Medical Mutual soon might reacquire its headquarters

 

Circumstances at its longtime headquarters in the 10-story Rose Building in downtown Cleveland may make it attractive for Medical Mutual of Ohio to stay in place.

 

The health insurer, which has 1,000 workers stationed at the building at 2060 E. Ninth St., for almost a year has conducted a search for a new headquarters, or perhaps staying in place, that also considers combining its suburban and downtown workforces at another location.

 

The buy-and-stay possibility has surfaced in a brief in a Cuyahoga County foreclosure case between its landlord, an affiliate of Los Angeles-based Bentley Forbes Group referred to as MMCO LLC, and the holder of the mortgage on the property.

 

http://www.crainscleveland.com/article/20170730/NEWS/170739989/medical-mutual-soon-might-reacquire-its-headquarters

This would buy them time to make a better deal for a new HQ location. I don't see them staying put in an obsolete office building.

This would buy them time to make a better deal for a new HQ location. I don't see them staying put in an obsolete office building.

 

I seldom do this, KJP[/member] but I disagree with you.

 

I think a move to purchase is a sign that they're committed to revamping the building. It's becoming more and more unusual for companies to actually own their HQ, and acquiring the property, in my opinion, shows a doubling down of sorts on the Rose Building.

I seldom do this, KJP[/member] but I disagree with you.

 

I think a move to purchase is a sign that they're committed to revamping the building. It's becoming more and more unusual for companies to actually own their HQ, and acquiring the property, in my opinion, shows a doubling down of sorts on the Rose Building.

 

They may want minimal perturbation while medical insurance issues get sorted out in DC. Staying put is probably the least-cost option. That doesn't say it wouldn't be worth their while to bring the suburban offices downtown. There's ample space nearby that could be buffed up by 2020.

I seldom do this, KJP[/member] but I disagree with you.

 

I think a move to purchase is a sign that they're committed to revamping the building. It's becoming more and more unusual for companies to actually own their HQ, and acquiring the property, in my opinion, shows a doubling down of sorts on the Rose Building.

 

Everything that I've been hearing is that MM is facing lots of uncertainties. It is either in negotiations with a developer/landlord, waiting for the mess in Washington DC to sort itself out, or both. Articles from last year also provide clear evidence that MM doesn't like it's existing HQ building which lacks open-floor layouts and is very costly to heat and cool. Add to that the uncertainty regarding the serious, nationwide financial troubles faced by its building owner, BentleyForbes (which also owns its 500-employee Toledo office). MM has been reluctant to make a big any big real estate moves until these issues have sorted themselves out.

 

Let's look at which of the uncertainties MM can control.... MM can only control half of the negotiations with a new building developer/landlord, it has virtually zero control over the mess in Washington DC, but it can take complete control of the ownership/financial troubles faced by the owner of its current HQ. By doing that, MM gains time, bargaining power and thus greater control over negotiations with a new building developer/landlord and it buys MM time to wait out the mess in Washington DC. It could be a long-term commitment but I doubt it. The acquisition goes against MM's policy of owning its buildings. They did it because it gives them more control. I don't see them owning it or staying there for long.

 

The only other thing I can see happening here is that someone like K&D steps in and agrees to buy the Rose Building and signs an open-ended lease with MM. MM could stay there as long as it likes, until such time it decides to leave. That way K&D can amortize at least part of the purchase price over the next 3-5 years with revenues from a stable office user occupying 100 percent of the building. That would reduce the overall costs of a residential conversion later on by not having as much of the residential rents amortizing the acquisition debt.

My wife works at MM. From what she has heard, if they were to buy their building it would be a long-term commitment to staying put. Apparently they are trying to work out a deal with BF by the end of September. This transaction is further complicated by the financial troubles of the seller that others have alluded to.

Well that would suck.

My wife works at MM. From what she has heard, if they were to buy their building it would be a long-term commitment to staying put. Apparently they are trying to work out a deal with BF by the end of September. This transaction is further complicated by the financial troubles of the seller that others have alluded to.

