CINCINNATI—A joint venture partnership that includes Rubenstein Partners, SCP Elm Plum, LLC and Parkway Corp. has just bought two office buildings in the heart of the CBD with a total of about 610,000-square-feet from the partnership of Nashville-based Smith/Hallemann Partners and Birmingham, AL-based Harbert Management Corp. The purchase price was not disclosed.
Smith/Hallemann and Harbert bought the properties, located at 312 Elm St. and 312 Plum St., from Duke Realty Corp. in 2011 as part of a nearly 1-million-square-foot portfolio of buildings in Nashville and Cincinnati. Major tenants in the Cincinnati buildings include KAO USA, The Cincinnati Enquirer, and several federal government agencies.
As the US office economy heats up, properties in secondary markets like Cincinnati and Nashville should become more desirable for investors, John Sikaitis, JLL's managing director for local markets and office research, told GlobeSt.com. “Demand has definitely increased at a more frenzied pace.” In the last six months, the US saw more than 30-million-square-feet of net absorption. And that activity has spread beyond the gateway markets.
“A year ago, we were seeing the tech-heavy areas and energy-dependent cities like Houston generating most of the absorption,” he added. But “the overall geographic diversity has greatly improved, with many other markets making contributions.” Along with Cincinnati, Cleveland, Columbus, Indianapolis and even Detroit have all taken part in the recovery.
The new owners of the Cincinnati properties say they plan to renovate the two buildings and focus on the lobbies, streetscapes, and other common area space. Rubenstein, a Philadelphia-based real estate investment manager, specializes in picking up value-added office properties in the Eastern US.
“This disposition completes our strategy for this particular investment, that of purchasing core assets that have a significant value-add opportunity via improved leasing performance and property management and then realizing that performance via sale,” said Tom Smith, chairman of Smith/Hallemann Partners.
“These properties represent everything we typically look for in an investment and align perfectly with our overall acquisition strategy,” said Brandon Huffman, regional director for the Midwest for Rubenstein. “Downtown Cincinnati is in the midst of a significant revitalization spurred by several large corporate relocations and an accelerating residential boom, particularly in the immediate vicinity of 312 Elm St. and 312 Plum St. The buildings are competitively advantaged in terms of their central location and extensive parking and are well-positioned to capitalize on the market's continued momentum.”
The Cincinnati office of DTZ was the broker for the transaction.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
