Frank Sinito has sky-high hopes for real estate portfolio

 

Frank Sinito recently bought the 57-story Key Tower and the attached 400-room Marriott Cleveland Downtown in a $267 million deal. It's a long reach for a Cleveland native who started out with a 14-suite apartment complex and a bar in the suburbs.

 

But at 54 with a tireless devotion to work, he's fine-tuning things at the Key Center complex and has his eye on another big downtown building and renovation project.

 

On Sept. 1, Sinito will move the last of about 90 employees of his Millennia Cos. to Key Tower and is eagerly undertaking enhancements to Ohio's tallest skyscraper, as well as the hotel.

 

Asked what's next for him and Millennia in the wake of an epic transaction, Sinito said he's hoping to launch the multimillion-dollar conversion of the massive former Huntington Building — now called Union Trust, in honor of its original name — on the northeast corner of Euclid Avenue and East Ninth Street.

 

 

http://www.crainscleveland.com/article/20170820/NEWS/170829989/frank-sinito-has-sky-high-hopes-for-real-estate-portfolio

Very informative article.

 

The Huntington Bldg. discussion was a bit of a personal surprise.  Was unaware the owners were shopping it around and/or looking for investors.  BIG YELLOW LIGHT...although in the back of my mind, for some unexplained reason, I was always suspicious of this out of town firm and their ability to get this massive project off the ground.

 

Maybe that 25 million tax credit should have gone to the May Co. Building after all.

I hit the pay wall for Crain's.  What's the quick summary of the project?

AML RightSource is headquartered at 200 Public Square...

 

New York private equity firm invests in Cleveland-based AML RightSource

August 21, 2017

By SCOTT SUTTELL

 

New York private equity firm Clarion Capital Partners LLC on Monday, Aug. 21, announced it has made an investment in AML RightSource, a Cleveland company that provides clients with anti-money laundering, Bank Secrecy Act and financial crimes compliance services.

 

Specific terms of the investment, which closed last Friday, Aug. 18, were not disclosed. On the "About Us" page on its website, Clarion says it focuses "on equity investments in the range of $15-$50 million with enterprise values of $50-$200 million."

 

...AML RightSource has about 575 total full-time employees, including about 410 in Cleveland, according to the email.

 

MORE:

http://www.crainscleveland.com/article/20170821/NEWS/170829961/new-york-private-equity-firm-invests-in-cleveland-based-aml

^"A spokeswoman said via email that Clarion "now has a majority stake" in AML RightSource"

 

That's not good.....another CLE company owned by someone else who could just move it out of the city.

Why so fatalistic? They could also use the investment to expand it's staffing levels here as well as in new markets. When it comes to staffing you get more bang for the buck here in Cleveland than you do in other, more expensive coastal locations.

^"A spokeswoman said via email that Clarion "now has a majority stake" in AML RightSource"

 

That's not good.....another CLE company owned by someone else who could just move it out of the city.

 

Yeah, in some situations you're right. But capital investment in the city's businesses is typically a good thing.

Also most of the time when a private equity company buys into another firm, there are rarely any HQ moves...unlike being bought by a larger competitor like when Office Max or BP were purchased.

^Ok, thanks. I feel better!

 

clarion owns or has major stakes in a wide variety of companies, including cross pens and imax. i dont think they have moved around or dismantled anything.

 

https://www.clarion-capital.com/portfolio.aspx

Engineering firm expands in downtown Cleveland

August 25, 2017

By STAN BULLARD 

 

Nexus Engineering Group, a Cleveland-headquartered, full-service engineering firm serving heavy industry and oil and gas concerns, was committed to staying downtown as it outgrew its prior offices.

 

However, it wound up being able to do that and more in its current building, consolidating to all of the 14th floor in the 16-story Hanna Building, 1422 Euclid Ave., where it formerly had three suites.

 

Previously, Nexus had offices on Hanna's second, third and fifth floors, a situation that developed as the firm grew from a 2005 startup to its current size with 75 staffers in the theater district. The new office also has room for the company to add 25 more workers here, Nexus said in a Thursday, Aug. 24, news release. The 14th-floor office has 23,000 square feet of space and doubles the firm's prior size.

 

MORE:

http://www.crainscleveland.com/article/20170825/NEWS/170829870/engineering-firm-expands-in-downtown-cleveland

 

So this is the fourth 20+ story building under construction downtown since 2000. Sorry, I was in Toronto a couple weekends ago. Not impressed. :)

 

Downtown needs to have four 20+ story buildings under construction at this time next year -- The Beacon, Playhouse Square tower, nuCLEus, and Sherwin Williams. I'm pissed that #5 (Medical Mutual) isn't going to be part of this mix.

