Yay! I was waiting for them to officially break this news. I can tell you that the job growth here will be quite accelerated over the next few years. We are basically busting at the seams in our current building.

Here is Michelle's take on the NRP move and as usual with mjarboe[/member] we learn a few more details that we didn't know.

 

http://realestate.cleveland.com/realestate-news/2017/05/nrp_group_plans_headquarters_m.html

https://www.thestreet.com/story/14141559/1/ibm-to-move-thousands-of-workers-back-into-the-office.html?puc=yahoo&cm_ven=YAHOO&yptr=yahoo

 

IBM's decision to kill telecommuting and bring its workers back into the office may give a boost to office construction everywhere.  IBM said the projected real estate savings were never achieved and productivity suffered.

Nothing says productivity like commute times, interoffice tensions, and employee relocation costs.

^ One theorist suggested it was also a lower-cost way for IBM to reduce headcount.

Sherwin-Williams wins U.S. antitrust approval to buy Valspar: FTC

 

Paint-maker Sherwin-Williams (SHW.N) has won U.S. antitrust approval to buy U.S. rival Valspar Corp (VAL.N), the Federal Trade Commission said on Friday.

 

To gain antitrust approval, the FTC required the companies to sell Valspar’s North America Industrial Wood Coatings Business, which makes stains, sealants and other products used for kitchen cabinets and other goods.

 

The FTC, which valued the deal at $11.3 billion, said that the asset sale was needed because just three companies currently make the wood stains and sealants. A merger of two of them, Sherwin-Williams and Valspar, could lead to higher prices for the products.

 

https://www.google.com/amp/mobile.reuters.com/article/amp/idUSKBN18M263

 

Next stop, new skyscraper?

KJP - I think the time table will all depend on cash reserves. From what I understand, they bought Valspar almost entirely with their own money. Lord knows S-W has it, but it will be interesting to see how much they seek in financing or if they'd like to enlist the help of a developer and become part of a larger project - though I have heard that would not be S-W's preference.

 

 

They could build the skyscraper just from the $420 million received in the required sale of Valspar’s North America Industrial Wood Coatings.

KJP - I think the time table will all depend on cash reserves.

 

Does the Trump or Congressional tax bill change depreciation rules? If that's on the table, it could delay lease-vs-buy decisions.

I wouldn't expect Sherwin Williams to be ready to make a decision about a new headquarters anytime soon anyway. There's lots of organizational, staffing, site selection and other issues to sort through in the meantime.

Weren't they ready to announce the new headquarters at one time before the Valspar deal?  How far along had they gotten in that process?  Did they have to scrap everything and start over and just create a larger building?  Just curious

Weren't they ready to announce the new headquarters at one time before the Valspar deal?  How far along had they gotten in that process?  Did they have to scrap everything and start over and just create a larger building?  Just curious

 

To KJP's above point, I think there was nothing more than an acknowledgment that demand for a new HQ exists.

 

But no, they had not really said anything explicitly. And from what I am hearing, there will be an additional 400-600 employees in Cleveland as a result of S-W's effort to move Valspar employees to Cleveland. Having said that, I am not sure how much of that staff will be research vs administrative; that dynamic will likely change how big the complex has to be and if it will or will not include the scientific wing of the company.

There were rumors that S-W was going to announce a new HQ at its big sales convention in Orlando in the winter of 2016. But it never happened and then in March the proposed merger with Valspar was announced. But I didn't get the impression that specifics of a new HQ were going to be announced in Orlando, only that S-W needed one. The reason why I got that impression is that sources in the development community were saying S-W was still considering different sites during the winter. Then everything went quiet on the HQ front once the Valspar deal became public.

 

Regarding Valspar's research vs. administrative employees, and who is staying in Minneapolis and who is going, this March 2017 article may offer some guidance:

 

What is known is that Minneapolis will lose Valspar’s corporate headquarters. However, some operations are expected to stay, including recently renovated research labs that sit next to the corporate offices, city officials have said. Corporate employees affected by the merger already have started to find employment elsewhere. As of one year ago, Valspar had 10,500 employees in 25 countries, including about 600 in Minneapolis.