 

Stupid question - what is BF

My wife works at MM. From what she has heard, if they were to buy their building it would be a long-term commitment to staying put. Apparently they are trying to work out a deal with BF by the end of September. This transaction is further complicated by the financial troubles of the seller that others have alluded to.

 

Stupid question - what is BF

 

Bentley Forbes Group

The word is that MM may have difficulty acquiring the Rose Building in a timely manner due to the involvement of a receiver in Bentley Forbes' ultimate dissolution. From what I understand is that MM will make its decision on whether to fish or cut bait on the Rose Building in September. However there is information that MM is looking at a number of alternatives including existing buildings downtown and in the suburbs. One of the sites mentioned was American Greetings' vacated headquarters in Brooklyn. And yes, consolidation of MM's Northeast Ohio offices is still on the table.

 

BTW, the American Greetings offices are too small to accommodate MM's HQ but could accommodate the consolidated suburban offices, if MM keeps its HQ at Rose or has to move the 380,000 sf to another downtown site.

However there is information that MM is looking at a number of alternatives including existing buildings downtown and in the suburbs. One of the sites mentioned was American Greetings' vacated headquarters in Brooklyn. And yes, consolidation of MM's Northeast Ohio offices is still on the table.

 

BTW, the American Greetings offices are too small to accommodate MM's HQ but could accommodate the consolidated suburban offices, if MM keeps its HQ at Rose or has to move the 380,000 sf to another downtown site.

 

AG's former buildings are in bad shape. Not to mention the location is very depressing and adjacent to a b.s. speed trap courtesy of Lindale. If my company was looking to relocate there, I'd start looking for another job.

 

 

The new owners of the old AG HQ are looking at a tear-down/build-new option for that site, which they envision to be more for industrial uses.

http://www.cleveland.com/business/index.ssf/2014/07/american_greetings_sells_brook.html

 

The warehouse sector in NE Ohio is booming, and not just Amazon distribution centers. Look at all of the warehouse/light-industrial development in Mentor, Glen Willow, etc.  I suspect Lichter/Semarjian are aiming for a piece of that action.

However there is information that MM is looking at a number of alternatives including existing buildings downtown and in the suburbs. One of the sites mentioned was American Greetings' vacated headquarters in Brooklyn. And yes, consolidation of MM's Northeast Ohio offices is still on the table.

 

BTW, the American Greetings offices are too small to accommodate MM's HQ but could accommodate the consolidated suburban offices, if MM keeps its HQ at Rose or has to move the 380,000 sf to another downtown site.

 

AG's former buildings are in bad shape. Not to mention the location is very depressing and adjacent to a b.s. speed trap courtesy of Lindale. If my company was looking to relocate there, I'd start looking for another job.

 

Linndale's speed trap no longer exists in the traditional sense thanks to the state Supreme Court

Linndale's speed trap no longer exists in the traditional sense thanks to the state Supreme Court

 

I think he was referring to Memphis Road. Anyway....

^I think he's talking about speed trap camera on 117th.

New article from Michelle Jarboe, just posted:

 

http://realestate.cleveland.com/realestate-news/2017/08/medical_mutual_cfo_rose_buildi.html

 

Medical Mutual CFO: Rose Building in downtown Cleveland is 'first preference' for HQ (photos)

CLEVELAND, Ohio - Court actions this week put Medical Mutual of Ohio one step closer to buying its downtown Cleveland headquarters building - a deal that would keep the insurer's central offices in the center city.

 

Medical Mutual recently offered to pay $37.9 million for the Rose Building and annex, the historic office complex where the company is the sole tenant. The property is at the center of a foreclosure case working its way through Cuyahoga County Common Pleas Court. A court-appointed receiver, charged with preserving the building's value during litigation, is seeking a judge's sign-off on the sale.

 

A hearing on the matter is scheduled for Aug. 14.

<snip>

So back to MM. I'm also told that MM will likely be forced to move out of its existing office building in Toledo -- which also is owned by BentleyForbes. MM has had it with BentleyForbes.