 

Perhaps an in depth discussion is best in a different thread, but my sources at S-W indicate that the new HQ seems less likely now than it did 6 months ago.

 

So here's a different thread for you to expand upon your disappointing tidbit YABO713[/member].  :whip:

Big catch for downtown. Very few large blocks of space available in CBD, with exception of Higbee Building. https://t.co/cQz6VWr3oh

Townsend is located in the Skylight Office Tower in the Tower City complex. So is this transaction good for Cleveland?

 

Aon Group Acquiring Real Estate Consultant Townsend Group for $475 Million

Colony NorthStar Taking a Profit on its 84% Interest in Townsend

By Mark Heschmeyer

September 5, 2017

 

Aon to acquire leading real estate investment advisor Townsend Group; extending leadership position in investments Acquisition reinforces Aon's position as a leading global professional services firm providing risk, retirement and health solutions

 

Aon, a global professional services firm providing a broad range of risk, retirement and health solutions, agreed to acquire The Townsend Group, majority-owned by Colony NorthStar Inc., a global real estate and investment management firm.

 

London-based Aon is to pay for $475 million for Cleveland-based Townsend subject to certain purchase price adjustments. No other financial terms were disclosed by Aon.

 

MORE:

http://www.costar.com/News/Article/Aon-Group-Acquiring-Real-Estate-Consultant-Townsend-Group-for-$475-Million/193890

They (Aon) have a huge presence in Chicago...which may or may not bode well for cle.

WEDNESDAY, SEPTEMBER 6, 2017

Zombies say: start building a downtown Cleveland office tower soon

 

In the movies, zombies can't put two words together. In Cleveland real estate development, they are sharing a subtle yet compelling message of encouragement.

 

Zombies in downtown Cleveland are former office buildings awaiting renovation with significant portions of them due to be converted to non-office uses, usually residential and occasionally hotel. Some of them will retain some office uses. But the portion of these buildings due to be converted is the zombie portion. It's a zombie because it's no longer being marketed as an office property. It's dead as an office building, but won't be demolished. It's coming back to life.

 

So what are these zombies saying? "Start building a large amount of new office inventory in downtown Cleveland."

 

MORE:

http://neo-trans.blogspot.com/2017/09/zombies-say-start-building-downtown.html

Erieview Tower seeks historic status.

 

http://www.cleveland.com/metro/index.ssf/2017/09/government_wants_to_know_if_er.html

A press release....

 

Wednesday, September 13, 2017

BrightEdge Cleveland Doubles in Size

Hiring momentum continues as the Cleveland office becomes a driver of the company’s continued growth

CLEVELAND, OHIO (PRWEB) SEPTEMBER 13, 2017

 

BrightEdge, which is leading the convergence of SEO and Content Marketing, has announced the continued growth of its Cleveland office, which has nearly doubled in number of employees since January.

 

The Silicon Valley-based company relocated to its present 10,000 square-foot space in Tower City at the beginning of 2017. Within a span of six months, BrightEdge Cleveland has expanded from 21 to 40 employees. The company anticipates a bright future of continued job growth in Cleveland and is committed to making further contributions to the Ohio city.

 

“The Cleveland office has become a driver of our continued growth,” said Jim Yu, Co-Founder and CEO of BrightEdge. “In a relatively short period of time, we’ve selected an office and hired a talented team that is now driving material growth for our business”

Yu added, “We are now in the midst of securing additional office space to accommodate future hiring plans. We will continue to look downtown for office space and will expand our search into several nearby neighborhoods and communities”

 

BrightEdge first opened its doors in Cleveland in late 2015, citing the area’s talent pool, marketing leadership and higher education institutions as the driving force behind the decision to establish in Cleveland. The city’s robust startup scene also appealed heavily to BrightEdge leadership; Cleveland is among one of the top-rated startup cities in the Midwest, with notable VC funding and presence of investors.

 

“I’m pleased BrightEdge has continued to grow and contribute to the prosperity of Cleveland,” said Cleveland Mayor Frank G. Jackson. "We are proud to count them among the many successful Information Technology companies that call the city home."

 

Additionally, Cleveland has been the hub of content marketing since 2007 when Joe Pulizzi founded what is now the Content Marketing Institute (CMI). CMI’s 7th annual flagship event and largest content marketing event on the planet, Content Marketing World, is being held this week at the Huntington Convention Center of Cleveland and returning to Cleveland on September 4-7, 2018.

