A slowing economy and a souring taste for downtown office buildings have left few buyers for Cincinnati's downtown office towers.

        Local brokers have had little luck convincing pension funds and large institutional investors to take a serious look at four Class A buildings for sale in downtown Cincinnati.

Want to buy a building? The PNC Center at 201 East Fifth St. is for sale. (Ernest Coleman photo) | ZOOM |

        Cincinnati's “for sale” buildings — PNC Center, 525 Vine St. and Chemed Center — have been available for months. A fourth tower, Commerce Center, was recently taken off the market after anchor tenant Convergys announced it was considering a move.

        A major office tower hasn't sold downtown since 1999 when the Chiquita Center and two Centennial buildings on Central Avenue changed hands.

        “Two years ago, large investors were looking for projects like this,” said Fred Macke, an office specialist with Grubb & Ellis, West Shell Commercial. “Since Sept. 11 and since the entire real estate industry has been kind of on its ear for the last eight months, a lot of people are taking a wait-and-see approach.”

        Immediately after hijacked commercial airliners crashed into the twin towers of World Trade Center, real estate experts speculated that high-rise buildings would have difficulty attracting and keeping tenants.

        That talk has subsided, especially in Cincinnati and other second-tier cities with no visible landmark such as Chicago's Sears Tower.

        “There was a lot of overreaction initially,” said Tom Powers, an office specialist with CB Richard Ellis. “I don't think Cincinnati is going to be on any terrorists' top 50 lists.”

        April's riots pose a more real concern for Cincinnati's investment market.

        Mr. Powers said he had trouble convincing potential investors to even consider downtown Cincinnati in the months after the riots. News footage broadcast nationwide showed a city teeming with racial tension and violence.

        “They are thinking it was like the L.A. riots,” Mr. Powers said. “Why would they want to dump $50 million in Cincinnati? They say, "This isn't some place we want to invest a lot of dollars right now.'”

        NAI Eagle's Steve Timmel, the listing agent for 525 Vine St., dismissed the impact of Sept. 11 and the April riots as “popular talk.”

        The main obstacle to attracting more investors is the recession, he said.

        “The market is very cautious at this point, as it should be,” Mr. Timmel said.

        He declined to reveal the asking price for the 525 Vine St. tower, a 394,000-square-foot building that the Hamilton County Auditor's Office values at $80 million. The building, owned by Prudential Insurance, has an occupancy rate of 68 percent, according to CoStar Group.

        Mr. Powers said a confidentiality agreement prevents him from disclosing the asking price for PNC Center. He is negotiating with a potential buyer for the tower, owned by a Dutch investment group whose U.S. holdings are managed by Hartford, Conn.- based UBS Realty Advisors.

        Even though downtown Class A office space has a relatively low vacancy rate of about 4 percent, lease rates are stagnant and demand for new space is weak. An abundance of sublease space could keep lease rates from increasing.

        Investors have been willing to pony up for Cincinnati's less-expensive Class B and C office space. Two Class B buildings and eight Class C buildings are listed for sale, according to CoStar.

        A Chicago firm last week purchased the former Enquirer building at 617 Vine St. for $1.25 million from Principal Life Insurance, said Jim O'Connell, of the CB Richard Ellis team, O'Connell, Bender & Powers.

        The new owner plans to improve the 225,000-square-foot building's heating, cooling and electrical systems and renovate six floors.

        To generate more investor interest downtown, Cincinnati needs to take steps to become a “24-hour city” with a bustling mix of residential, retail and tourism, Mr. Macke said.

        That includes creating more parking downtown, especially as construction of Great American Ball Park wipes out existing riverfront parking.

        “We need to get a more well-rounded city,” Mr. Macke said. “The viability of office buildings in cities that aren't 24-hour cities is literally suspect.”
       

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