New article from Michelle Jarboe, just posted:

 

http://realestate.cleveland.com/realestate-news/2017/08/medical_mutual_cfo_rose_buildi.html

 

Medical Mutual CFO: Rose Building in downtown Cleveland is 'first preference' for HQ (photos)

CLEVELAND, Ohio - Court actions this week put Medical Mutual of Ohio one step closer to buying its downtown Cleveland headquarters building - a deal that would keep the insurer's central offices in the center city.

 

Medical Mutual recently offered to pay $37.9 million for the Rose Building and annex, the historic office complex where the company is the sole tenant. The property is at the center of a foreclosure case working its way through Cuyahoga County Common Pleas Court. A court-appointed receiver, charged with preserving the building's value during litigation, is seeking a judge's sign-off on the sale.

 

A hearing on the matter is scheduled for Aug. 14.

<snip>

 

Pretty tough to beat that deal. Wonder where the suburban offices will go?

Good question. There is no lack of class B office space with attached parking. Hopefully they are interested in bringing them all downtown.

 

It's funny how these real estate deals work. If the Rose building were actually empty, it would sit around for a year or two before getting auctioned off for half the amount MM offered. MM being the motivated buyer is stuck paying a premium to avoid having to move.

Well even if a LL turnkeys space, it is very costly to move (setting aside likely increase to rental rate).  I typically see around $10/sf to move, but with economies of scale, it'd probably be less, guessing $4-$5.  Plus, if they wanted, they could probably do another sale leaseback on a 20 year term and sell the thing for around $120-$140/sf.   

Good question. There is no lack of class B office space with attached parking. Hopefully they are interested in bringing them all downtown.

 

It's funny how these real estate deals work. If the Rose building were actually empty, it would sit around for a year or two before getting auctioned off for half the amount MM offered. MM being the motivated buyer is stuck paying a premium to avoid having to move.

 

Still, for them, a new building would be much more expensive even if they leased it vs buying the Rose Building. And then there's the moving expenses. While there is a lot of Class B space downtown, much of it is zombie space that's really not on the market because it's due for conversion, nor is it in contiguous blocks of space large enough to accommodate MM.

Medical Mutual's deal to buy downtown Cleveland headquarters building is moving forward

 

CLEVELAND, Ohio -- Medical Mutual of Ohio got the green light this week to buy its longtime headquarters building, in a $37.9 million transaction that will keep a major employer in downtown Cleveland and avert a foreclosure.

 

http://realestate.cleveland.com/realestate-news/2017/08/medical_mutuals_deal_to_buy_it.html

Welp, the tower was a pipe dream anyways lol

^ On the positive side, at least they're not moving out to the subrurbs

^Yes in immediate future. However, if things get clear with healthcare and it makes sense to proceed with a new building then maybe in 2-5 years.  I don't think they want to remain in the location they are at.  I believe it would make sense to consolidate what they can in more modern offices. 

I agree. MM was facing some uncertainties with its HQ. Buying it resolves those uncertainties. But I don't think it makes their operations more efficient. A consolidated office complex that's in a modern building with open floors can achieve that for them. And perhaps they're already moving employees around...

 

I happened recently to go by their data center in Beachwood during regular business hours and there were only three cars in the parking lot. While this operation had only about 20 employees, unless most people walked, biked or bussed to work that day, I'd say that MM has moved people out of that site.

^I guess that would only be computer operations staff. Nowadays that can be pretty slim as tape jockeys aren't needed and many things can be done remotely.

  I know i knew people that worked at that location as consultants. I assumed that when i heard someone worked in programming they were there. Now i wonder if they weren't over in Strongsville area or maybe Independence?  Its a big operation, somewhere.  Those are people that are typically brought into a consolidated HQ. I'm not aware that there is much software development happening downtown. But all i know is from what i heard 10-15 years ago.

Sources are telling me that yes, Medical Mutual will stay in the Rose Building downtown. Other NE Ohio offices will be consolidated into the former American Greetings HQ in Brooklyn.

 

Maybe someday these two facilities will be further consolidated into a single building, perhaps downtown. But if does happen, it won't be for many years.

Sources are telling me that yes, Medical Mutual will stay in the Rose Building downtown. Other NE Ohio offices will be consolidated into the former American Greetings HQ in Brooklyn.

