATTENTION Downtown Cleveland saw its share of development in 2013, including the opening of the Global Center for Health Innovation and Cleveland Convention Center. beginning of phase II • Renovation of housing units for stu- Of course, downtown Cleveland saw While much of this work had been dents at The Music Settlement more than its share of development: projected for 2013 earlier in the year, few people would have expected as much • Expansion of galleries at the Cleveland • Preliminary construction of Cuyahoga progress on many of the construction Art Museum County headquarters building on East projects, including all the work being • Opening of the Marriott Courtyard 9th Street, including redevelopment done by The Geis Companies on East on Cornell near University Hospitals of the Rotunda 9th Street. • Sale of building by Cleveland Such development also translated into Midtown Cleveland also saw growth Municipal School District, which other benefits, including the creation of through such projects as: moved into vacant space at 11th Street numerous construction jobs and the attrac- • Completion of construction in the and Superior Avenue tion of more people to live downtown. Euclid Corridor between 65th and Based on the progress made in 2013, • Construction of Old Bond Court Hotel 75th streets the new year is promising equally posi- • Preliminary construction to convert tive growth. Money from lenders for • Renovation of the Agora Building on the old East Ohio Gas Building on real estate projects is expected to be Euclid to be used as incubator space East 9th Street into apartments available at the current level or possibly for new business • Development of Flats East Bank, includ- even at an accelerated pace. Thanks to • Preservation of the Agora Theatre ing announcement of numerous leases decisive governmental action, tax credit • Expansion of Cleveland State student and promising lease-up projections programs (which were instrumental in housing on Chester between 26th and building up the City of Cleveland in • Completion of the Global Center for 30th streets recent years) will continue to be avail- Health Innovation and Cleveland able, especially in the form of New • Extension of Cleveland State campus Convention Center Markets Tax Credits. Although the to provide for its new Department of • Connection of the north and south City of Cleveland continues to be chal- Theatre and Dance sides of the Shoreway with completion lenged in the area of job creation, the • Renovation of Playhouse Square of the underground connector downtown area is still attracting people www.propertiesmag.com 1 to move downtown. With the success of ments above (projected to be the • Addition of the Hofbrauhaus, a multiple initiatives designed to combat tallest residential apartment building Germany-based franchise with an “brain drain,” downtown Cleveland will in the City) 1100-seat beer garden under cover and be home to more young adults than • Completion of the Cuyahoga County onsite brewery, at 15th and Chester (to what most of us can remember. Headquarters building, which will also house a refurbished Hermit Club) Some of the more noteworthy com- bring 770 jobs to the location mercial real estate projects projected for As was the case in 2013, these the City in 2014 (starting on the west • Construction of the new Kimpton new projects projected for 2014 are side) include: hotel and apartments in the old expected to have a significant impact Schofield Building on the southwest • Completion of The Shoreway apart- on the local job market with nearly corner of East 9th and Euclid ments near The Gordon Square 1,000 new jobs being created just at Arts District • Development of a new, yet undeter- the corner of East 9th Street and mined, mixed-use project in the old Euclid Avenue. • Phase II development of the Flats East Huntington Building So hang on to your hat if you work Bank project which will likely include in the commercial real estate market, apartments and some office space • Construction of the Le Meridien because 2014 is promising a whirlwind Hotel on East 9th Street • Ongoing development on East 9th of activity. That’s good news for a city Street at Euclid, including develop- • Completion of new streetscaping for that has struggled for the past decade to ment of The Rotunda and the 1010 Playhouse Square rebound from an economy characterized Euclid Avenue building • Development of new apartments in by an extremely tight lending market. P • Opening of the new Heinen’s grocery the old East Ohio Gas building store on East 9th Street, occupying • Tentative construction near Browns Waldeck is a partner and head of the Real Estate more than 35,000 square feet Stadium as part of the overall lake- Practice Group at downtown Cleveland-based • Development of the Metropolitan front development plan (final bidders Walter | Haverfield. Article reprinted with per- Hotel on East 9th Street with apart- to be chosen in 2014) mission from Properties Magazine. the art of Problem solving Providing creative legal solutions for real estate matters the real estate attorneys of leasing | Development | real estate finance | tax Credit transactions | land Use & Zoning | Urban & historic redevelopment | Cleveland | 216.781.1212 | walterhav.com tech, multi-family & shopping Centers 2 Properties | January 2014.