Posted July 17, 201410 yr Probably worthy of its own thread, but I'll put it in here until a mod makes that call: Leader Building will be sold to K&D; apartment developer plans next downtown Cleveland project CLEVELAND, Ohio -- Another downtown Cleveland building is set to become apartments - and this time, the property isn't an empty office tower or a shuttered department store. The K&D Group, Inc. plans to buy the Leader Building, at 526 Superior Ave., in a deal that could close by mid-August. Roughly 60 percent full, the 16-story office building is a longer-term, mixed-use play for K&D, which expects to sit on the property for two to three years before converting most of the floors to housing. * * * * * "We're buying it as an ongoing, existing office building, so this is much different than most of the deals in the past," Doug Price, K&D's chief executive officer, said of the Leader Building. "I can tell you that the first floor is certainly going to stay retail," he added. "From there, we're not sure how many floors are going to stay commercial. But we're thinking we want to get about 230 apartments in there." http://www.cleveland.com/business/index.ssf/2014/07/leader_building_will_be_sold_t.html#incart_river
July 17, 201410 yr I KNEW THAT BUILDING WAS GONNA BE NEXT! I JUST KNEW IT! :) K&D is using money from the sale of its suburban apartment buildings to expand its downtown real estate portfolio. They aren't the only ones shifting from suburbs to core city. K&D, Geis, Petros, First Interstate and Weston are shifting more into the core city at varying degrees. K&D is clearly jumping in with both feet. Think about the significance of this in terms of how the real estate market is shifting. BTW, in a Wall Street Journal article from earlier this year, K&D said it was interested in more than one downtown building. The Leader Building's lobby is one of the most beautiful and ornate in the city. And this building's occupancy is very good, if I remember correctly. So between this building and the Standard Building evicting its tenants (and more are surely coming, like the City Club Building?), this will further tighten the downtown office market and continue to push up rents. BTW, the Leader Building has a little history with me. Until the early 1960s before moving to Erieview Tower, M.A. Hanna Co. and an affiliate, Susquehanna Collieries had offices in that building. My grandfather was a VP with Hanna and president of Susquehanna Collieries. So when my father was a boy in the 1930s and 40s, he would often visit my father at the Leader Building and then walk over to the Cleveland Athletic Club to have dinner. Then take the Shaker Rapid home. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
July 17, 201410 yr I wonder what will happen to my dentist!! I have one picture of the inside. It really is beautiful as KJP mentioned.
July 17, 201410 yr ^I was just there today and praying they stay downtown! The detail in the elevator cabs alone is outstanding. clevelandskyscrapers.com Cleveland Skyscrapers on Instagram
July 17, 201410 yr Maybe K&D will announce an office building project in which he can shift the Leader tenants to (instant tenants) and attract some new ones along the way. Hence the two to three year wait for the conversion.
July 17, 201410 yr We shall see if they truly sit on it for 2-3 years. There are very few conversions left.
July 17, 201410 yr Maybe K&D will announce an office building project in which he can shift the Leader tenants to (instant tenants) and attract some new ones along the way. Hence the two to three year wait for the conversion. I don't see K&D pursuing an office building project (either new or rehab) but only because K&D has ever pursued such a project before. The only reason why K&D is considering keeping offices as part of the Leader Building is because they're already there and is a revenue stream is available to keep paying the building's expenses. They can probably start trading offices for apartments as soon as the tax credits are approved. But it looks like something in the ballpark of 70,000 square feet of offices may remain in the building, if my math is right. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
July 17, 201410 yr More good news, and the eastern half of downtown continues to fill out with more residents (eventually). As others have mentioned, this news also reminded me that I need to make a dentist appointment 8-)
July 17, 201410 yr K&D Group putting together the pieces to acquire the Leader Building By STAN BULLARD July 17, 2014 3:16 PM Willoughby-based K&D Group is putting together the pieces for its next big downtown Cleveland deal. K&D, which opened its latest downtown apartments earlier this month, plans next month to acquire the Leader Building, according to Doug Price, K&D’s CEO. However, don’t look for the developer to immediately work on converting Leader to apartments. The property is going into inventory, at least for awhile. Price said K&D needs to get historic designations for the Leader Building to qualify for federal historic tax credits. It also plans to go after Ohio Historic Preservation Tax Credits, which are a competitive program and only awarded twice annually. Initially, Price said, K&D will continue to lease the building as offices. http://www.crainscleveland.com/article/20140717/FREE/140719822/kd-group-putting-together-the-pieces-to-acquire-the-leader-building
July 17, 201410 yr So between this building and the Standard Building evicting its tenants (and more are surely coming, like the City Club Building?), this will further tighten the downtown office market and continue to push up rents. I was thinking about that as well. There have been a lot of older office buildings that have been taken offline. Vacancies are falling and rents slowly creeping up. FEB has proven that there is demand for new Class A office space. This deal and the Standard Building sale will surely fuel that demand for space further. My fingers are crossed that we will see some surface lots disappearing, particularly on Public Square. As previously mentioned, I believe K&D will build the residential units floor by floor like they are doing over at 1717 and keep the office tenants until their leases expire. I am really excited to see the activity that is occurring on E 6th. It has always been one of my favorite streets downtown due to the fact that it is one of the only streets downtown that is not perfectly straight, the street is on a slight hill, and there is a strong street wall. The street has a lot of character. Price stated that he will meet with Frank Sinito (who just bought the Garfield Building) and discuss turning E 6th into a neighborhood similar to E 4th. Hopefully this will bring 515 Euclid back onto the drawing board since it will be a prime location. Does anyone know if the Leader Building is considered Class C or B?
