DAYTON, OH-Bank of America has sold the city’s best-known office building, Kettering Tower, to a joint venture led by Plainview, NY-based Dunkirk Realty for less than $10.8 million. The 486,121-square-foot building, acquired by the bank in a foreclosure, is only 50% leased.
Eli Macanian, son of Dunkirk owner Albert Macanian and a VP at the firm, tells GlobeSt.com that he saw opportunity in the purchase of the 30-story tower, the tallest in the city. “It wasn’t listed at the time, but I saw it in an aerial photo and had heard about it being available, and I thought it was a great building,” Eli says. The building will be owned by Tower Partners LLC.
New York City-based investor Uri Mermelstein paid about $21.4 million for the building in early 2005. The property at Second and Main streets was 83% occupied. However, it’s reported that Mermelstein recently owed more than $44 million on a loan for the property. Bank of America tried to auction the building in April, but the minimum bid of $10.8 million wasn’t reached. Eli says his firm paid less than the bid price.
He says occupancy at the tower has already dropped from 63% to 50% in the past month, as tenant Chase Bank has downsized its space. Other tenants at the 42-year-old tower include the Dayton Racquet Club, the Dayton Development Coalition and Ernst & Young. Eli says his firm is hiring CBRE to find new tenants.
Dunkirk, which owns more than 10 million square feet in the United States and Europe, made its first investment into the city with the tower purchase, but it won’t be the last, Eli says. Albert is today in negotiations for another Dayton office, and there are a few others in consideration, Eli says. “We like Ohio, the location is central to businesses and prices are just really low right now,” he says. According to a Cassidy Turley first quarter 2012 report, Dayton’s office vacancy is at about 28%, where it’s been since 2010.
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