June 14, 2018
Rico Pietro, principal with the Cleveland office of Cushman & Wakefield|CRESCO Real Estate, has been selling commercial properties in this Midwest city for more than 20 years. Today, he specializes in Cleveland's office market. And, as he says, this is the healthiest he's seen this sector here in two decades.
Pietro will share his thoughts on the office sector during the 4th annual Cleveland Commercial Real Estate Summit held by REJournals at Windows on the River in Cleveland on June 27. He’s one of several industry leaders speaking at the event, which has, throughout its history, attracted hundreds of commercial real estate professionals.
Midwest Real Estate News spoke to Pietro earlier this month about the strength of the office sector in Cleveland, the amenities that companies are seeking and the strong pull that downtown Cleveland is having on companies that were formerly happy doing business entirely from the suburbs. Here is some of what he had to say.
Midwest Real Estate News: I know this is a broad way to start this interview, but just how strong is the downtown Cleveland office market today?
Rico Pietro: It is incredibly healthy. It is as healthy as I’ve seen it in my 20 years in Cleveland. There is a new interest in downtown office space from the professional services sector. Recommitting to the CBD seems to be a common theme. We have always had tech companies, for instance, interested in downtown. But now there’s a new interest in downtown from accountants, lawyers and consultants. They are all trying to meet the desires of the Millennial employees who want to work in a CBD, to have the amenities that come with a more densely occupied area of commerce.
MREN: How long has this trend been going on?
Pietro: It has been a pattern for the last five years here. This has been happening in all the major metropolitan markets. Cleveland has lagged a bit behind in the professional services area. But now we are seeing lawyers and accountants looking to be more competitive when it comes to attracting the best talent. They have to offer a different kind of venue than they have in the past to compete against companies in Chicago and other major cities.
MREN: Will this demand lead to new office construction in downtown Cleveland?
Pietro: The Class-A office vacancy rate in downtown Cleveland is at record lows today. You do hear whispers from developers that there might be a new office tower coming to downtown. It will not be built on spec, though. It will require an anchor occupier. There are some institutions in Cleveland that are rumored to be looking for a downtown headquarters. It could be a government-led tower with a state, city or county agency in it. Or it could be one of the major businesses in town leading the charge for a new product coming to market.
MREN: Is it getting difficult for companies to find modern Class-A office space in downtown Cleveland?
Pietro: There is a lack of inventory of Class-A space available. But the bigger lack of space in my mind is the adaptive space, the restoration of historical properties into office space in well-located areas. More companies in the suburbs are interested in moving to downtown. But they are not just interested in downtown. They don’t just want the ivory towers that have always been considered. They want to locate in the historic beam-and-brick structures that were once other uses. They want to create authenticity for their space, to use it as a marketing tool to recruit the best and the brightest recent college graduates or employees from their competitors.
MREN: How important is this kind of office space to younger workers?
Pietro: There’s been a big shift in the office market, both suburban and urban. Companies are looking for more amenities beyond just the 2,000-square-foot workout area and the shared conference room. They want onsite fast-casual eating opportunities. They want wellness and fitness centers that workers can use as an alternative to a gym membership. They want lounge areas for brainstorming and creative thinking. They are looking for amenities like electric charging stations for vehicles and bike racks for those who don’t want to have a vehicle. It’s important, too, that offices have easy access to public transportation and that they be near cultural amenities like riverfronts, city parks and waterfronts. It is now about these amenities rather than what floor a building they are on.
MREN: These are some pretty major changes hitting the office sector.
Pietro: There are disrupters, just like what has happened in the retail world with Amazon. Disruptions are happening in the office world, too. Workers today may want to start work later in the day. They want to stay later in the office. There has been a seismic shift in the market. The development community is now listening to the employee, not just the c-suite leadership. It’s not just about bricks and mortar. It’s about creating a sense of place, a culture for a community. Companies need this approach if they want to recruit the most talented and educated workers. That’s an important goal for companies. When they have the best workers, they can increase their productivity significantly.
MREN: Have there been any big company moves to downtown Cleveland that show just how strong this trend is?
Pietro: Electronic Merchant Systems, a credit-card processing company, signed a lease in the 250 West Huron Building at Tower City Center. That is a sign that companies want to operate out of downtown. Companies want to bring the benefits of a better culture at work during the day to their employees. That is what is leading this charge.