SOURCE: http://www.startribune.com/higher-expenses-severance-packages-eat-into-valspar-profit/415690524/

 

Then, there was this 2014 which offered a breakdown of administrative/research employment, although Valspar had grown as a company since:

 

In January, about 270 corporate employees will return to the former headquarters building at 3rd Street and 11th Avenue S., which underwent a $30 million renovation and reopened in June as an R&D center for the paint and coatings company. The R&D center houses 110 scientists.

SOURCE: http://www.startribune.com/valspar-will-move-back-to-its-former-minneapolis-headquarters/274681811/

 

So it sounds like upwards of 110 research employees will stay in Minneapolis and perhaps 400 corporate employees will move to Cleveland. That leaves nearly 100 employees unaccounted for, and those may be some of the positions being bought out due to their responsibilities duplicated by already existing Cleveland employees. But note that Valspar won't be absorbed into S-W and disappear. It will remain as a corporate entity, albeit a subsidiary of S-W. So it's possible that some duplicity in job functions will be tolerated.

 

Even if it's "just" 400 jobs moved to Cleveland, that's perhaps four additional floors in a new skyscraper that wouldn't have been there. S-W has 2,800 employees in its corporate HQ, potentially growing to 3,200 with the addition of Valspar. And then there's the contingency space to allow for growth. S-W has been growing year-over-year at a rate of better than 6 percent over the past five years. So if that continues, in five years S-W's corporate HQ employment could approach 4,000.

 

And that doesn't include the 350-400 workers at the Breen Technology Center by the river. Breen is at least 30 years old, based on info I was able to find about S-W replacing 26-year-old equipment at the facility several years ago. S-W could continue to maintain that building or move its functions into the new HQ.

I wouldn't expect Sherwin Williams to be ready to make a decision about a new headquarters anytime soon anyway. There's lots of organizational, staffing, site selection and other issues to sort through in the meantime.

 

I may be wrong about what I posted in the quote, above. The article I posted in my last message referenced Valspar giving buyouts to employees who aren't making the move to Cleveland. That tells me S-W has already made its organizational and staffing decisions. So a new headquarters tower could be coming sooner than I had previously thought.

 

EDIT: the news source for Valspar's R&D staffing staying in Minneapolis is from city officials. Not Valspar/S-W. From what I know of the interaction between corporate and R&D at S-W, proximity between them is VERY important. And by that, I mean walking distance proximity. S-W likes face-to-face interaction with its R&D staff. That's possible now with the Breen center on the other side of Canal Road from the HQ. That becomes a tiny bit more difficult with S-W moving to someplace like the Jacobs lot on Public Square. For Valspar, that becomes impossible with R&D left behind in Minneapolis.

 

If R&D for both Valspar and S-W moves into the same building with corporate, that's another 400-500 employees under the same roof with 3,200 +/- corporate staff that could be growing to 4,000 employees in about five years, and who knows how many in the next 10, 20 or more years. If I'm S-W, I design a tower to accommodate at least 5,000 workers.  If we're talking up to 500 R&D workers, I'd figure about 150,000 sf. And for another 4,500 workers (including growth contingencies for the long-term, but a sub-lease in the short-term), I'd figure about 900,000 sf. That's a total of 1.1 million sf, including first-floor retail/atrium space. With floorplates averaging 25,000 sf, we could be talking a 44-story building (not including parking).

so how tall of a skyscraper are we looking at? Are we talking taller than Key Bank?

I was doing the math and editing my previous post while you were writing that. :)

Just found this on the Cuyahoga County GIS:

 

Sherwin-Williams

Breen Technology Center

 

601 CANAL RD

CLEVELAND, OH. 44113

PPN# 101-20-003

 

(3 buildings)

 

BUILDING ONE

 

YEAR BUILT -- 1948 (remodeled 1986)

Usable Area -- 92,600 sf

Total Story Height -- 5

Air Conditioning -- CENTRAL

Heat Type -- HOT-WATR/STM

Exterior Walls -- BRICK

Framing -- REINFORCED CONCRETE

Wall Height -- 12

Construction Class -- CLASS B

Half Baths-- 8

 

BUILDING TWO

 

