Unlike some other downtown Cleveland office tenants that have reduced space or left downtown entirely, commercial loan originator Berkadia Commercial Mortgage is expanding on the 14th floor of Key Tower, 127 Public Square (Google). CLICK IMAGES TO ENLARGE THEM
Commercial loan firm bucks recent downtown trend
By the end of this year, commercial loan originator Berkadia Commercial Mortgage will be showing off its greatly expanded offices on the 14th floor of Key Tower, 127 Public Square. And that expansion offers a couple of statements about Greater Cleveland’s economy in general and downtown Cleveland in particular.
Like most central business districts in the USA, downtown Cleveland has seen its share of office space reductions by tenants large and small due to the lasting effects of the pandemic and its expansion of remote working. But that decline goes back at least a decade when downtown had 23.7 million square feet of office space. Today, it has 16.56 million square feet, according to real estate analytics and listings firm Newmark — a drop mitigated by the conversion of older office spaces to residential or at least mixed uses.
So any uptick in office space use is a welcome sign, even when it’s numerically a small one like Berkadia Cleveland’s. However, their growth from 3,200 square feet to 5,200 square feet is a 63 percent increase in office floor space. And their community investment represented by expanding that space amounts to $150,000, according to public records from the city’s Building Department.
“Currently, the Berkadia Cleveland office has 11 employees and intends to add a few additional team members over the next few quarters,” said Dan Geuther, managing director at Berkadia Cleveland. “Over the last six months, our team has doubled as we’ve brought on a team of three HUD (US Department of Housing & Urban Development) bankers, which is a new service line for us in Cleveland and bolstered our mortgage banking professionals.”
Berkadia Cleveland’s existing office space will expand into the northwest corner of Key Tower’s 14th floor (EWA).
The addition of the HUD bankers underscores that, while multi-family developments are residential, they are considered to be commercial developments in the real estate world because businesses develop, own and operate them. Thus, the growth in the number of apartment units in Greater Cleveland and especially in the urban core is having a spin-off benefit. And Berkadia is aggressively seeking that and other business opportunities.
“Our team has been diligently analyzing our clients’ portfolios and recommending creative solutions as we navigate the ever-changing commercial real estate landscape,” Geuther said.
The architect overseeing Berkadia Cleveland’s expansion is Erbach Waddell Architects LLC, based in Chagrin Falls. The interior alterations include the installation of new plumbing, heating-ventilating-air condition, electrical work and fire protection systems. The interior buildout includes furnishing five enclosed offices and installing several workstations, plans show. That will allow Berkadia Cleveland to comfortably accommodate its growing staff and grow its business.
“While the market at large has been turbulent over the last few quarters, driven by inflationary environments and rising interest rates, our growing team has taken the opportunity to use additional bandwidth to deeply analyze our client’s portfolio needs,” Geuther added. “By expanding our team over the last year, we’ve had the bandwidth to properly spend time reviewing and capitalizing on opportunities that provided key returns for our clients amidst shifting markets. We’re excited for the continued growth of our footprint in Cleveland as well as the opportunity to continue providing first-in-class service to our clients for years to come.”