 

I sincerely hope they fixed the sopping wet drop ceiling that continually rained musty debris down on the AG artists. 

Medical Mutual signed a lease agreement to move some offices to Brooklyn as they have introduced legislation to provide economic incentives for their tenantship. The new location of these offices will be located at the former American Greetings headquarters in Brooklyn.

 

http://www.cleveland.com/brooklyn/index.ssf/2017/09/brooklyn_to_introduce_legislat.html

Here is Crains take on it.

 

Medical Mutual spokeswoman Tiffini Bloniarz confirmed the company has signed a letter of intent to pursue a long-term lease option at 1 American Road.

"We selected that facility since it is centrally located and offers Medical Mutual the space necessary to accommodate our needs at a reasonable cost," Bloniarz said. She would not speak to how the company plans to handle its downtown staff but added, "We expect no significant impact to the city of Cleveland."

The target of Medical Mutual's attention is likely to be a four-story office building that formerly housed executive offices of the greetings card maker in Brooklyn. The offices are attached to much larger single-floor space on the 1.5 million square feet of the property that is being converted to a multitenant commerce park.

 

http://www.crainscleveland.com/article/20170908/news/134921/medical-mutual-ohio-weighs-move-some-workers-brooklyn

 

(btw if you have trouble getting past Crains firewall, open up the article in the "incognito tab" .  It always works in Chrome not sure of others).

Re: MM potential move.

 

In reading the articles concerning the possible MM move, what I do no see is any mention of the 450-500 employees currently based in the Toledo area. Anyone have any insight into whether, or not, MM will be moving those jobs to the CLE area?

Good news. When I first saw the headline pop up on my Crain's email, I was afraid it was going to be offices relocating from downtown. Glad to see it won't be taking from downtown at all. This is good news for Brooklyn and good news for the region, even if Toledo doesn't consolidate here. These are jobs moving from the sprawling outer suburbs to an established inner ring suburb that has better transportation links to the rest of the region.

Boo. I wanted more. Maybe when the feds stop screwing around with health insurance, the market will settle down enough for MM to make long-term plans....

 

September 21, 2017 8:31 am

Medical Mutual closes $37 million deal for its HQ

By STAN BULLARD     

 

Medical Mutual of Ohio became the owner of the Rose Building complex in downtown Cleveland after paying $37 million to buy it from a lender foreclosing on the health insurer's landlord, an affiliate of Bentley Forbes Group.

 

Cuyahoga County land records filed on Monday, Sept. 18, show Medical Mutual paid $10.3 million for the property, but separate court filings say it paid a total of $37 million for the 10-story, 381,000-square-foot building to cover the property purchase and other claims associated with the foreclosure.

 

Cuyahoga County Judge Cassandra Collier-Williams on Aug. 29 authorized the sale by court-appointed receiver Donald Green, according to online Common Pleas Court records. The judge's order found that BFG Holdings 2000 LLC had defaulted on a $47 million loan it used to buy the property from Medical Mutual in 2000. The landlord owes a total of $60 million on the loan, including interest, legal and other fees.

 

MORE:

http://www.crainscleveland.com/article/20170921/NEWS/170929982/medical-mutual-closes-37-million-deal-for-its-hq?utm

Boo. I wanted more. Maybe when the feds stop screwing around with health insurance, the market will settle down enough for MM to make long-term plans....

 

Disappointing, but reasonable. A single payer scheme will blow away the whole company, unless they can become some kind of payment center.

Boo. I wanted more. Maybe when the feds stop screwing around with health insurance, the market will settle down enough for MM to make long-term plans....

 

Disappointing, but reasonable. A single payer scheme will blow away the whole company, unless they can become some kind of payment center.

 

But Bernie Sanders said single payer will work and the rich will pay for it?

The PD version

 

 

Medical Mutual buys downtown Cleveland HQ; suburban office deal in Brooklyn seems likely

 

Medical Mutual of Ohio bought its downtown headquarters building this week, putting an end to speculation about whether the insurer's corporate base and more than 1,000 jobs will stay put in central business district.