May 11, 2018
CLEVELAND, May 11, 2018 – Cushman & Wakefield | CRESCO Real Estate is celebrating a handful of wins from the 2018 NAIOP Awards of Excellence. The NAIOP Awards of Excellence recognizes the best real estate transactions, projects and individuals throughout the previous year within the industry. Winners are chosen by clients, colleagues and fellow real estate brokers. Cleveland’s largest commercial real estate awards ceremony was held on Wednesday, May 9th 2018 at Windows on the River.
Nathan Kelly, Managing Director of Cushman & Wakefield | CRESCO Real Estate, attended the award ceremony for the first time. “It’s an honor to be recognized by NAIOP for excellence in real estate – and winning in three different categories. Reflecting on a year’s worth of the best projects in the region with your colleagues and competitors, it’s easy to be proud of our contributions to the region’s growth and development as a destination.”
With nominations in multiple categories, CRESCO was well represented at the NAIOP Awards:
• George Pofok, CCIM, SIOR won Industrial Development Project of the Year for FatHead’s Brewery, currently building in Middleburg Heights
• Rico Pietro, SIOR and Jim Krivanek won Office Transaction of the Year for Dealer Tire Headquarters in MidTown
• Rico Pietro, SIOR won his fourth consecutive Office Broker of the Year Award
February 5, 2018
CLEVELAND, February 5, 2018 – Dynamic real estate veteran Jason Laver, SIOR has joined Cushman & Wakefield | CRESCO Real Estate as Senior Vice President. Known for his deep experience and knowledge of Independence’s I-77 – 480 corridor, Laver brings twenty years’ experience to the fast-growing office team at CRESCO.
Laver joined Cushman & Wakefield | CRESCO after a 17 year affiliation with Independence-based Dalad Group, a premier developer of office, industrial and historic redevelopment throughout the Cleveland market. Laver led client successes for every kind of real estate transaction, including landlord and tenant representations, land sales and purchases, lease buyouts, built to suits and sale leasebacks. His portfolio of assignments included award winning engagements with national and local users, receiving awards from NAIOP for New Office Building Development, Office Building Redevelopment, Multi Family Redevelopment and Office Lease Transaction of the Year.
“I’ve worked across the table from Jason for years. His tenacity and energy is contagious,” said, Nathan Kelly, the Cushman & Wakefield | CRESCO managing director. “It wasn’t easy, but we were able to get him on our team.”
In addition to Laver’s work on behalf of real estate developers, owners and tenants, Laver leads an economic development consulting practice that represents municipalities. He’s a business retention and expansion expert, assisting communities and businesses in their growth efforts.
Laver said, “I’ve built a practice to serve a diverse group of clients throughout the region. A firm with the global reach and in-house capabilities of Cushman & Wakefield | CRESCO is the natural step to grow that business and serve clients on the next level.”
December 15, 2017
CLEVELAND, December 15, 2017 – Cushman & Wakefield | CRESCO Real Estate welcomes Nathan Kelly as the firm’s first Managing Director. He will be responsible for CRESCO’s overall leadership, direction in the market and ensuring the highest quality of client service.
The decision to hire Nathan as CRESCO’s first Managing Director comes after a lengthy search. “We have enjoyed 26 years of consistent growth.” Says founding Principal Joseph Barna, “However, my partners and I realize we have outgrown the ‘player coach’ model of running a business. As a result of an extensive strategic search, we are confident that Nathan Kelly possesses all the skill sets to lead our organization to that next level.”
CRESCO is no stranger to growing. Over the past year and a half, they’ve added six members to their team between Sales Associates and Support Staff.
Kelly joins Cushman & Wakefield | CRESCO, after senior public-sector positions in economic development, municipal planning and performance improvement. A respected and connected community leader, he established a reputation as an effective and resourceful strategist and consensus builder.
Nathan is an economic development expert; he led more than $1B in public-private transactions and countless business retention, expansion and attraction deals. He was a critical player in downtown redevelopment projects that included historic renovations of once-empty office buildings and the redevelopment of the Playhouse Square District. Kelly also led Cuyahoga County’s role in the 2016 RNC Convention in Cleveland.
Nathan currently serves on the boards of many Cleveland organizations, including Destination Cleveland, the HELP Foundation, the Cleveland Sight Center, the Greater Cleveland Chinese Chamber of Commerce and the advisory board to the Urban Land Institute in Cleveland. He’s previously been recognized in Crain’s “150 Names to Know in Northeast Ohio” and “Forty Under Forty.”