 

“I turned down an opportunity in Pittsburgh to come to Cleveland,” said Andrew Merchant, a senior account executive with BrightEdge who has been with the company for a year and a half. “Seeing the city grow over 5 years made it pretty easy to stay.

 

“You can be very opportunistic in Cleveland to start your own business, and that’s similar to the way we feel here at BrightEdge –– we’re a cutting edge Silicon Valley startup that is in the heart of Midwest, and there is no slowing us down in growth.”

 

According to Phil Misiak, senior account executive with BrightEdge, the company’s employees are active participants in the Cleveland community, from daily commutes to work by bike or foot, to participating in softball tournaments and attending conferences across the city.

 

As the BrightEdge team continues to grow in Cleveland, so does its commitment to the wider community. The team donates to the Cleveland Food Bank and local families in need.

 

“We intend to give back to this city that has enabled us to grow along with it,” Yu said. “Our company still sees plenty of opportunity for continued job growth and community involvement.”

 

###

 

About BrightEdge

BrightEdge, the global leader in enterprise SEO and content performance, empowers marketers to transform online content into business results such as traffic, conversions and revenue. The BrightEdge S3 platform is powered by a sophisticated deep learning engine and is the only company capable of web-wide, real-time measurement of content engagement across all digital channels, including search, social and mobile. BrightEdge’s 1,500+ customers include global brands such as 3M, Microsoft and Nike, as well as 57 of the Fortune 100. The company has eight offices worldwide and is headquartered in Foster City, California. Visit http://www.brightedge.com for more information.

 

###

Cleveland makes push for Amazon HQ2. http://fox8.com/2017/09/15/cleveland-cuyahoga-to-make-push-for-amazon-headquarters/

Already being discussed here: https://www.urbanohio.com/forum2/index.php/topic,15104.msg874604/topicseen.html#new

I think that makes 5,122 threads in which Amazon HQ2 is being discussed (or attempted).

Not too much meat on this report.....

 

Q3 2017

Office Insight

 

Cleveland ushers in a new set of landlords as improving

market conditions attract out-of-state investors

 

The composition of ownership in Cleveland’s office market has changed

dramatically in recent years. Annual sales volumes have increased steadily

since 2010 and are now approaching prerecession levels. In just the last two

years, more than $550.0 million worth of office assets traded hands in

Cleveland. What is unique about this cycle is the increased level of investment

from out-of-state firms. Three groups in particular have amassed significant

portfolios in Cleveland: Hertz, Shelbourne and Somera Road. These investors

have acquired more than 3.0 million square feet of office space in Cleveland

through transactions totaling $301.8 million. A common set of themes led

these groups and others to make investments in Cleveland, including higher

yield returns, relatively low barriers to entry, and Cleveland’s underlying

market fundamentals.

 

So what does all this mean for tenants? Many of the recent transfers can be

categorized as value-add investments, and the new owners have signaled

their intent to make significant upgrades to the properties. Tenants will enjoy

additional amenities, upgraded finishes in common areas, and improvements

to the building's operating systems. However, along with these upgrades,

landlords will command higher rents on renewals and new lease

negotiations.

 

Outlook

 

Fundamentals in the Cleveland office market will continue to improve into

2018. Demand growth will remain modest in the 1.0 percent range, while

limited construction will ensure a continued decline in vacancy. This will be

particularly pronounced downtown where residential conversions are rapidly

shifting market conditions. Rents will continue to appreciate gradually as the

market tightens and owners reposition assets. Investment activity will remain

elevated with nearly 3.0 million square feet of product on the market.

 

http://www.us.jll.com/united-states/en-us/Research/US-Cleveland-Office-Insight-Q3-2017-JLL.pdf?32062f59-4e22-43ac-93ec-2548ddcaec24

October 24, 2017 7:49 am      UPDATED 3 DAYS AGO

BrightEdge doubles downtown staff, hunts for new space

By CHUCK SODER 

 

BrightEdge has roughly doubled the number of people it employs at its new office in downtown Cleveland — and now it's looking for a new office.

 

The content marketing software company today employs about 40 people on the fifth floor of Terminal Tower — up from 21 in January.

 

Now the company is looking for a new office "to accommodate future hiring plans," according a statement in news release from BrightEdge CEO Jim Yu. BrightEdge is looking for space downtown and in "several nearby neighborhoods and communities," he stated.