 

And with incentive legislation working its way through Brooklyn's City Council, it appears that Medical Mutual will consolidate its suburban operations at the former American Greetings Corp. headquarters complex in 2020. The insurer, with roughly 700 suburban employees, has signed a non-binding letter of intent to lease upwards of 300,000 square feet in Brooklyn.

 

Medical Mutual has been reluctant to discuss its overall strategy for moving workers around and managing a series of leases that expire in three years. But public records depict a partial win for downtown Cleveland - keeping a major employer, but failing to lure the suburban operations into the city - and potential relief for Brooklyn, which is trying to fill the void American Greetings left by moving to Westlake last year.

 

http://realestate.cleveland.com/realestate-news/2017/09/medical_mutual_buys_downtown_c.html

Team Allegro has completed the tenant rep deals that enabled Medical Mutual to consolidate from 6 buildings to 2 in #NEO (HQ and Ops Center) incl MMO’s new Ops Ctr at former American Greetings HQ.

 

Medical Mutual leases old American Greetings space

http://www.crainscleveland.com/article/20180617/news/165336/medical-mutual-leases-old-american-greetings-space

"The insurer, with roughly 700 suburban employees, has signed a non-binding letter of intent to lease upwards of 300,000 square feet in Brooklyn."

 

In what suburbs were MM's employees that will be consolidated at the American Greetings site?  (Brooklyn's gain is whose loss?)

^Beachwood, Copley and Strongsville

"The insurer, with roughly 700 suburban employees, has signed a non-binding letter of intent to lease upwards of 300,000 square feet in Brooklyn."

 

In what suburbs were MM's employees that will be consolidated at the American Greetings site?  (Brooklyn's gain is whose loss?)

 

Linndale's gain lol. I hope the MM employees like traffic tickets.

^Ok, thanks. I don't feel so bad!

 

13 minutes ago, infrafreak said:

 

I spoke to someone today who works at Medical Mutual who directly told me they were looking to consolidate at AG's old HQ in Brooklyn.

 

 

@Mov2Ohio apparently was at AG's old HQ to work on consolidating MM's non-downtown offices there.

As medical mutual is no longer in DownTown, I think its best we remove the downtown title to this thread.

26 minutes ago, tastybunns said:

As medical mutual is no longer in DownTown, I think its best we remove the downtown title to this thread.

Med Mutual purchased their building downtown in 2017. AG is to consolidate their 700+ suburban employees.

9 hours ago, tastybunns said:

As medical mutual is no longer in DownTown, I think its best we remove the downtown title to this thread.

 

Not correct. They have two office buildings. They have their headquarters downtown and their support offices in Brooklyn. I hoped that they would consolidate everything in a new building downtown but, alas, it was not to be.

2 hours ago, KJP said:

 

Not correct. They have two office buildings. They have their headquarters downtown and their support offices in Brooklyn. I hoped that they would consolidate everything in a new building downtown but, alas, it was not to be.

Supposedly, and I'm loosely quoting the CEO here, "We considered building a 'Taj Mahal' but the board shot it down".   I guess that comes with the territory being a mutual company.  But yes, the Rose building and the annex on Prospect is still very much the HQ.  Brooklyn is going to be IT/OPS.  It got completely gutted down to the concrete floors/pillars and is being refitted. Currently drywalling/cabling/etc.  If Mov2Ohio was on the roof I've got a handful of companies I could guess he works for.

Maybe someday there will be a more visionary board that will result in Medical Mutual unifying its offices under one roof.

 

How much of the American Greetings headquarters will Medical Mutual occupy? And is the company still growing?

Medical Mutual will be in the entire 4 story office building but none of the attached warehouse  space.  Yes, the company is still growing and recently acquired a smaller Dayton area insurance company.

49 minutes ago, sizzlinbeef said:

Medical Mutual will be in the entire 4 story office building but none of the attached warehouse  space.  Yes, the company is still growing and recently acquired a smaller Dayton area insurance company.

Hopefully this will spark redevelopment and growth in Brooklyn. Although not in Cleveland, the development in adjacent cities is necessary for a successful region.