Search
 

One Cleveland Center Sells for $66M

CLEVELAND-The new owner of the 543,352-sf, class A office building here is a group of individual Tenant-in-Common investors, many of whom were completing 1031 exchanges.

By Brian K. Miller | Updated on February 07, 2005

CLEVELAND-One Cleveland Center has changed hands for $66 million. The 543,352-sf, class A office building is 84% leased. Lessees include American International Group, Inc., KPMG, Merrill Lynch and the US General Services Administration.The 31-story building’s chisel-shaped roof is a landmark on the city skyline. The tower offers 360-degree views of the city and Lake Erie. Meridian Realty Investments of Boston acquired the property last fall on behalf of the co-ownership group of Tenant-in-Common investors. The property was transferred to the TIC investors in two phases, the last of which closed last week. Meridian acquired the asset from an entity of Walton Street Capital.Individuals representing 50% of the equity were brought to the table by 1031 Exchange Options of Walnut Creek, CA. The company’s SVP of real estate Christian Mirner tells GlobeSt.com there is no significant near-term tenant rollover in the building and that two of the tenants are planning expansions within the building. The proforma holding period is five years and the proforma IRR is 12% to 15%, he adds. “It’s a good asset to preserve capital and provide cash flow and the potential for long-term appreciation,” says Mirner. “There will be some lease rollover during the ownership holding period, but we have substantial reserve to accommodate it. The business plan is to stabilize the asset at 95% occupancy and set it up such that the next owner would enjoy very little lease rollover in their first five years.”A five-year, fixed-rate non-recourse loan was used to finance the acquisition. “It’s a well positioned asset in a market beginning to see positive net absorption,” says Minor. “If the market doesn’t support a sale in the fifth year, the co-owners will have the ability to refinance and continue holding the asset.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.