October 12, 2017
Cushman & Wakefield | CRESCO Real Estate is proud to announce the representation of Vedas Fitness, the newest tenant at Key Center, located at 100 E. St. Clair in downtown Cleveland, Ohio. Vedas Fitness will be using 20,000 SF of the third floor for their Fitness, Ayurvedic Spa and Corporate Wellness Facility, slated to open in winter of 2017. Vedas currently has one location in Cleveland, located inside the IMG Building.
The Vedas Fitness facility will include a group fitness and yoga studio, 4,000 SF strength and cardio equipment areas, luxurious locker rooms and a full service Ayurvidic spa. Vedas was founded by Tammy Polenz, certified trainer, club manager, corporate wellness consultant and the author of Think Fit 2 Be Fit. Ricky Buoncore, certified personal trainer, group class instructor, fitness director, and athletic coach, will join Tammy in managing Vedas.
Eric Schreibman represented Vedas and is excited to see them flourish in their new space, “I am thrilled for Tammy and the Vedas team. They’ve worked for many years building and improving their fitness and wellness concepts, and now they have an opportunity to put those concepts into action in a truly special, state-of-the-art facility. Being part of the renaissance of Key Tower is also meaningful, and I’m grateful that the building ownership saw the wisdom in selecting Vedas for this important component of the overall plan at Key.”
Tammy is just as excited to bring Vedas to the Key Center, “We are thrilled to broaden our reach in downtown Cleveland by bringing our holistic approach to Key Center. Vedas is so much more than just a fitness facility, and the new space will enable us to expand on our mission to help people attain their optimal well-being.”
To learn more about Vedas, visit their website at https://www.vedasfitness.com or call 216-298-5115.
September 22, 2017
CLEVELAND, September 22, 2017 – Cushman & Wakefield | CRESCO Real Estate welcomes Shawn Fortner, Sales Associate to our retail and office team. She brings seven years of experience in commercial real estate. Prior to joining CRESCO Real Estate, Shawn gained experience at Glimcher, DDR and E.V. Bishoff.
Shawn shares her excitement in joining CRESCO Real Estate, “I am excited to be joining a team of such knowledgeable experts in the industry. They have become the market-leaders in the office and industrial divisions and I look forward to contributing to the growth of their retail division by offering a unique perspective from my extensive retail background. I am truly honored to be welcomed to CRESCO.”
Shawn is involved in the Young Commercial Real Estate Professionals group and graduated from The Ohio State University with a BSBA in Real Estate and Urban Analysis.
Welcome Shawn to the Cushman & Wakefield | CRESCO Real Estate team.
August 10, 2017
CLEVELAND, August 10, 2017 – Cushman & Wakefield | CRESCO Real Estate is pleased to announce the representation of Mold Masters in their sublease located in Eastlake, Ohio. Principal, Joseph Barna, SIOR and Senior Vice President, Eliot Kijewski, SIOR represented Mold Masters in conjunction with Liberty Development Company.
Mold Masters signed a 13 year sublease agreement for 77,767 SF at 34000 Vokes Drive in Eastlake, just 18 miles from downtown Cleveland. The industrial space was built in 1981 and renovated in 1988. It is currently owned by Broadstone Net Lease Inc., a Rochester, NY based REIT who purchased the building in 2012.
Mold Masters designs and builds tools and wax patterns for civilian and military aircraft engines as well as turbine engines used in the oil and gas industry and hydroelectric power plants. Mold Masters currently has two facilities in the Cleveland area, their corporate headquarters and tooling division in one facility and their pattern division in a separate facility. They will now be able to consolidate both facilities when they move into the facility on August 1st, 2017.
May 18, 2017
CLEVELAND, May 18, 2017 – Orangetheory® Fitness, the energizing and fast growing fitness franchise announced that a new studio will be coming to Cleveland, located at 740 Prospect Avenue. With eight studios now open in the Northeast Ohio market and several in development, the brand will continue to target the Ohio area for expansion.
Stephanie and Kurt Altenburger, owners of the newest Orangetheory Fitness location will be celebrating its grand opening with a VIP party this fall. The new studio will feature new design and construction details for Northeast Ohio.
