AKRON, OH—A recovery has taken hold in many suburban office markets, and investors have started to see properties there as a solid risk. For example, Rubenstein Partners, LP and its partner, an affiliate of Mark Munsell, just closed the sale of a seven-building office portfolio in Fairlawn, OH, a leading suburban submarket in the Akron metropolitan area, for $30 million to Embassy Park Akron LP, an affiliate of New York based Group RMC. 

When Rubenstein acquired the overall portfolio of ten buildings in 2012, it had an occupancy rate of about 68%, and today the seven buildings sold are at 80% occupied.

"By undertaking a fairly complex negotiation at the outset, we were able to clean up the capital stack and remove obstacles to the performance of these buildings," says Brandon Huffman, director at Rubenstein. "We then pursued our value-added business plan to improve and lease up the assets, leading to this successful disposition."

Known collectively as the Embassy Parkway Portfolio and built by John Dellagnese & Associates, the seven properties total 400,000 square feet of class A space.

Russell Rogers and Thomas Gustafson, both senior vice presidents and principals at Colliers International, brokered the sale.

"The value achieved through this transaction exemplifies the upward trend of suburban office market leasing activity and declining vacancy rates in northeastern Ohio, where market fundamentals are at their strongest since the recession in 2007," says Rogers.

Colliers introduced the portfolio to Rubenstein several years ago. That acquisition was completed by privately negotiating a discounted payoff of existing CMBS loans in conjunction with the previous borrower and a special servicer. Two of the buildings in the portfolio were subsequently sold to their respective users in 2012 and 2013 for a total of $4.2 million. Rubenstein also brought fresh capital to the remaining eight buildings to support leasing and complete significant capital improvements. The main tenant of the final portfolio building has agreed to buy it in a deal expected to close later this month.

"The sale of these office properties represents a changing of the guard in terms of who will continue delivering a quality product to class A office tenants in the Fairlawn and Canton markets," Rogers adds. "Our local market is fortunate to attract investment from a private equity group like Rubenstein Partners, whose sole focus is to purchase and improve class A office properties, maintaining and upgrading the assets to leave them in better condition than originally purchased."