July 18, 201410 yr I love East 6th too and am always excited to see more residents downtown, but not sure how enthusiastic I am about using the state historic preservation tax credits for projects like this. Unless the Leader Bldg facade is about to fall off or something, sounds like this project won't bring a mostly empty building back on line or restore a historic facade. If it gets the tax credits, the state might end up doing little more than subsidizing an interior conversion that allows K&D to bring higher paying tenants into an already viable building. It's also not clear to me that tightening the class b and c office markets will so directly contribute to new class A office construction. How may blue chip tenants are really left in these older buildings? Seems just as likely that start ups and smaller law firms, etc will have to start heading to the burbs if class b/c rents start creeping up too much, so at some point we may just be trading office tenants for apartments rather than growing downtown. Similarly, it's possible that subsidizing these conversions delays new residential construction by sopping up more rental demand. I don't mean to sounds like a downer, just questioning whether one of our policy levers needs to be tightened up to maximize the benefits it produces. I'd much rather see state money go to things like the mostly empty May Co building than the mostly full Leader Bldg. I'd love to hear Ink's view given how plugged in he seems to be into the state preservation world.
July 18, 201410 yr I love East 6th too and am always excited to see more residents downtown, but not sure how enthusiastic I am about using the state historic preservation tax credits for projects like this. Unless the Leader Bldg facade is about to fall off or something, sounds like this project won't bring a mostly empty building back on line or restore a historic facade. If it gets the tax credits, the state might end up doing little more than subsidizing an interior conversion that allows K&D to bring higher paying tenants into an already viable building. It's also not clear to me that tightening the class b and c office markets will so directly contribute to new class A office construction. How may blue chip tenants are really left in these older buildings? Seems just as likely that start ups and smaller law firms, etc will have to start heading to the burbs if class b/c rents start creeping up too much, so at some point we may just be trading office tenants for apartments rather than growing downtown. Similarly, it's possible that subsidizing these conversions delays new residential construction by sopping up more rental demand. I don't mean to sounds like a downer, just questioning whether one of our policy levers needs to be tightened up to maximize the benefits it produces. I'd much rather see state money go to things like the mostly empty May Co building than the mostly full Leader Bldg. I'd love to hear Ink's view given how plugged in he seems to be into the state preservation world. All very good points!
July 18, 201410 yr I love East 6th too and am always excited to see more residents downtown, but not sure how enthusiastic I am about using the state historic preservation tax credits for projects like this. Unless the Leader Bldg facade is about to fall off or something, sounds like this project won't bring a mostly empty building back on line or restore a historic facade. If it gets the tax credits, the state might end up doing little more than subsidizing an interior conversion that allows K&D to bring higher paying tenants into an already viable building. It's also not clear to me that tightening the class b and c office markets will so directly contribute to new class A office construction. How may blue chip tenants are really left in these older buildings? Seems just as likely that start ups and smaller law firms, etc will have to start heading to the burbs if class b/c rents start creeping up too much, so at some point we may just be trading office tenants for apartments rather than growing downtown. Similarly, it's possible that subsidizing these conversions delays new residential construction by sopping up more rental demand. I don't mean to sounds like a downer, just questioning whether one of our policy levers needs to be tightened up to maximize the benefits it produces. I'd much rather see state money go to things like the mostly empty May Co building than the mostly full Leader Bldg. I'd love to hear Ink's view given how plugged in he seems to be into the state preservation world. Strap, thanks for posting my thoughts for me :). There is a lot to think about with here. I almost wish that K&D would announce that they've bought two buildings--and that they're converting one to all residential and moving the office tenants to the 2nd building. Just thinking out loud. Lots of these tenants simply aren't candidates for class A space. I'd hate to think we're kicking tenants out of downtown/out of the city to add more apartments. I'm all for more residential, but some of this needs a closer look to better understand the e eventual impacts.
