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Downtown Cincinnati is Taking Off

CINCINNATI—The former URS Tower went through foreclosure and a sheriff's sale, but Neyer Properties aims to modernize it and give it new life.

By Brian J. Rogal | brianjrogal | | Updated on September 01, 2016

 

cin-URSOfficeTower-1 (2) The offices sit atop a separately owned 14-level parking garage and two levels of commercial space.
CINCINNATI— Neyer Properties has just purchased the 12-story office portion of a building located at the corner of Seventh and Walnut, formerly known as the URS Tower, in downtown Cincinnati. The offices sit atop a separately owned 14-level parking garage and two levels of commercial space. The building was sold by LNR Partners through auction site Ten-X for $8 million. LNR bought it at a sheriff’s sale in 2014 for $7 million after filing a foreclosure suit against former owner Artek Realty .        Before the recession, URS had occupied a big portion of its namesake tower, but when the market crashed, it left and other tenants shrunk and consolidated their spaces, Keith Yearout , vice president, CBRE’s investment properties group in Cincinnati, tells GlobeSt.com. Yearout and CBRE’s Jim Vondran represented the seller in this latest transaction.    “It left a big hole in the building, and occupancy dropped to about 35%,” he says. Furthermore, the previous owner was highly-leveraged, and it did not make economic sense to spend the money required to update the building or do what was necessary to lease it up. “This building has been off everyone’s radar screens. Brokers did not consider it for their clients because it has been in limbo.” However, the tower has a lot to offer, and the transformation of downtown Cincinnati has made the location more appealing than ever. “This is one of only a handful of buildings that can offer big blocks of space with unobstructed, 360 degree views and access to abundant parking,” says Yearout. And even though its Seventh and Walnut location on the edge of the city’s Over-the-Rhine neighborhood was also considered the fringe of the CBD, today “it’s smack dab in the middle of everything.” The area’s many historic buildings now brim with new apartments, condos, ground-level retail and even office spaces occupied by a collection of start-ups and creative users. “Over-the-Rhine has really taken off.”           As part of their acquisition strategy, Neyer plans to rebrand the building as a class A structure and spend millions renovating both its interior and exterior. The exterior renovation will include a façade upgrade and new entrance to match the high-end properties adjacent to the building.   Interior improvements will include upgrading the common areas, first-floor lobby, elevator lobbies, and restrooms. Neyer will also revamp the building’s 15th floor sky lobby with outdoor terrace. The property will also have more interactive and modern space, with open floor plates, collaborative areas, and open ceilings.   “Our plans include the addition of a one-of-a-kind conference center off the sky lobby that will provide tenants with the option to open the doors up to the outdoor terrace, creating an indoor/outdoor collaborative space where meetings or social events can be held,” says Jared Wendling , Neyer’s director of acquisitions and dispositions. “We believe in the vibrancy and investment taking place downtown and throughout the city,” says Dan Neyer , president and chief executive officer of Neyer Properties. “We have put money where our mouth is by acquiring over 1.1 million square feet of space in the City of Cincinnati since 2012 and are also adding significant investments into The Baldwin and Keystone Parke development.”   Neyer Properties has acquired over 2.7 million square feet in the last four years. In addition to Cincinnati, the company is especially active in Midwest metro areas such as Columbus, Indianapolis, Louisville and Lexington, KY. As reported in GlobeSt.com, in 2014 the company purchased Two & Three Woodfield Crossing, a 386,000-square-foot, class A suburban office complex in Indianapolis’ Keystone submarket, for $26 million from the special servicers C-III Realty Services .    Michelle Klingenberg , Josh Gerth and Rusty Myers with JLL are partnering with Neyer to bring new users to the former URS building. Yearout says the URS offering attracted many potential buyers, including regional players, and even national investors from New York. But “Neyer was the most aggressive because they are local and truly understand what’s going on downtown and in Over-the Rhine.”

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