YEAR BUILT -- 1998

Usable Area -- 45,680 sf

Total Story Height -- 4

Air Conditioning -- CENTRAL

Heat Type -- FORCED-AIR

Exterior Walls -- INS MTL

Framing -- FIRE RESISTANT

Wall Height -- 15

Construction Class -- CLASS C

Bathrooms -- 6

 

BUILDING THREE

 

YEAR BUILT -- 2005

Usable Area -- 2,013 sf

Total Story Height -- 1

Air Conditioning -- PACKAGE A/C

Heat Type -- FORCED-AIR

Exterior Walls -- BRICK

Framing -- FIRE RESISTANT

Wall Height -- 22

Construction Class -- CLASS C

Bathrooms -- 0

I may be wrong about what I posted in the quote, above. The article I posted in my last message referenced Valspar giving buyouts to employees who aren't making the move to Cleveland. That tells me S-W has already made its organizational and staffing decisions. So a new headquarters tower could be coming sooner than I had previously thought.

 

EDIT: the news source for Valspar's R&D staffing staying in Minneapolis is from city officials. Not Valspar/S-W. From what I know of the interaction between corporate and R&D at S-W, proximity between them is VERY important. And by that, I mean walking distance proximity. S-W likes face-to-face interaction with its R&D staff. That's possible now with the Breen center on the other side of Canal Road from the HQ. That becomes a tiny bit more difficult with S-W moving to someplace like the Jacobs lot on Public Square. For Valspar, that becomes impossible with R&D left behind in Minneapolis.

 

If R&D for both Valspar and S-W moves into the same building with corporate, that's another 400-500 employees under the same roof with 3,200 +/- corporate staff that could be growing to 4,000 employees in about five years, and who knows how many in the next 10, 20 or more years. If I'm S-W, I design a tower to accommodate at least 5,000 workers.  If we're talking up to 500 R&D workers, I'd figure about 150,000 sf. And for another 4,500 workers (including growth contingencies for the long-term, but a sub-lease in the short-term), I'd figure about 900,000 sf. That's a total of 1.1 million sf, including first-floor retail/atrium space. With floorplates averaging 25,000 sf, we could be talking a 44-story building (not including parking).

 

1. The Jacobs lot is not THAT far of a walk to Canal!

2. I'd love see another 50+ story bldg in the skyline---and that could be done even if SW only needed 20 floors and the remainder by other tenants.

3. Regarding SW using 44 stories---is the work of R&D suitable for a vertical office bldg? Seems like most such facilities are short-wide bldgs.  But also, if they are doing testing and use volatile chemicals in processes, is it a good idea to have R&D (and the inherent dangers) in the same bldg as office workers?  Does the zoning code even allow it?

 

1. The Jacobs lot is not THAT far of a walk to Canal!

 

 

Which is why I said "Tiny."

Just found this on the Cuyahoga County GIS:

 

Sherwin-Williams

Breen Technology Center

 

601 CANAL RD

CLEVELAND, OH. 44113

PPN# 101-20-003

 

(3 buildings)

 

BUILDING ONE

 

YEAR BUILT -- 1948 (remodeled 1986)

Usable Area -- 92,600 sf

Total Story Height -- 5

Air Conditioning -- CENTRAL

Heat Type -- HOT-WATR/STM

Exterior Walls -- BRICK

Framing -- REINFORCED CONCRETE

Wall Height -- 12

Construction Class -- CLASS B

Half Baths-- 8

 

BUILDING TWO

 

YEAR BUILT -- 1998

Usable Area -- 45,680 sf

Total Story Height -- 4

Air Conditioning -- CENTRAL

Heat Type -- FORCED-AIR

Exterior Walls -- INS MTL

Framing -- FIRE RESISTANT

Wall Height -- 15

Construction Class -- CLASS C

Bathrooms -- 6

 

BUILDING THREE

 

YEAR BUILT -- 2005

Usable Area -- 2,013 sf

Total Story Height -- 1

Air Conditioning -- PACKAGE A/C

Heat Type -- FORCED-AIR

Exterior Walls -- BRICK

Framing -- FIRE RESISTANT

Wall Height -- 22

Construction Class -- CLASS C

Bathrooms -- 0

 

Is this a lot consolidation?