July 18, 201410 yr I love East 6th too and am always excited to see more residents downtown, but not sure how enthusiastic I am about using the state historic preservation tax credits for projects like this. Unless the Leader Bldg facade is about to fall off or something, sounds like this project won't bring a mostly empty building back on line or restore a historic facade. If it gets the tax credits, the state might end up doing little more than subsidizing an interior conversion that allows K&D to bring higher paying tenants into an already viable building. It's also not clear to me that tightening the class b and c office markets will so directly contribute to new class A office construction. How may blue chip tenants are really left in these older buildings? Seems just as likely that start ups and smaller law firms, etc will have to start heading to the burbs if class b/c rents start creeping up too much, so at some point we may just be trading office tenants for apartments rather than growing downtown. Similarly, it's possible that subsidizing these conversions delays new residential construction by sopping up more rental demand. I don't mean to sounds like a downer, just questioning whether one of our policy levers needs to be tightened up to maximize the benefits it produces. I'd much rather see state money go to things like the mostly empty May Co building than the mostly full Leader Bldg. I'd love to hear Ink's view given how plugged in he seems to be into the state preservation world. Strap, thanks for posting my thoughts for me :). There is a lot to think about with here. I almost wish that K&D would announce that they've bought two buildings--and that they're converting one to all residential and moving the office tenants to the 2nd building. Just thinking out loud. Lots of these tenants simply aren't candidates for class A space. I'd hate to think we're kicking tenants out of downtown/out of the city to add more apartments. I'm all for more residential, but some of this needs a closer look to better understand the e eventual impacts. Very true. Also you are trading a larger number of people (office workers) for a smaller number of people in the building (residents).
July 18, 201410 yr It would be interesting to track where the office tenants in Leader, Standard, (maybe someday Rockfeller, Caxton, Halles, and others?) go after the buildings are converted to residential. If the majority move to 60's/70's office towers that have lost their appeal, it is probably a win-win. If many of them end up outside of downtown (where office space is almost never converted), it could be wash or loss for the region. To Straphanger's point, a significant piece of the scoring for state tax credits is the vacancy rate of the building. So a half-occupied building would have less of a chance of getting credits than one that has been completely empty for more than a year. Perhaps the DCA should become active in helping the current tenants relocate within downtown, stabilizing the vacancy rates of buildings that are not ideal for immediate conversion.
July 18, 201410 yr Does anyone know if the Leader Building is considered Class C or B? Good question. Considering it's 101 years old, I'm hedging that it's a Class C building. But I don't know enough about its floor layouts, technology infrastructure, etc. It's also not clear to me that tightening the class b and c office markets will so directly contribute to new class A office construction. How may blue chip tenants are really left in these older buildings? Seems just as likely that start ups and smaller law firms, etc will have to start heading to the burbs if class b/c rents start creeping up too much, so at some point we may just be trading office tenants for apartments rather than growing downtown. Similarly, it's possible that subsidizing these conversions delays new residential construction by sopping up more rental demand. I don't mean to sounds like a downer, just questioning whether one of our policy levers needs to be tightened up to maximize the benefits it produces. I'd much rather see state money go to things like the mostly empty May Co building than the mostly full Leader Bldg. My response is here...... http://www.urbanohio.com/forum2/index.php?topic=4266.msg717172#msg717172 "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
July 22, 201410 yr It would be interesting to track where the office tenants in Leader, Standard, (maybe someday Rockfeller, Caxton, Halles, and others?) go after the buildings are converted to residential. If the majority move to 60's/70's office towers that have lost their appeal, it is probably a win-win. If many of them end up outside of downtown (where office space is almost never converted), it could be wash or loss for the region. To Straphanger's point, a significant piece of the scoring for state tax credits is the vacancy rate of the building. So a half-occupied building would have less of a chance of getting credits than one that has been completely empty for more than a year. Perhaps the DCA should become active in helping the current tenants relocate within downtown, stabilizing the vacancy rates of buildings that are not ideal for immediate conversion. I look at this as a "win win". Areas on Chester, Payne, Superior, St. Clair East of ninth are now being looked at. To me this says downtown is growing and re-developing or re-imaging itself. There are always going to be a few casualties, but I do not believe just because a building is going to take on a new life that the current tenants will be out.