“We are thrilled to bring Orangetheory Fitness to our Downtown Cleveland community.” states Stephanie, “We knew in 2015 when we first introduced Northeast Ohio to Orangetheory in Rocky River, that it would change people’s lives across our “land”. With over eight locations open across NEO, this Downtown location will be our ninth open studio and we couldn’t be more excited to be located in the heart of our big city.”
Cleveland joins the ranks of major cities such as Chicago and New York to host Orangetheory Fitness. Classes are offered all day long, so the flexibility is not lost on those who need to get a workout in but also balance working downtown and enjoying the nightlife that Cleveland has to offer.
Isaac Gold, Director of Real Estate at Silken | Gold represented Orangetheory Fitness. “My team has truly enjoyed the opportunity to represent Orangetheory Fitness and their efforts growing their company footprint in the Northeast Ohio Market.”
Rico Pietro, Managing Partner of Cushman & Wakefield | CRESCO Real Estate represented the landlord. “Ownership is incredibly honored to announce our lease with Orangetheory Fitness at the Pointe at Gateway. Having a national best in class circuit fitness company only adds to the growing experience of downtown residents and daily workers. Where do you sign me up?”
For more information on the Downtown Cleveland Orangetheory Fitness and membership packages visit www.orangetheoryfitness.com.
May 5, 2017
Downtown Cleveland’s commercial real estate market has come alive in the last five years with renovation and new construction projects taking place across the city, says Joseph V. Barna, SIOR, Principal at Cushman & Wakefield/CRESCO Real Estate.
“The economy has turned,” Barna says. “The buzz of what’s going on in Northeast Ohio, specifically in Cleveland, has caught the attention of real estate investors from all over the country. People want to be here.”
Commercial real estate value is up across the board, both on the sales and leasing side, and in both the office and industrial sectors. In addition, land values have begun to rise as investors as well as users are more willing to put shovels in the ground and begin new rather than take on a property that has significant flaws. As the vacancy rate for the industrial market has dropped from more than 10 percent in 2008 and 2009 to 4.6 percent today, many of the more desirable buildings have come off the market.
“What you have are older multi-story structures and buildings that have been expanded several times and lack open contiguous space,” Barna says. “They simply are not functional.”
Smart Business spoke with Barna about the best strategy to follow in a growing real estate market.
What are some important tips for entering the real estate market?
It’s important to understand that you make money in real estate when you buy, not when you sell. Make an informed decision and don’t overpay. If you’re buying an older piece of real estate, understand the structure of the building and the mechanical components. How long will it be before the property becomes obsolete? What limitations does the space have that could hamper your growth plans as well as exit strategy? If you’re not experienced in real estate, these are things you may not think to consider. It’s critical to have a knowledgeable team that can walk you through the steps. Have a good real estate consultant, financial adviser, attorney, environmental specialist and a contractor all of whom understand commercial real estate. Surround yourself with a team of consultants that can lead you to a smart decision. So many people who have found success in business think they can easily transition into real estate. You need to look beyond the sales price, however, and think about total operating expenses. Additionally, if your plan is to have tenants, consider the cost of adapting the space to a tenant’s unique requirements.
How important is planning when entering a new market?
The planning process is critical both from the developer and user side. When you come into a market, you need to understand the trends and the characteristics of that specific location. There are certain sectors of Greater Cleveland and Northeast Ohio that are much more desirable for redevelopment or new development. When it comes to speculative construction, you need to be in the right place. Development firms utilize “feet on the ground” local experts to ensure their decisions are based on real-time market knowledge and guidance.
If you’re a user, there are limited choices in the market and your planning needs to be ahead of the curve. Assemble that team and make sure you are truly exposed to all the alternatives. On the leasing side, lease terms are longer today. People know that inventory is tight and they want to lock up functional space long-term, especially if it includes expansion and contraction rights.
Conversely, if you own a building, it may be a good time to sell because values are higher than they have ever been, demand is high and the supply is low. It’s also a good time to liquidate because there are a lot of buyers with cash looking to come into this market. The more qualified buyers you have interested in acquiring your property, the greater the likelihood of bidding up the price.
How do you deal with economic uncertainty?
The world of real estate, like most things, is always in a state of constant change. Change also brings opportunity and you just need to stay ahead of the trends and understand where is the opportunity. Technology has provided potential investors and users with so many sources of information, it can be overwhelming. Don’t make a rash decision. Rather, be willing to take a step back and think before you act.