 

MORE:

http://www.crainscleveland.com/article/20171024/news/139851/brightedge-doubles-downtown-staff-hunts-new-space

Cleveland office of Fisher Phillips to relocate downtown

SHERRY KARABIN

Legal News Reporter

Published: November 9, 2017

 

Attorneys and staff in the Cleveland office of the management-side labor and employment law firm Fisher Phillips are preparing to relocate to downtown Cleveland.

 

In mid-December the office’s 39 employees will begin the move from 9150 S. Hills Blvd. to their new location on the 40th floor of 200 Public Square, which is currently being renovated.

Regional managing partner Steve Nobil said the move would allow the firm to continue to grow the Cleveland office, while providing key features that will enable attorneys to improve client service.

 

MORE:

http://www.akronlegalnews.com/editorial/19064

Terry Coyne's office market report. The highlight? Downtown office absorption in the first three quarters of 2017 was 222,248 SF. For the entire suburban market it was 156,930 SF.

 

http://www.terrycoyne.com/uploads_pdf/3Q17-Cleveland-Office-Market.pdf

Office leases on list aren't quite as big this year

http://www.crainscleveland.com/article/20171203/news/144341/office-leases-list-arent-quite-big-year

^One great mention in that article was that Class A office space vacancy dropped to 13.5%.  Hopefully it will continue to drop to under 10% so new construction could be justified.

Finally heard a rumbling about a new Sherwin Williams headquarters tower... The rumor from a good source is that she expects S-W to go forward with the tower but that combining two large companies is taking and will take a long time.

^thats great to hear, In the consolidation of the companies, how many jobs are moving to cleveland?

December 18, 2017 12:58 pm      UPDATED 2 DAYS AGO

Akron-based Levin Swedler Kennedy merges with Pease & Associates of Cleveland

By DAN SHINGLER   

 

Akron-based accounting firm Levin Swedler Kennedy has merged its practice with Cleveland's Pease & Associates, the two firms announced Monday, Dec. 18.

 

The combination was effective as of Dec. 1, according to a news release, and Levin Swedler Kennedy's 15 professionals are now part of a team of 80 certified public accountants at Pease.

 

Pease remains headquartered in Cleveland but indicated it will maintain an Akron office as it picks up new business in the Rubber City, thanks to the addition of the new firm. Pease now has Levin's former offices at 3501 Embassy Parkway in Akron, in addition to its office in Downtown Cleveland on Euclid Avenue and at 3201 Enterprise Parkway in Beachwood, according to its website.

 

MORE:

http://www.crainscleveland.com/article/20171218/news/146116/akron-based-levin-swedler-kennedy-merges-pease-amp-associates-cleveland

JLL report: Cleveland becoming a lure to out-of-state investors

December 21, 2017 | Dan Rafter

 

Out-of-state investors are discovering Cleveland. And they like what they see.

 

That’s the takeaway from a recent report from JLL. The CRE giant reported that in the last two years, office investment sales in Cleveland have totaled more than $550 million. And investors from states other than Ohio account for a good chunk of these sales, JLL says.

 

The biggest benefit of all this new investment activity? JLL says that the new owners of commercial properties throughout Cleveland plan to reposition their assets. This means that tenants will see upgraded finishes and added amenities. The bad news for tenants? Once investors finish their upgrades, higher rents will follow.

 

MORE:

http://www.rejournals.com/articles/2017/12/21/out-of-state-investors-discovering-cleveland

^Despite the headline, the article spends more time talking about CLE real estate investors than those from out-of-state.

^^majority of office buildings downtown Cleveland are about 25 - 30 years old now.  North Point, AECOM, One Cleveland Center, PNC building, etc.  These buildings can hardly call themselves "Class A" anymore in terms of amenities/finishes.

^^majority of office buildings downtown Cleveland are about 25 - 30 years old now.  North Point, AECOM, One Cleveland Center, PNC building, etc.  These buildings can hardly call themselves "Class A" anymore in terms of amenities/finishes.

 

Isn't "Class A" relative, though?

^^majority of office buildings downtown Cleveland are about 25 - 30 years old now.  North Point, AECOM, One Cleveland Center, PNC building, etc.  These buildings can hardly call themselves "Class A" anymore in terms of amenities/finishes.

 

Isn't "Class A" relative, though?

 

Maybe. In Cleveland Key Tower, 200 Public Square and Ernst & Young are the only Class A office buildings. If those same buildings were in NYC 200 Public Square drops to Class B and even Key Tower may drop to Class B.

Although, In NYC, class B rents are higher than Cleveland class A rents.

Electronic Merchant Systems plots move to downtown Cleveland

By STAN BULLARD   

 

Downtown Cleveland will gain 180 more workers by mid-year as Independence-based Electronic Merchant Systems moves its headquarters to the 14-floor 250 West Huron Building at Tower City Center under a just-inked lease.

