CLEVELAND—The Cleveland retail market experienced slight decreases in both availability and vacancy in the second half of 2017, settling at 13.2%, and 12.7%, respectively, according to new research by CBRE. Local landlords and developers have gotten creative by replacing former mall sites with last-mile e-commerce distribution facilities, and renovating empty big-box mall anchors into automotive showrooms or self-storage facilities. “Investors from across the country are investing in Northeast OH, many of them for the first time, chasing yield and deferring capital gains,” says Keith Hamulak, vice president at CBRE. “I anticipate capital market activity will continue to be robust, while leasing activity will decline slightly.” Other highlights from the report include DDR's sale of power centers Belden Park Crossing and Macedonia Commons, both in the metro area, for $67 million and $45 million, respectively.

NEWS & NOTABLES

CHICAGO—Bentall Kennedy, a private equity real estate manager with $37 billion of institutional assets under management, has added Eileen Kirkwood and Steve Hamilton to its client relations team. Kirkwood was hired as the firm's Chicago-based vice president to manage consultant relations and client service. She previously worked for Brookfield Asset Management's public securities group where she initially managed the client service team and then led consultant relations. Hamilton joins the firm as a Bethesda, MD-based vice president from Emerald Advisers where he was a portfolio specialist managing Emerald's institutional marketing and client service efforts. In his new role, Steve will represent Bentall Kennedy's US funds to the institutional marketplace, with a primary focus on Taft-Hartley and public pension plans.

CHICAGO—The historic Inland Steel Building has long been one of Chicago's most elegant office buildings, and it's now also one of the more efficient. MB Real Estate says the property, located at 30 W. Monroe and owned by Capital Properties, has received LEED Gold certification. The US Green Building Council awards this certification for buildings with exceptional energy and resource efficiency. The building excelled in a number of the program's categories, including sustainable sites, water efficiency, energy and atmosphere, indoor environmental quality, materials and resources, and innovation and operations. The Inland Steel Building was the first commercial high-rise built in Chicago's Loop after the Great Depression, and “maintaining the attributes of the property that make it so historically and architecturally significant, as well as not disrupting tenants' spaces, were our biggest obstacles when integrating energy-efficient technologies,” says MBRE's Cate McCormack, vice president and general manager of Inland Steel.

DEALTRACKER

CLEVELAND—KeyBank Real Estate Capital has provided $161.5 million in Fannie Mae DUS and Balance Sheet financing to Calamar Enterprises Inc., to refinance a thirteen-asset, age-restricted housing portfolio. $113.25 million of debt was provided through Fannie Mae and structured as two cross-collateralized pools with seven- and twelve-year terms. $48.25 million was provided through the KeyBank Balance Sheet. The properties total approximately 1,500 units and are located in NY, NH, MO and NE. “Through its integrated platform, KeyBank was able to provide Calamar with the financing solution it needed to consummate the transaction where the assets were in various stages of lease-up,” says Dirk Falardeau of KeyBank. Six of the properties were in the process of lease-up, three of which were financed through Fannie Mae's Near-Stabilization program with the other three being placed on Key's balance sheet until they meet the agency's refinance parameters.

CHICAGO—Joe Markech, managing director in Pillar Financial's Chicago office, originated $14.1 million with Fannie Mae to refinance a construction loan for Urban Station, a dedicated student housing property in downtown Bloomington, IN. The four-story property features 53 apartments each leased by the unit and retail space on the ground floor. Urban Station is located within walking distance of the University of Indiana and opened in August 2017. Pillar, a division of SunTrust Bank, originated a fixed rate, 12-year term loan with a 30-year amortization schedule to refinance the property for a Bloomington-based borrower that develops and manages student housing and multifamily properties in IN. Pillar sourced the transaction through Mike Dury of PR Mortgage & Investments, a Pillar correspondent. The transaction closed January 2018. “This transaction allowed our borrower to achieve substantial cash out to pursue other CRE acquisition activities,” says Markech. “Pillar has closed a number of student housing transactions and continues to see strong demand for this sector.”

BUILDING BLOCKS

CHICAGO—Locally based Northern Builders, Inc. has broken ground on phase one of a two-phase development at Cherry Hill Business Park in New Lenox and Joliet, IL. The Cushman & Wakefield team of Jason West, executive managing director; Sean Henrick, executive director; Doug Pilcher, director; and Mike Magliano, associate director, are marketing the 171,394-square-foot industrial property on behalf of the Northern Builders, who plan to deliver the 32” clear building in June. Located at 2401 W. Haven Ave. in Will County, the property fronts I-80 and offers immediate access to I-355 as well as proximity to I-55 and I-57. The building has availabilities from 50,000 to 171,394 square feet. “This development will cater to tenants in the 50,000 to 170,000 square foot range,” Henrick says. “Recently, there hasn't been any new development along I-80 in the under 200,000 square foot range, though there have been several big box buildings constructed. And more are on the way since the average deal size is over 200,000 square feet.”