I'm not aware of anything recent.

I heard some bad news over the weekend.  Hopefully it's not true, but I heard from a Sherwin employee that due to the Valspar acquisition - the expansion of Sherwin may come outside of downtown.  I forget the location, but certainly not the tower on Public Square that we all wanted.

 

Are they also planning to amend S-W's corporate charter that requires their HQ to be within 1 mile of 601 Canal Road, where the company was founded in 1866?

 

Or put the Valspar subsidiary HQ outside of downtown?

K&D Group Regains Lost Flats Office Building

 

https://www.crescorealestate.com/index.php/news/view/kd-group-regains-lost-flats-office-building

I found out today that One Cleveland Center is for sale by Optima, and apparently they are asking quite a hefty price compared to what they paid.  It could use some updates and now I believe it is almost fully leased.  The property surrounding the parking garage has been for available for development for some time as well.  Would be nice to see this block upgraded and the parking garage land developed to compliment the Avenue District.

I heard some bad news over the weekend.  Hopefully it's not true, but I heard from a Sherwin employee that due to the Valspar acquisition - the expansion of Sherwin may come outside of downtown.  I forget the location, but certainly not the tower on Public Square that we all wanted.

 

Are they also planning to amend S-W's corporate charter that requires their HQ to be within 1 mile of 601 Canal Road, where the company was founded in 1866?

 

Or put the Valspar subsidiary HQ outside of downtown?

 

Did RE Developer in Training delete his post or did he post in another thread? That would be horrible news if SW left downtown. If it meant saving millions of dollars, i'm sure the shareholders would amend the corporate charter to remove the 1-mile radius restriction. that said, i'm not completely up to date on all that goes into amending corporate charters.

Sherwin-Williams covers more of the earth as it completes $11.3 billion Valspar acquisition

http://www.crainscleveland.com/article/20170601/NEWS/170609984/sherwin-williams-covers-more-of-the-earth-as-it-completes-11-3

 

The deal is done.  I found this interesting: "Sherwin-Williams on July 20 will announce financial results for the second quarter ended June 30. At that time, the company said, it will provide its outlook on the combined company for the third quarter and the full year 2017."  Any chance of a HQ announcement at this date?

Sherwin-Williams covers more of the earth as it completes $11.3 billion Valspar acquisition

http://www.crainscleveland.com/article/20170601/NEWS/170609984/sherwin-williams-covers-more-of-the-earth-as-it-completes-11-3

 

The deal is done.  I found this interesting: "Sherwin-Williams on July 20 will announce financial results for the second quarter ended June 30. At that time, the company said, it will provide its outlook on the combined company for the third quarter and the full year 2017."  Any chance of a HQ announcement at this date?

 

Meh, maybe. Normally companies will do that on their call when consumer outlook is low on the brand. A new HQ shows that the company believes its in good financial footing - which S-W very much is. I just am not certain that they will want to touch the HQ issue just yet.

I heard some bad news over the weekend.  Hopefully it's not true, but I heard from a Sherwin employee that due to the Valspar acquisition - the expansion of Sherwin may come outside of downtown.  I forget the location, but certainly not the tower on Public Square that we all wanted.

 

Are they also planning to amend S-W's corporate charter that requires their HQ to be within 1 mile of 601 Canal Road, where the company was founded in 1866?

 

Or put the Valspar subsidiary HQ outside of downtown?

 

Did RE Developer in Training delete his post or did he post in another thread? That would be horrible news if SW left downtown. If it meant saving millions of dollars, i'm sure the shareholders would amend the corporate charter to remove the 1-mile radius restriction. that said, i'm not completely up to date on all that goes into amending corporate charters.

 

He posted it in another thread, and I responded to it here.

I'm confused. Medical Mutual bought Healthspan two years ago and absorbed its supposedly 300 corporate jobs total, spread among Cincinnati and Cleveland. Healthspan is no more. And yet here's real estate market research firm Jones Lang LaSalle saying there were 1,100 Healthspan employees in downtown Cleveland in 2016. What gives? EDIT: the most recent listing for Healthspan's offices says they are in the North Pointe building on Lakeside at East 9th. Anyone here work in that building and can say if Healthspan (or Medical Mututal) is still shown in the building's directory?