May 5, 2017
EUCLID, Ohio - Another dead Northeast Ohio mall could be bulldozed for an industrial project, under plans being floated by an Atlanta-area developer that has constructed sprawling distribution centers for Amazon.com and other retail behemoths.
On Tuesday, Euclid's Planning and Zoning Commission will consider a request to rezone a 66-acre site, spanning Euclid Square Mall and a few adjacent parcels, from retail to industrial use. Documents filed with the city identify Seefried Industrial Properties, Inc., of Georgia as the potential buyer of the properties.
And those documents show that Seefried wants to construct a massive building - 650,000 to 1 million square feet - where the vacant mall now stands.
Documents submitted to the city of Euclid show that a massive industrial building could replace the shuttered Euclid Square Mall just off Interstate 90 at Babbitt Road and East 260th Street.City of Euclid
Dave Riefe, the company's senior vice president for the Midwest region, declined to comment Wednesday. Seefried's chief development officer, Jim Condon, didn't respond to an email. And a receptionist at the company's headquarters said nobody was available to talk.
The rezoning proposal doesn't identify an occupant for the building, a project labeled with the code name "Project Bark."
Seefried, a privately held business, has developed hulking Amazon.com distribution centers in Nashville and Richmond, Virginia, along with buildings for Home Depot, PepsiCo and PPG Industries, according to the real estate company's website.
The Euclid Square Mall property would be a logical landing pad for a distributor seeking easy access to highways, rail lines, utilities and rooftops. Before Jacobs, Visconsi & Jacobs Co. built the mall, which opened in 1977, the property was an industrial site, occupied for more than 40 years by a brass and copper-product manufacturing facility.
Bounded by Babbitt Road and East 260th Street, the property - a rare development site of that size for Cuyahoga County - sits just south of Interstate 90, not far from Interstate 271. The city's building department ordered the closure of the mall last fall due to safety concerns. At that point, the onetime shopping destination was home to a ragtag bunch of churches and businesses.
Bob Garber, a real estate broker representing the property, confirmed that there's a possible buyer. Citing confidentiality agreements, he wouldn't say more.
"There's an active deal pursuing the property. That's as far as we can go," said Garber, a principal with Cushman & Wakefield/Cresco Real Estate, which co-listed the mall and an empty Toys "R" Us store at an asking price of $5.75 million with Greg Guyuron of Anchor Cleveland.
There are five ownership groups involved on the sale side of the deal, according to the rezoning proposal. A representative for the largest owner, Beverly Terrace, Ltd., didn't respond to a request for comment.
Cuyahoga County records turn up more than $450,000 in delinquent property taxes tied to the mall and one other parcel. The mall has been eligible for property-tax foreclosure for years, but court records indicate that the county never initiated a foreclosure case.
The other parcels include a former bank and a shuttered grocery store.
"What's exciting here is a possibility for a full redevelopment of that site," said Jonathan Holody, Euclid's planning and development director.
He wouldn't talk about the potential user for the building or the number of jobs that might be associated with such a large project. "There's nothing I can share on that," he said.
But the city, which is updating its master plan, supports the rezoning and the concept of replacing obsolete retail buildings with modern industrial space. If the planning commission OKs the rezoning language next week, the proposal will be introduced to Euclid City Council on May 15 and would be eligible for a vote in mid-June.
"There has been good activity in our industrial corridor," Holody said. "We see this as a way to return the site to productive use and attract new jobs to the city."
On the other side of East 260th, Ray Fogg Corporate Properties recently wrapped up construction on the second building at Bluestone Business Park.
Property records show that Amazon, which is hush-hush about its real estate deals, has signed a five-year lease on part of that 127,000-square-foot building. Online listing records show that there's still a 47,000-square-foot space available for lease.
Ray Fogg, Jr., chief executive officer at Fogg, didn't return a phone call about the lease and the potential impact on Bluestone from the proposed industrial rezoning next door.
Amazon didn't respond to an emailed request for comment about its growing presence in the region and its possible interest in the Euclid Square Mall property.
"The market's tight," Terry Coyne, vice chairman of the Newmark Grubb Knight Frank brokerage in Cleveland, said of demand for industrial real estate. "Vacancy rates are at lows we've never seen before, both in the whole market and in modern distribution space. So it's not surprising that [Euclid] would try to turn a dead mall into a productive industrial site."
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