Al Neyer Inc. thought it struck a winning formula by converting the Third and Plum building downtown into an office exclusively for telecommunications companies.

        The theory was big markets like New York and Chicago were sophisticated enough to recognize the need for these types of buildings, but mid-sized cities like Cincinnati had yet to catch on. And the theory was valid, for awhile.

        The Blue Ash-based developer quickly signed leases with a handful of tenants for the converted David Shoe building, built atop a maze of downtown fiber-optic lines. Al Neyer was even looking at similar-sized markets like Lou isville and Dayton to expand its reach.

        Then the market crashed.

        The Nasdaq plunge in 2000 left fledgling telecommunications companies struggling to stay afloat while more established firms had difficulty raising capital.

        For Al Neyer Inc., that has meant a lot of available space at Third and Plum.

        Nextlink, Switch & Data and Time Warner have leased space at the building. Colo.com agreed to take one floor but later filed Chapter 11 bankruptcy, so Al Neyer is uncertain if the firm will need the space, said Jeff Carey, the building's leasing agent.

        The telco industry slowdown has prompted the developer to change strategies and court all types of office users, not just telcos. The three new floors built atop the 1903 building are available for all types of users.

        “The telecom crash was unpredictable and certainly unpleasant,” said John Neyer, marketing director. “From the beginning of the project, we knew it was a fledgling and developing industry. For that, you are going to have some high risks.”

        With the three added floors, the former David Shoe building has eight floors and 180,000 square feet of office.

        Senior vice president Jim Neyer said the new strategy is actually a return to the developer's original plan. The firm decided to court firms that depend on high-speed communications only after discovering the potential for high-speed communications.

        “We've come full circle with the Third and Plum building,” Jim Neyer said. “Opening the building up for corporate users is a way to avoid putting all our eggs in one basket.”
       

Corporex planning hotel in Denver

               Corporex Cos. is expanding its reach in the Rocky Mountains with plans to build a $24 million, 174-room Embassy Suites hotel near Denver International Airport.

        It will be the first hotel in Denver for the Covington-based developer, a market chairman Bill Butler covets in part because of the airport.

        The Denver hotel will include a seven-story atrium, restaurant fitness center, an indoor pool and meeting space.
       

Cincinnati expensive place for warehouses

               Cincinnati ranks among the most expensive places to own and operate a warehouse, according to survey results released last week by National Association of Indus trial and Office Properties (NAIOP).

        Of 23 markets surveyed, Cincinnati ranks No. 6 in total expenses and No. 19 in operating income per square foot.

        The Midwest overall checked in with higher costs and lower income potential than Western markets, the survey said.

        The top income producer is Phoenix. Columbus properties yield the fewest dollars in income. The survey said Seattle was the most expensive market in which to operate a warehouse, and Minneapolis is the least expensive. .
       

        Ken Alltucker covers commercial real estate for the Enquirer. Have news? Call him at (513) 768-8384, e-mail kalltucker@yahoo.com or fax 768-8340.
       

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