August 19, 201410 yr Leader Building in downtown Cleveland fetches $5.4 million in sale to K&D Group CLEVELAND, Ohio -- The K&D Group, Inc. has purchased the Leader Building for a downtown Cleveland office-to-apartment conversion project. Property records show that the 16-story office building, at 526 Superior Ave., fetched $5.4 million in a transaction that closed Monday. The Plain Dealer reported in July that K&D, an apartment company based in Willoughby, planned to buy the Leader Building as a long-term redevelopment play. K&D hopes to maintain part of the 322,600-square-foot building as offices and to keep retail on the ground floor. Within two to three years, the developer could start converting most of the floors to housing. Doug Price, K&D's chief executive officer, has said that the building could house 230 apartments. The office space is roughly 60 percent full. http://www.cleveland.com/business/index.ssf/2014/08/leader_building_in_downtown_cl.html#incart_river ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ So the building is selling for $5.4 million. Last month's article mentioned, "An asset manager at Carlyle Development Group, which owns the property, couldn't be reached for comment. A New York investor, Carlyle paid $4 million for the building in late 2004 but declined to sell it in late 2012 for nearly $7.7 million -- the top bid in an online auction. The Cuyahoga County Fiscal Office now estimates that the real estate is worth $2.7 million." I bet they wished they would have sold in 2012.
August 28, 201410 yr A necessary step to make the building's renovation/conversion into apartments (and some offices) eligible for tax credit financing.... http://planning.city.cleveland.oh.us/landmark/agenda/2014/08282014/index.php Cleveland Landmarks Commission CITY HALL - ROOM 514 - 9:00 AM AGENDA - August 28, 2014 CLEVELAND LANDMARK NOMINATION 1. Leader Building 580 Superior Avenue "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
December 11, 201410 yr I thought this property was a couple years away from starting. Unless this is just some prelim work. Idk would you look for subs this early? 12 mil is a good amount. The Leader Apartment Building (Convert Historic Office Bldg) Bid Ends: Dec 19, 2014 Valuation: $12,000,000 Owner Type: Private Location: OH (Cuyahoga) DodgeReport #: 201400616665 v. 2 Description: Existing 16 Story 322,600' sq ft Project Type: Apartments/Condominiums Type of Work: Alterations, Interiors
December 11, 201410 yr The articles in the past weeks about K&D buying the Halle Building noted that K&D would redevelop the Leader Building first, over the next couple of years. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 16, 20159 yr Here come the city approvals.... http://planning.city.cleveland.oh.us/bza/agenda/2015/crr06-22-2015.pdf Board of Zoning Appeals JUNE 22, 2015 9:30 Calendar No. 15-119: 526 Superior Avenue Ward 3 Joe Cimperman 9 Notices K & D Group, owner, proposes to change use of existing 16 story commercial/office building to mixed use commercial/office and 224 residential units on levels 4-15 in an E5 General Retail Business District. The owner appeals for relief from the following sections of the Cleveland Codified Ordinances: 1. Section 355.04(b) which states that in an ‘E’ area district, the maximum gross floor of a residential building is limited to 1 ½ times the lot size. Per section 357.03(b) , for a building to be occupied in part or entirely for Class A residential Occupancy in the Central Business District, the maximum gross floor limitation formula in Section 355.04 may be exceeded by 3 ½ times, allowing a floor area of 5 ¼ the lot area. For the 21,282 square foot lot the permitted maximum gross floor area is 111,730.5 square feet: a gross floor area of 393,895 square feet is proposed. 2. Section 357.01© which states that the rear and interior side yards are required for residential buildings in General Retail Business District. 3. Section 357.03(b) which states that a rear yard of 30 feet is required, no rear yard is proposed. 4. Section 357.09(b)(2)© which states that an interior side yard not less than ¼ the height of the building is required and no interior side yard is proposed. (Filed May 19, 2015) "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 30, 20159 yr Cleveland's Leader Building, Akron's United Building win historic tax credits (photos) By Michelle Jarboe McFee, The Plain Dealer on June 30, 2015 at 11:00 AM, updated June 30, 2015 at 11:05 AM CLEVELAND, Ohio – Four Northeast Ohio real estate projects won $7.75 million in historic-preservation tax credits this week, boosting the odds of more apartments in Cleveland and a boutique hotel on Akron's South Main Street. The Ohio Development Services Agency announced $27.5 million in tax credits Tuesday morning during a news conference in Toledo. The awards marked the 14th round of a popular program that helps developers and investors remake historic buildings, most of which are empty or near-vacant. The program, launched in 2007, recently reached a milestone – its 100th finished project. The newest crop of winners includes Cleveland's Leader Building, a downtown office property set for a mixed-use conversion; the small Gund Brewing or Scott Drug building on West 25th Street, just south of Lorain Avenue; the Stuyvesant Motor Co. Building on Prospect Avenue near Cleveland State University; and Akron's United Building, set to become a 65-room hotel. MORE: http://www.cleveland.com/business/index.ssf/2015/06/clevelands_leader_building_akr.html "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