 

Also, JLL says there are 3,430 Sherwin-Williams employees in downtown Cleveland. This is close to the numbers I've read about lately (2,800 HQ employees, 300-400 Breen R&D employees). Still, JLL's number is higher than any previous figure I've seen.

 

http://www.jll.com/Cleveland/en-us/Pages/RemoteResearch.aspx?URL=http://www.jll.com/united-states/en-us/research/8197/downtown-cleveland-2017-overview

3. Regarding SW using 44 stories---is the work of R&D suitable for a vertical office bldg? Seems like most such facilities are short-wide bldgs.  But also, if they are doing testing and use volatile chemicals in processes, is it a good idea to have R&D (and the inherent dangers) in the same bldg as office workers?  Does the zoning code even allow it?

 

 

Good question. Is the quantity of volatile chemicals sufficient to threaten the structure of a building? It may be, since the three (S-W, Valspar, PPG) paint/coatings companies I've read about recently keeps their R&D in a building(s) separate from the corporate HQ. Valspar's HQ and R&D are in neighboring buildings in downtown Minneapolis. S-W's HQ and R&D are separate, but practically across the street from each other. And PPG has their HQ downtown and their main R&D facility in suburban Allison Park, plus other R&D facilities in Springdale, Monroeville and Harmar. PPG is considering consolidating these facilities:

http://www.bizjournals.com/pittsburgh/blog/innovation/2014/08/ppg-expands-research-headcount-in-pittsburgh.html

^^Don't forget there are contractors. I have met many people who have worked at Medical Mutual as IT contractors. I would imagine there are dozens working over in Beachwood. I can't speak to S-W, but I imagine they also use contractors but probably not as heavily.

3. Regarding SW using 44 stories---is the work of R&D suitable for a vertical office bldg? Seems like most such facilities are short-wide bldgs.  But also, if they are doing testing and use volatile chemicals in processes, is it a good idea to have R&D (and the inherent dangers) in the same bldg as office workers?  Does the zoning code even allow it?

 

 

Good question. Is the quantity of volatile chemicals sufficient to threaten the structure of a building? It may be, since the three (S-W, Valspar, PPG) paint/coatings companies I've read about recently keeps their R&D in a building(s) separate from the corporate HQ. Valspar's HQ and R&D are in neighboring buildings in downtown Minneapolis. S-W's HQ and R&D are separate, but practically across the street from each other. And PPG has their HQ downtown and their main R&D facility in suburban Allison Park, plus other R&D facilities in Springdale, Monroeville and Harmar. PPG is considering consolidating these facilities:

http://www.bizjournals.com/pittsburgh/blog/innovation/2014/08/ppg-expands-research-headcount-in-pittsburgh.html

 

Ferro's research area was always over on Pleasant Valley road while their HQ was downtown.

I'm confused. Medical Mutual bought Healthspan two years ago and absorbed its supposedly 300 corporate jobs total, spread among Cincinnati and Cleveland. Healthspan is no more. And yet here's real estate market research firm Jones Lang LaSalle saying there were 1,100 Healthspan employees in downtown Cleveland in 2016. What gives? EDIT: the most recent listing for Healthspan's offices says they are in the North Pointe building on Lakeside at East 9th. Anyone here work in that building and can say if Healthspan (or Medical Mututal) is still shown in the building's directory?

 

My daughter's aunt was a contractor for Heathspan, working at North Point, until 5/31.

Did the company lose the contract? Or did the contract come to an end?

 

The reason why I ask is that if these are Under the healthspan Umbrella and they are significant enough to measure over 1,000 workers, what impact will/did this have on Medical Mutual headquarters decision?

Did the company lose the contract? Or did the contract come to an end?

 

The reason why I ask is that if these are Under the healthspan Umbrella and they are significant enough to measure over 1,000 workers, what impact will/did this have on Medical Mutual headquarters decision?

 

She's a pretty high up accounting/IT person so I believe they are scaling down but not close to shutting down.

Gobble, gobble, gobble.....

