Sunday, July 14, 2002

Industry Notes: Commercial Development

Companies not moving downtown

By Ken Alltucker
The Cincinnati Enquirer

        Cresa Partners' midyear scorecard compares Greater Cincinnati's office market to a sputtering submarine scraping the ocean floor. It hasn't crashed yet, but it's pretty close to bottom.

        “If there is a silver lining, I think it has leveled out,” said Alan Piker, managing partner of Cresa Partners.

        Mr. Piker's second-quarter report shows that suburban and downtown vacancy rates dropped slightly, but rental rates also decreased, an indication of tepid demand for new office space.

        Indeed, there were few large deals involving companies moving into new space.

        The largest office deal of the second quarter was downtown. Great American Insurance opted to renew its 250,000-square-foot space at 580 Walnut St.

        Losing such a large tenant would have been a major blow for a struggling downtown office mar ket, which has a 14 percent vacancy rate when sublease space is factored, according to Cresa.

        A rare relocation from the suburbs also benefited downtown when BHDP Architecture moved from Fairfax to 25,000 square feet at the renovated Third and Plum building. But major questions loom over downtown, including whether Convergys Corp. will consolidate more than 2,000 employees at a proposed new office building at the Banks or move to the suburbs.

        Demand for office space in the suburbs remained soft. Cresa said vacancy rates for suburban Class A space is 25.7 percent at the end of June, down slightly from 26.3 percent at the end of March.

        Lower rates could scare developers planning speculative office buildings, according to Cresa.

Franklin Co. outcome could void contracts

        Contractors looking to score major contracts as part of the $1 billion school rebuilding plan may have to rethink their strategy if it involves schmoozing on the golf course with Ohio's top school construction official.

        That's because Ohio School Facilities Commission director Randall A. Fischer resigned July 5 following a controversy in how he awarded contracts.

        A Franklin County court case revealed Mr. Fischer awarded contracts without approval of a three-member commission as well as unbid contracts to companies that paid for his golf rounds.

        Gov. Bob Taft is searching for a replacement for the commission, which awards $2 million in school construction contracts daily.

        The court case was brought by Monarch Construction Co., which was passed over for a contract despite being the low bidder. A Franklin County judge ruled in Monarch's favor, calling the bidding process a “sham.”

        The ruling has could void all contracts approved by the facilities commission, said Dan Wireman, a Schottenstein, Zox & Dunn lawyer who represented Monarch.
Shopping center sold; new owners plan update

        Mendo's Inc. recently purchased the Northpointe shopping center in Forest Park for $2.3 million.

        L.J. Shapiro Trustee sold the 100,000-square-foot center.

        The new owner plans to upgrade the 25-year-old shopping center, anchored by Napa Auto Parts and Family Dollar.


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