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New lives set for local office buildings

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Editor’s Note: This article was updated on Thursday, July 7th at 8:50 am to correct the spelling of the surname of Cyndie O’Bryon, Vice President of Colliers Cleveland...

Another voice is being discussed about the future of the office as companies ponder the future of the office footprint and encourage employees to continue their telecommuting options.

That is the voice of the market. It’s a classic combination of spending millions of dollars, researching data, and sticking your thumb into the air to detect in which direction change is flowing.

Wangard Cos in Milwaukee, Wisconsin. Consider the recent sale of Commerce Park IV and Commerce Park V office buildings to our affiliates.

Oneguard’s affiliate, led by Stewart Oneguard, a veteran office building broker and owner of office buildings active in several real estate segments, last month in buildings near Chaglin Boulevard and Green Road. I invested $ 7 million.

Plan: Transform the 8-story Commerce Park IV building into 147 apartments with a rooftop patio, a Highland Park golf course, and views of downtown Cleveland on the horizon. Meanwhile, the new Commerce Park V building gets the latest information Wangard explains as essential to a highly competitive market, with the perfect technical services and flexible meeting space demanded by creative tenants and young professionals.

More basically, the team of Cyndie O’Bryon and Wangard, Vice Presidents of Colliers Cleveland, will stick to the rest of the tenants in Commerce Park IV and try to sell them on the move to Commerce Park V.

In an online video interview, Wangard said there are several reasons for the housing strategy.

For one thing, Cleveland is physically far from other major office markets, so he said it features abundant office space.

“In Milwaukee, companies that run major offices often choose Chicago, which is considered a commute distance,” he said. “Many of Cleveland’s office products are from the 1970s and rarely contain asbestos.”

On the contrary, Oneguard was surprised at how old the inventory of apartments in the beachwood area was, despite a very strong housing market and a prestigious school district.

“Projects such as the expansion of a nearby university hospital will bring people who want to live nearby to work in the area,” he added.

Meanwhile, the existing office will be demolished by the new owner of the office building at 30041 Lakeland Blvd. According to Raymond Sack, a building commissioner for the city of Wickriff, a self-storage center that occupies most of the structure.

The seller, an affiliate of Progressive Corporation, has moved the training center, which occupied most of the building, to a building near the Mayfield Village headquarters.

Progressive said the pandemic decided to remove the building before changing the office tenant’s proposal, but the change in use is surprising to veteran office leasing agents because it eliminates the intrinsic value of the office environment. It should be.

Kirchoff Cos in Poughkeepsie, NY. The new owner, an affiliate of the company, has received city approval to recast the office space as a mini-warehouse operation, but due to the high visibility of the highway, it will pay $ 3.4 million for 80,000 square feet. I was ready. Foot properties.

Even another bidder, though unsuccessful, did not want a structure for continued use in the office.

Jason Laver, Senior Vice President of Cushman & Wakefield Cresco Real Estate Brokers, said he led a group of investors who implemented the structure to convert it to industrial use, partly because it was used as a warehouse before it was owned by Progressive.

“I felt there might be some play there because the industrial market in Lake County is so strong,” Labor said in an interview. In a sense, a huge building is a little chameleon. Originally built in 1962 as a traditional discount chain, the Spartan Store.

Another factor shaping the proposed future of Commerce Park IV as an apartment is its design.

Architect Jim Heller, now an economic development consultant for the city of Beachwood, recalled the purpose of the late Kenneth Young, the developer of the building, and created a high-quality office building down to the core. The structure is made up of concrete columns and post-tensioned concrete floors, rather than steel decks with concrete on them.

As a result, the structure is quieter than the other methods and is useful in luxury condominiums, both Heller and Oneguard said. Another factor is that Commercial Park IV was built on a garage with 360 underground spaces, which is attractive to apartment tenants.

In addition, Heller said the underground garage was built to take full advantage of the site and provide enough surface area for Young’s next project, Commerce Park V.

The downtown Cleveland residential area was developed over the last three decades by converting old office and warehouse buildings into hotels, but the pandemic’s pandemic on the nationwide office market has empowered this move. I’ve been.

RentCafe, an online apartment listing service, estimates that in 2021, the Adaptive Reuse Project increased the supply of apartments nationwide by 32,000 suites, 40% of which was the former office structure.

Jeremy Steiger, a partner at Beachwood’s Lee & Associates brokerage firm, said rising construction costs were a factor in determining the next stage of some old suburban office buildings.

“Renovating office space for new tenants is expensive,” he said. “Given the typical rent, you can’t easily cover the cost.”

Oneguard also sees office buildings adapting to the demands of thriving companies in today’s economy.

“Otherwise, they will shrink as tenants,” he said. “It may be better to use some of that office space, which is expensive to refurbish for a new tenant, as something else.”

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