 

TransDigm Group acquires three aerospace product lines

June 02, 2017

By RACHEL ABBEY MCCAFFERTY   

 

Cleveland-based aircraft component maker TransDigm Group Inc. recently acquired three aerospace product lines for about $100 million, the company announced in a news release.

 

The release did not specify what companies or portions of companies were acquired, and a message left for TransDigm was not returned as of publication on Friday, June 2. The lines have about $32 million in combined revenue, and the acquisition was financed through existing cash in hand, the release stated.

 

The product lines will be consolidated into TransDigm businesses and include "highly engineered aerospace controls, quick disconnect couplings, and communication electronics," the release stated.

 

MORE:

http://www.crainscleveland.com/article/20170602/NEWS/170609956/transdigm-group-acquires-three-aerospace-product-lines

Cleveland City Council approves closing jail, selling police headquarter

 

CLEVELAND, Ohio - Cleveland City Council voted Monday to approve legislation to close the city's jail and to pay Cuyahoga County to house prisoners and suspects.

 

Council also voted to sell the downtown building that houses the city jail and police headquarters to Cuyahoga County. With closure of the jail, the headquarters could be moved to another building downtown.

 

The long-discussed deal is expected to save Cleveland about $5 million a year. Rather than operating a jail, the city would pay the county $99 a day per person to house its prisoners. 

 

The Cuyahoga County sheriff's staff would handle the booking of all prisoners. 

 

http://www.cleveland.com/metro/index.ssf/2017/06/cleveland_city_council_to_appr.html#incart_m-rpt-1

 

The move will take a full 1% of the Class B office space off the downtown Cleveland market.

This article notes the Halle building will be fully leased after NRP's move. 

 

NRP Group plans headquarters move to Downtown Cleveland

 

 

A national apartment developer plans to move its headquarters and more than 100 jobs from Garfield Heights to Downtown Cleveland by early next year.

 

The NRP Group, LLC, has signed a deal to fill the fourth floor of the Halle Building on Euclid Avenue, at the western edge of downtown's Playhouse Square district. The move would involve 116 existing headquarters jobs, plus an unspecified number of workers now scattered across the region.

 

The 43,000-square-foot lease ties up the last notable commercial vacancy at Halle, a former department store turned office building that is slated to undergo a partial residential conversion. Construction on lower-floor offices, including NRP's space, could start next month, with apartments to follow on the building's upper levels.

 

http://www.downtowncleveland.com/news/june-2017/nrp-group-plans-headquarters-move-to-downtown-clev

Just a part of a PR release regarding SW.

 

Sherwin-Williams will announce financial results for the second quarter ended June 30, 2017 on Thursday, July 20, 2017. At that time, Sherwin-Williams will provide its outlook on the combined company for the third quarter and full year 2017, and conduct a conference call to answer questions.  Further details regarding the call will be available in coming weeks.

KJP...you posted today in the Med Mutual thread that the "earliest" (which of course implies it could be later) you anticipate an announcement from Sherwin Williams regarding a new HQ building would be a month from now.

 

Since you seem to be following this development with great interest, I am curious what form you believe that announcement will take when made:

 

1.  We are looking for a new HQ building and are in the process of investigating our needs. (Since actually, despite all the speculation on this board I don't believe at any point in the past couple of years has the company "formally"  stated this...although I could be wrong)

 

2.  We are looking for a new HQ building and are in the process of investigating our needs and evaluating proposals from various developers.

 

3.  We are going to build a new HQ building at this site.

 

4.  We are going to build a new HQ building at this site with this developer.

 

5.  We are going to build a new HQ building at this site with this developer and this is a conceptual rendering of the project.

 

6.  We are going to build a new HQ building at this site with this developer, plans are firm and we are ready to begin the formal design review process.

 

7.  We are going to build a new HQ building at this site with this developer, plans are firm and we will begin construction in early 2018.

Since you seem to be following this development with great interest, I am curious what form you believe that announcement will take when made:

 

Whatever they say, my bet is it will be a low-key announcement, not much noticed outside of Cleveland. The only exception to that would be if the new hqs were something spectacular, like Apple's "cyclotron" building; but spectacular isn't SWP's style.

