Thursday, August 12, 1999

INDUSTRY NOTES: REAL ESTATE


Commercial real estate: good, bad

BY JOHN J. BYCZKOWSKI
The Cincinnati Enquirer

        Almost all midyear reports are in from the local commercial real estate watchers. Many take the good news/good news approach.

        If space is being leased quickly, and vacancies are falling, the market is “healthy.”

        If vacancies are rising, and rents are falling — well, that's good for tenants.

        Right now, Greater Cincinnati is both of those things. New American Eagle International (AEI), a unit of Western-Southern, says there's been 1.1 million square feet of office space added to the market in the past year, bringing the total to 28.6 million.

        Absorption rose 167,000 square feet in the first half of this year, but vacancies are up because of the new space, AEI said.

        Their outlook: Construction will moderate as developers watch how the new space is absorbed, and rents will stabilize.

        Colliers International says that in downtown, tenants vacated 179,801 square feet more than they leased in Class A space, sending the vacancy rate to 4.1 percent, from 1.7 percent at the end of 1998. The suburbs are mixed, with some new buildings doing well while others struggle to find tenants.

        The tenor of these reports is that the region is in a holding pattern of sorts.

        There's plenty of space available, and further development won't happen until the tenants come forward to lease it.

Another building for business center
        The Brooklyn Business Center isn't in Brooklyn, but Milford, at Ohio 28 and Brooklyn Avenue. Whalen Inc. is building a third building in the center, a $1.5 million project with 36,000 square feet, and it should be complete by September.

        “It's mostly a service center, as opposed to office-warehouse,” said Stewart Devitt, vice president. Tenants include call centers and showrooms.

        The project includes four buildings of about 8,900 square feet each.

ProLogis acquires 25 acres in Hebron
        Attesting to Northern Kentucky's growth as a distribution center, Pro- Logis has acquired 25 acres at Airpark International Distribution Center in Hebron to develop its fifth building in that area. This one will be 396,000 square feet and is speculative space.

        Since 1995, ProLogis has built four distribution centers totaling 776,507 square feet of space, and the new building will put it over 1 million square feet. It recently signed leases with Continental PET Technologies and Anex Warehouse and Distribution. It's expanding one building, and UPS Worldwide Logistics just took more space in another, to help service Adidas with worldwide distribution.

        Jim White, ProLogis' vice president and market officer for Cincinnati and Louisville, said there is now more than 12 million square feet of distribution space near the airport, an amount that has more than tripled in a few years. Most of it has been speculative.

        “The beauty of it is 95 percent of it has been absorbed,” he said. “With us, Duke and IDI, we've built a lot of space that's been filled by major global companies. The same thing's happening in northern Cincinnati.”

Two deals closed in Hamilton area
        Henkle Schueler & Associates has closed two deals to make Hamilton more fun.

        Texas Roadhouse Restaurant has bought 2.3 acres at 1366 Main St., for $500,000, to build its third Greater Cincinnati restaurant. It is expected to open in November.

        And a former Bill Knapp's Restaurant at 1350 Main St. was sold for $635,000, to be converted to a party store. That conversion will take place before the end of the year.

        Christopher Canarie handled both deals for Henkle Schueler.

       



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Local radio limits ad time
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