September 10, 20159 yr K&D closes on $62 million financing package for Leader Building conversion project September 10, 2015 UPDATED 3 HOURS AGO By STAN BULLARD Look for conversion of the 15-story Leader Building to a primarily residential building to begin immediately, Willoughby-based K&D Group announced Thursday, Sept. 10. Doug Price, K&D principal and CEO, said in a news release that work is beginning soon because the company recently closed on a $62 million financing package for the project. ...Price said in a phone interview that PNC provided $32 million in financing for the project and agreed to take the federal tax credits. The state of Ohio also has provided a $2.5 million, low-interest loan for demolition and asbestos abatement in the property, he said. K&D has about $9 million in equity in the project, including $3 million in state historic tax credits it can recoup after the redo is finished. K&D expects to complete the installation of 224 one and two-bedroom apartments in the structure by July 2017. MORE: http://www.crainscleveland.com/article/20150910/NEWS/150919982/kd-closes-on-62-million-financing-package-for-leader-building "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
September 10, 20159 yr ^That's great news! However K&D always seems to rename these apartment buildings with a clumsy name. Why not just The Leader Residence...instead of The Residence at The Leader. https://www.instagram.com/cle_and_beyond/https://www.instagram.com/jbkaufer/
April 26, 20169 yr Went to the dentist today in the Leader. They have cleaned the back of the building and the difference is amazing! I'm sure someone has an old picture but this used to be BLACK. Sounds like K&D is pretty behind schedule but making progress. Dr. Rosenblitt is moving into an amazing space on the first floor that used to be a bank. I had a tour late last year and even though it was in rough shape a lot of the original architecture was intact. The skylights are also being redone. Should be a great project. Sent from my iPhone using Tapatalk
April 30, 20169 yr To add to the above, here is a quick shot out front. Not much to see but work continues.
June 9, 20169 yr If you go down Vincent or 6th, you'll see this beast of a crane: It appeared to be taking HVAC related stuff to the roof.
June 9, 20169 yr The Leader could use an extensive bath as well. https://www.instagram.com/cle_and_beyond/https://www.instagram.com/jbkaufer/
June 10, 20169 yr Was there ever any overall plans released for Leader building re-development other than the possible number of residential units going in (i couldn't find anything)? Specifically will there be any upgrades to the ground level retail? I think an upgrade to Porcelli's and the coffee shop next door, Tabu, would be a fantastic idea. It doesn't have to be anything major either, I don't think. Maybe a little expansion of the square footage, if possible. Also something like the warm weather accordion style sliding glass doors/wall for Tabu. It would be a great place to sit outside and have the morning espresso at. I'm excited for this whole 6th, Short Vincent area. Actually kinda anxious because of all the residential coming on line. I believe all the near-by parcels that have been examples of poor land usage for so many years will quickly become very apparent to everyone. Leader, Garfield building and possibly 515 residential tower, this will become a hot little area and fast.
June 15, 20169 yr Cleveland Planning Commission Agenda for June 17, 2016 Ordinance No. 713-16(Ward 3/Councilmember McCormack): Authorizing the Director of Capital Projects to issue a permit to 526 Superior Avenue Ltd. to encroach into the public right-of-way beneath Superior Avenue by installing, using, and maintaining an electrical vault and lid. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 30, 20168 yr They're power washing the East 6th side of The Leader Building. https://www.flickr.com/photos/jborger/27720649310/
October 18, 20168 yr It's really nice to see these buildings redeveloped and more people living downtown. I love it.
October 19, 20168 yr ^Is the Leader redevelopment complete? Is the entire building apartments or just some? Any condo units or just apartments? how many units?
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