Frankly Htsguy, I have no idea what to expect. So far, the most that S-W has officially said is "no comment" when asked about a new HQ, which is itself a tacit admission. That later became "we're focused on the Valspar acquisition." If they go back to their "no comment" then the HQ is back in play. But I don't expect them to come out and say anything unless asked. Of course, for investor disclosures, S-W is going to have to say something at some point, but that could be right before they're due to appear on Planning Commission's docket with a formal application -- much like Playhouse Square just did with its tower. I just don't know how far along S-W is at this point in their due diligence.

Real estate service firms move, grow and change

http://www.crainscleveland.com/article/20170613/NEWS/170619922/real-estate-service-firms-move-grow-and-change

Just a part of a PR release regarding SW.

 

Sherwin-Williams will announce financial results for the second quarter ended June 30, 2017 on Thursday, July 20, 2017. At that time, Sherwin-Williams will provide its outlook on the combined company for the third quarter and full year 2017, and conduct a conference call to answer questions.  Further details regarding the call will be available in coming weeks.

 

Unfortunately, I would advise not to get excited for any announcements related to a new HQ building on the second quarter earnings release. Generally, SEC filed earnings releases do not disclose that type of information. They may disclose non-recurring costs related to the acquisition and future synergies (but not at a level that would tip their hand to a new building).

 

Here is the link to the first quarter earnings release: https://www.sec.gov/Archives/edgar/data/89800/000119312517129703/d381903dex99.htm. Similar to other preliminary earnings releases, the CEO will read from the report on a public conference call/webcast and the CEO/CFO will answer questions from analysts about operating results.

Lots of good news in this piece...

 

Digital marketing firm Robots and Pencils plans to march to downtown Cleveland from Beachwood

June 23, 2017

By SCOTT SUTTELL 

 

Write it down: Digital marketing and app development firm Robots and Pencils plans to move to Cleveland from Beachwood and expand its operations here.

 

The Ohio Tax Credit Authority on Friday, June 23, approved a seven-year, 2.27% tax credit for Robots and Pencils for a project that will create 54 jobs, representing $5.94 million in new annual payroll. The company also will retain $2.168 million in existing annual payroll, according to information provided by the state.

 

In a phone interview on Friday afternoon, Robots and Pencils CEO Michael Sikorsky said the company will move this fall to 7,500 square feet in a building at 1215 Superior Ave. in downtown Cleveland. The tax credit will assist with the buildout of the downtown space.

 

Sikorsky said one of the company's core philosophies goes by the acronym "FTT" — follow the talent.

 

"Talent today wants to be downtown, in the heart of the city," he said.

 

The company at present has 38 people in an office at 23245 Mercantile Road in Beachwood, which it added when the company in January merged with a small digital marketing firm, Kinetiq Digital. At the time of the deal, Sikorsky said, there were 13 people in the Beachwood office, so growth has been rapid so far this year.

 

Sikorsky said the downtown Cleveland office will be the U.S. headquarters for Robots and Pencils, which is based in Calgary, Alberta, and develops consumer applications, enterprise software, education platforms and mobile strategy services.

 

MORE:

http://www.crainscleveland.com/article/20170623/NEWS/170629877/digital-marketing-firm-robots-and-pencils-plans-to-march-to-downtown

And then some bad news....

 

Forest City Realty Trust cuts 50 jobs

June 23, 2017

By STAN BULLARD

 

Forest City Realty Trust Inc. (NYSE: FCE) confirmed Friday, June 23, that it has trimmed 29 jobs at its Terminal Tower headquarters as part of a 50-worker downsizing across the nation.

 

Workers will be leaving the company over the next several months as the Cleveland-based real estate empire continues to shed properties, such as its enclosed shopping mall portfolio, that do not fit its focus on large, complicated urban mixed-use projects in 10 major markets nationwide. The home of its headquarters and the firm's founding is not on the list of cities where it plans to continue to make property investments such as Dallas, New York City and San Francisco.

 

MORE:

http://www.crainscleveland.com/article/20170623/NEWS/170629873/forest-city-realty-trust-cuts-50-jobs

State aid will cement NRP's HQ move downtown

June 23, 2017

By STAN BULLARD

 

Talk about dodging a bullet — or more accurately, a corporate loss.

