Monday, June 24, 2013

Development roundup in Cleveland - June, 2013

The Cleveland real estate market, long stalled by a combination of poor economic prospects and a poor national reputation, appears to be finally making some strides in a positive direction. Grit and determination have pushed developers to make investments in a city completely devoid of hype.

Here is a roundup of the recent major developments in the city as well as some other proposed developments in the place that once labeled itself as "The Comeback City."

- Flats East Bank Project ($500 million)

The east bank of the Flats, bordering the Cuyahoga River and Lake Erie, was once nationally known as an entertainment hotspot of the Midwest, where riverfront bars and clubs served up thousands of beers every weekend. The days of spilled beer and late night boat parties are long gone, and a $500 million project twenty-five years in the making has finally yielded an 18-story, 450,000 square foot riverfront office tower together with three restaurants, a 150-room Aloft hotel, and a 1200-foot boardwalk, all opening this week. Big Four accounting firm Ernst & Young has relocated their de facto headquarters to the tower, which marks the first major office development in more than twenty years in the central business district.

The overwhelming leasing success of this development has emboldened its developer to fully launch Phase II of the Flats East Bank project, which adds 140 apartments and more retail space, creating a mixed-use, transit-oriented lakefront community from scratch in the heart of downtown.

Read more here:

- Global Center for Health Innovation and Convention Center ($465 million)

City leaders in 2004 proposed a development to capitalize upon the presence of the Cleveland Clinic and the hundreds of spinoff biotech and healthcare companies within the metro area. The project eventually morphed into a replacement of the city's antiquated downtown convention center with an absolutely unique 225,000 square foot underground convention center built on a slope fronting the lake with floor-to-ceiling windows and a grass ground-level park on the rooftop of the building. The development maintains the wide open space that was central to the original Group Plan designed by architect Daniel Burnham, famous for implementing urban plans like the Chicago Plan, the Civic Center of San Francisco, and completing the design of the National Mall of Washington, D.C.

This new project, finished ahead of schedule and under budget, had its ribbon cutting this month and is scheduled to hold conventions this year. The Global Center for Health Innovation has signed several permanent tenants to showcase new medical devices and processes to the healthcare industry, creating further reason for the healthcare industry to hold exhibitions in this complex.

Read more here:

- Downtown apartment market (completed and in process)

Cleveland's central business district is traditionally commuter-based, and no significant population has lived downtown for at least 75 years. Thanks to a growing hunger for urban living among young professionals, this tide is changing in a big way for Cleveland. Downtown population is soaring, up 100% over ten years and remains at near 100% occupancy with months-long waiting lists. Over 4,500 downtown rental units were occupied at the end of 2012, with 1,136 more scheduled to come online in the next 18 months. Downtown Cleveland has been a stand-in for New York City on several occasions in various movies, and offers an unusually urban environment for a city of its size. It is poised to capitalize on that strength to satisfy residential demand.

Read more here:

- Public Square and lakefront connection project (proposed - $360 million)

Thanks to a $90 million surplus resulting from the Convention Center coming in under budget, the city and county have partnered to redevelop the city's focal point, Public Square, into a world-class public space and link the central business district to the lakefront via a greenspace land bridge, after years of being severed from the water by a highway and a busy rail line. Part of the new proposal includes a $260 million, 600-room convention center hotel intended to serve the burgeoning demand for hotel space in the city center. Other funding allocations have been made to build a new public marina downtown and mixed-use development along the former Port of Cleveland space adjacent to the Cleveland Browns Stadium. The project will finally provide a long-awaited link between downtown and the lakefront, something that other successful coastal cities like Chicago and New York discovered years ago would spur development and increase desirability.

Read more here:

More to come as developments materialize. We have only scratched the surface of the activity around the Cleveland area.