EMS, which provides a suite of computerized financial services for retailers, will occupy all the fourth floor and part of the fifth of the skyscraper, according to a news release the company issued late Thursday, Jan. 4, with comments from Mayor Frank Jackson and Cavs owner Dan Gilbert. Gilbert operates the structure through his Detroit-based Bedrock Real Estate concern.

The building is best known by its former moniker as the Chase Financial Plaza and dates from 1991. The namesake financial services firm curtailed substantial operations there in 2008 and much of that space has been empty as the property traded from Cleveland-based Forest City Realty Trust to Gilbert-controlled companies, primarily because Gilbert also owns the Ritz-Carlton Plaza, which also serves as the hotel serving Jack Cleveland Casino.

 

http://www.crainscleveland.com/article/20180105/news/147496/electronic-merchant-systems-plots-move-downtown-cleveland

This is awesome news, Downtown Cleveland Alliance worked very hard to get EMS downtown and had many other downtown business including mine talk to them and answer all of their questions about relocating last year.

Where is Sherwin-Williams on its new headquarters building?

 

The latest I've heard:

https://www.urbanohio.com/forum/index.php/topic,4266.msg883676.html#msg883676

 

Staying optimistic about this here.  A S-W tower on the northwest quadrant would really complete Public Square.

 

Unfortunately, I just heard some bad news that SW has dropped consideration of building a new HQ tower. That's all I got. Sorry.

Where is Sherwin-Williams on its new headquarters building?

 

The latest I've heard:

https://www.urbanohio.com/forum/index.php/topic,4266.msg883676.html#msg883676

 

Staying optimistic about this here.  A S-W tower on the northwest quadrant would really complete Public Square.

 

Unfortunately, I just heard some bad news that SW has dropped consideration of building a new HQ tower. That's all I got. Sorry.

 

Well, that's that. 

Rents rise and options dwindle in office market

http://www.crainscleveland.com/article/20180114/news/148426/rents-rise-and-options-dwindle-office-market

Where is Sherwin-Williams on its new headquarters building?

 

The latest I've heard:

https://www.urbanohio.com/forum/index.php/topic,4266.msg883676.html#msg883676

 

Staying optimistic about this here.  A S-W tower on the northwest quadrant would really complete Public Square.

 

Unfortunately, I just heard some bad news that SW has dropped consideration of building a new HQ tower. That's all I got. Sorry.

 

Not to beat a (possibly) dead horse... but is that really it KJP?  We went from years of speculation about a SW Tower and a Medical Mutual building, and now they are both dead.  Isn't SW out of space?

^And I do know the employees aren't thrilled about being on Hinkley Pkwy

Apparently SW is OK with expanding into other buildings.

My office has been DYING to move our firm. But it's not economically feasible at the moment, and we have a relatively large budget.

Growing Higley Co. will move '1,300 feet' to new headquarters on Euclid Ave.

www.crainscleveland.com/article/20180121/news/149241/growing-higley-co-will-move-1300-feet-new-headquarters-euclid-ave

Nonprofit exits 925 Euclid for big Reserve Square space

 

http://www.crainscleveland.com/article/20180128/news/149986/nonprofit-exits-925-euclid-big-reserve-square-space

 

In what would have ranked as one of last year's largest downtown office deals, the nonprofit [Western Reserve Area Agency] late last year agreed to lease 57,000 square feet of office space on three levels on the East 13th Street side of K&D Group's Reserve Square apartment-office complex, 1701 E. 12th St.

 

About 300 employees will move to Reserve Square by late fall. They will occupy space on three floors.

 

And a snippet on the Union Trust building.

 

Although Hudson Holdings secured a $25 million catalytic state historic tax credit in late 2015 for the project, it has not proceeded, and insiders say Hudson has been actively seeking a buyer or big investor to make the project a go.

 

Hudson last month secured an extension until July 1 to demonstrate progress on the project, according to Penny Martin, a public information officer for the Ohio Development Services Agency.

Does anyone know of a Class A building downtown with available office space for a law firm of 12-15 employees.

 

Might be out of our lease earlier than expected and need to scope out possibilities that are somewhat reasonably priced.

^ Here's what's listed as available on loopnet:

 

http://www.loopnet.com/ohio/cleveland_office-space-for-lease/

K&D Group gives CBRE downtown office leasing assignment

http://www.crainscleveland.com/article/20180202/blogs14/150601/kd-group-gives-cbre-downtown-office-leasing-assignment