 

As the Ohio Tax Credit Authority on Friday, June 23, approved a seven-year, 1.65% tax credit to an affiliate of real estate owner and developer NRP Group, state records indicate the Garfield Heights company also entertained the possibility of moving to Texas.

 

The document confirmed a rumor that circulated while the apartment and affordable tax-credit residential developer was looking at moving to the Halle Building downtown that it might move to San Antonio, where NRP has substantial holdings.

 

The rumor adds perspective to the potential move south, as companies typically threaten to move outside Ohio to secure the state aid.

 

However, NRP remained in its Northeast Ohio birthplace, although it plans to move to the Halle Building, 1228 Euclid Ave.

 

MORE:

http://www.crainscleveland.com/article/20170623/NEWS/170629868/state-aid-will-cement-nrps-hq-move-downtown

New York Community Bancorp sells Cleveland-based mortgage business to Freedom Mortgage

June 27, 2017

By SCOTT SUTTELL 

 

Freedom Mortgage Corp. said it has agreed to buy $500 million in residential mortgage assets from New York Community Bancorp (NYSE: NYCB) and will hire "select employees in originations, servicing and operations" from the Westbury, N.Y., firm's Cleveland-based mortgage operation.

 

Specific financial terms were not disclosed. The deal includes the right to service more than $20 billion of residential mortgage loans, Mount Laurel, N.J.-based Freedom Mortgage said in a news release. The servicing portfolio includes Fannie Mae- and Freddie Mac-approved loans as well as what Freedom Mortgage called "a relatively small amount" of Ginnie Mae-insured mortgages.

 

A Freedom Mortgage spokeswoman did not immediately return a voicemail asking about the company's plans to retain Cleveland employees from New York Community's mortgage operations here.

 

MORE:

http://www.crainscleveland.com/article/20170627/NEWS/170629810/new-york-community-bancorp-sells-cleveland-based-mortgage-business

 

16.4% office vacancy is Cleveland's lowest in nearly 16 years

http://www.terrycoyne.com/uploads_pdf/2Q17-Cleveland-Office-Market.pdf

 

And that might be artificially high due to the Zombie phenomenon.....

 

CBD Office Market

Zombie Space Impacting Vacancy

 

Eleven properties are negatively impacting the perception of vacant and

available space in the CBD. These properties, termed ‘zombie properties,’

have large blocks of vacant space that are not actively marketed to the office

community. These properties include buildings that are pending conversion

from office to residential, or are functionally obsolete. Downtown Cleveland’s

zombie properties include:

 Standard Building

 Leader Building

 75 Public Square

 Garfield Building

 Halle Building

 Former Cleveland Athletic Club

 925 Euclid Avenue

 Superior Lofts

 Tower at Erieview

 Terminal Tower

 3101 Euclid Avenue

 

The Tower at Erieview has more than 250,000 square feet of vacant space.

However, 180,000 to 225,000 square feet will be converted in the coming years

to residential apartments. Therefore, while the space is vacant, the building

ownership is not actively marketing the space. Zombie space adversely impacts

the vacancy rate of the Class B and Class C CBD markets. The Class B CBD

market has 24.0% vacancy. However, when the zombie property space is

removed from the survey, the vacancy rate declines to 18.2%. This figure

includes Forest City’s expected move to Key Tower. The Class C CBD market

vacancy similarly drops drastically from 22.4% to 15.4% when the zombie

properties are removed. The amount of vacant and available space in the CBD

is overstated when the zombie properties are included.

 

MORE:

http://www.terrycoyne.com/uploads_pdf/Jan%202017%20Zombie%20Placemat.pdf

I just realized there's an older building that's not on that list and has hundreds of thousands of square feet available for an office user(s). This has to be on the radar of the CPD, MM and others searching for a large block of office space...

 

200 Euclid Avenue, Cleveland, OH 44114

 

Description

Prime Retail Space | Former May Company location, 200 Euclid Avenue, Downtown Cleveland.

Entire Building - 760,000 SF of office available in building. Potential mixed-use redevelopment.

 

http://www.loopnet.com/Listing/17661780/200-Euclid-Avenue-Cleveland-OH/