By awarding an exclusive leasing agreement to the Cushman & Wakefield CRESCO brokerage for Post Office Plaza that includes its potential sale, Forest City Realty Trust Inc. (NYSE: FCEA,FCEB) has signaled the availability of one of the largest office vacancies in downtown Cleveland.
According to online realty data service CoStar, the 435,000-square-foot building at Tower City Center has 267,000 square feet of office space available, the largest volume of market-ready office space downtown.
The other properties with more available space are part of substantial redevelopment projects, such as the $250 million conversion of the 1.6 million-square-foot Union Trust Co. building to a hotel, offices and apartment, and 339,000 square feet at Tower at Erieview, where the building owner has signaled interest in converting part of the building at 1300 E. Ninth St. to apartments. Union Trust, 925 Euclid Ave., would have about 400,000 square feet of renovated office space after the planned conversion of parts of the landmark to other uses.
Post Office Plaza is a landmark in its own right, dating from 1925 and converted to office by Forest City in 1990 as part of its redevelopment of the Terminal Tower complex as Tower City Center. The property has lost several tenants to downsizing and relocation over time, most recently the move of the Cleveland office of Quicken Loans to the nearby Higbee Building, which is owned in a partnership by Quicken founder and Cavaliers owner Dan Gilbert.
Bill Saltzman, a CRESCO executive vice president and head of the Independence-based brokerage’s office unit, said it will be a “full court press” to market the Post Office Plaza space, especially with the brokerage’s local, regional and national contacts.
“With its large floor plates, sky-lit atrium lobby and connectivity to Public Square, Tower City, and public transportation, Post Office Plaza represents a unique opportunity to accommodate the space requirements of a number of large office tenants, including a corporate headquarters,” Saltzman said.
Although CRESCO did not mention it in an Oct. 7 news release, CRESCO also has a listing to sell the property at 1500 W. Third St. with an undisclosed asking price, according to the property’s CoStar summary.
Saltzman said the sale listing signals the property would be available for purchase if a large user wants to buy it as well as occupy it, or to team up with a different real estate developer who would buy it and lease it to a large user.
However, Post Office Plaza being on the market is no surprise. Forest City has sold the other pieces of Tower City over the past few years, including the iconic Terminal Tower and The Avenue retail center last summer.
Despite being based in Cleveland, the real estate investment trust has been shedding most of its Northeast Ohio properties as part of a plan to focus its investments on large cities with more dynamic realty markets, such as New York City and San Francisco.
Rico Pietro, a CRESCO principal who is also working the Post Office Plaza assignment, said, “There are number of elephantine-sized tenants in the market, but this is also a time to give Post Office Plaza a new look given all that is going on around it, such as the renovation of Public Square.” Pietro also represented Forest City and K&D on the Terminal Tower deal.
Previously, CBRE Group handled leasing on Post Office Plaza.
David Browning, managing director of CBRE’s Cleveland office, declined comment.
Jeff Linton, Forest City spokesman, did not respond to an email asking about the change in brokers by 2:20 p.m. on Thursday, Oct. 13. However, the company typically does not comment on individual buildings and assignments in Cleveland.