In a sale due to close next month, a New York-based real estate investment firm is near to taking possession of downtown Cleveland’s third-tallest skyscraper, 200 Public Square. Separately, a parking company is buying the tower’s garage, not visible behind the building (Adam Greene). CLICK IMAGES TO ENLARGE THEM.
200 Public Square’s garage sells separately
According to two sources, Downtown Cleveland’s third-tallest skyscraper has been sold to a New York-based company that has more than its share of cheap or faded retail properties including many in Ohio. But the parking garage for the skyscraper, 200 Public Square, was reportedly sold separately to a buyer in Chicago that owns downtown parking properties nationwide, one of the sources said.
Speaking on the condition of anonymity, the sources said the buyer of the 45-story 200 Public Square is Namdar Realty Group of Great Neck, NY on Long Island. Namdar has the skyscraper and its six-story atrium fronting Public Square under a purchase agreement that is due to close next month. NEOtrans reported in December 2023 the pending sale and its extremely low $52 per square foot amount it apparently fetched, but we didn’t have the buyer’s identity until now.
The extremely low sale price is due to the 658-foot-tall, Class-A skyscraper losing high profile tenants in recent years, while some of its other tenants have scaled down their office spaces. The tower’s challenges are not unique among decades-old downtown office buildings which have struggled since the pandemic four years ago and the rise of remote working. In Cleveland, the only two buildings taller than 200 Public Square are Key Tower and Terminal Tower.
Another reason for the low purchase amount is that the sale didn’t include the attached, 757-space parking garage. It is under a purchase agreement to a separate buyer. One of the sources said InterPark Holdings Co. is reportedly buying 200 Public Square’s garage. A publicly-traded company, InterPark owns 62 parking properties in the urban cores of 12 cities mostly east of the Mississippi River. Plus it owns parking and other “pre-flight” assets at airports in five cities.
Namdar is a privately held commercial real estate investment and management firm that owns 74.6 million square feet among 370 properties in 36 states, according to its Web site. Of that, 177 are retail properties totaling 58.2 million square feet and 134 multi-family/mixed-use properties totaling 9.6 million square feet.
Looking west down Euclid Avenue toward Public Square in 2018, the parking garage and tower for 200 Public Square is seen at right (Google).
By acquiring the 1.26-million-square-foot 200 Public Square, Namdar’s 17-property office portfolio will grow dramatically, from nearly 2.8 million square feet to more than 4 million square feet. That’s an increase in square footage of 43 percent. The Cleveland skyscraper will be, by far, it’s largest single office property.
Namdar owns about 50 properties in Ohio, nearly all of which are retail. Half of all of its Ohio’s properties are Dollar General stores. In Greater Cleveland, it also owns multiple retail properties, plus skilled nursing facilities of Parma-based Legacy Health Services. It owns Severance Town Center in Cleveland Heights, except the Home Depot store and the closed Front Stage Multiplex theater.
Until early 2023, Namdar owned the failing Midway Mall in Elyria when it was acquired by the Lorain Port and Finance Authority. It is now weighing competing proposals from Industrial Commercial Properties and the Center for Food Innovation for redeveloping the 54-acre site.
Namdar also owns the 340,000-square-foot Medwick Marketplace, 1053 N. Court St. in Medina, the 311,478-square-foot Ohio Station Outlets at the interchange of Interstate 71 and Ohio Route 83 in Burbank, and the 102,765-square-foot Maple Heights Shopping Center, 15684 Broadway Ave., in its namesake city.
With Huntington Bank’s regional office in 200 Public Square reducing space and Cleveland Cliff’s headquarters taking more, it remains to be seen if Huntington will continue to have top billing atop the 658-foot skyscraper (CLICK IMAGES TO ENLARGE THEM).
Namdar CEO Igal Namdar and Executive Vice President Joshua Sabzevari both opened e-mails from NEOtrans seeking more information but did not respond prior to publication of this article. An inquiry sent to InterPark’s customer service e-mail address was not returned.
NEOtrans also confirmed the $52 per square foot purchase amount with a second source. At that amount, the 1.26-million-square-foot tower would sell at approximately $65 million. That’s a substantial discount from the last time the 38-year-old skyscraper sold.
In 2018, it fetched a price of $187 million from G&I IX 200 Public Square LLC, a joint venture led by New York City-based DRA Advisors with a local stakeholder in developer Scott Wolstein who died in May 2022 at the age of 69.
The tower was appraised in 2023 by Cuyahoga County at $136,692,100 for tax purposes and had paid half of its $4.88 million property tax bill last year. Depending on the new property tax value, the sale of 200 Public Square could result in the loss of at least $2.3 million in tax revenues divided among the Cleveland Metropolitan Schools, Cleveland Metroparks and local libraries. The garage had a property tax value of $10.1 million.
Seen from Public Square, the pink granite exterior of 200 Public Square reflects the afternoon sun in 2022 (Google).
The skyscraper was built in 1985 as the headquarters of Standard Oil — two years before the company was bought by British Petroleum America. BP moved its U.S. headquarters to Chicago in 1998. Last year, law firm Benesch left a 124,088-square-foot vacancy in the skyscraper when it moved across Public Square to Key Tower, Ohio’s tallest.
Real estate brokerage Colliers, which handles leasing for 200 Public Square, lists the building’s office spaces as nearly 72 percent leased, or 357,767 square feet of office space as available. Also, Colliers lists 30,763 square feet of retail space as available in 200 Public Square’s atrium.
Huntington Bank, which has naming rights to 200 Public Square, is reportedly downsizing its regional office at the skyscraper for the Columbus-based bank. It may also yield its branding on the top of the tower to steelmaker and shipping firm Cleveland Cliffs which has its growing headquarters in the building.
The tower’s seller was represented in the transaction by CBRE Group’s Capital Markets section in Chicago. Blake Johnson, executive vice president of CBRE Capital Markets, has declined to comment on reports of the pending sale.
END
