Downtown Cleveland’s third-tallest skyscraper and the fourth-tallest in Ohio, 200 Public Square’s deed of ownership officially transferred last week to an affiliate of Namdar Realty. The new owner has hired a building manager and plans improvements to the building, although some were already underway by the prior owner (KJP). CLICK IMAGES TO ENLARGE THEM.
New building manager hired to deliver ugprades
Purchase of Downtown Cleveland’s third-tallest skyscraper last week was officially confirmed today by the skyscraper’s new owner. A partnership of Namdar Realty Group and Mason Asset Management, both of Long Island, NY, also said they have a formed a five-year capital plan to improve 200 Public Square and hired a new building manager to carry out that plan. Enhancing the retail offerings in the tower’s atrium for office tenants and nearby residential buildings is part of its goal.
NEOtrans was first to report the pending sale in December and, in February, we were the first to identify Namdar as the buyer as well as it fetching a very low price — $54 million. We also reported that the 45-story skyscraper’s five-level parking garage sold separately to Chicago-based InterPark Holdings Co. The attached, 757-space parking garage sold in February for $31.25 million to InterPark affiliate UGP-Cleveland Garage, LLC, public records show.
Both were acquired 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 from cancer at the age of 69. That joint venture acquired both the skyscraper and garage in 2018 for $187 million. The reason why they sold this year for a more than a $100 million discount is due to the lingering effects of the COVID-19 pandemic on the nation’s office market.
“COVID had an unfortunate effect on the character and vibrancy of many downtown areas, and Cleveland is no exception,” said Namdar’s Chief Operating Officer Dan Dilmanian in a written statement. “We are very fortunate to have acquired such an iconic building in a way that will allow us to strategically invest in its future. It has seen some significant improvements recently, but we know it requires more to align not only with the current needs of existing tenants, but also new tenants well into the future.”
Namdar Realty Group and Mason Asset Management, both with retail-heavy portfolios, said they intend to recruit new retail tenants to activate 200 Public Square’s atrium and sidewalk storefronts (KJP).
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 the building’s eight-story atrium which has a glassy façade facing Public Square.
The new ownership, Public Square Nassim LLC et al, has developed a five-year capital plan to further modernize and strategically reposition 200 Public Square under the leadership of new General Manager Tom Smith. Dilmanian said Smith is a Cleveland native with extensive background in building maintenance and engineering. Smith will carry out the capital plan which includes:
- Expanding the building’s retail amenities along Euclid Avenue,
- Continuing, where the previous owner started, with upgrading the lobbies and common-area space on the first and second floors,
- Renovating the exterior sidewalks and entrances to address safety concerns and improve curb appeal, including new landscaping; and
- Modernize the building’s elevators.
The goal to “strategically reposition” a property in the market often alludes to transforming and revitalizing an underperforming or outdated property into one that’s more profitable and attractive to potential tenants and eventual buyers. But it can also have a negative connotation in which lower-paying tenants are pushed out in favor of higher-paying tenants.
After several million dollars of renovations begun in 2022, a new café space offers a bright setting for meetings, lounging, lunches or simply unwinding away from the office. This and other improvements to 200 Public Square’s common spaces were sought improve the building’s competitiveness (Colliers).
“Our strategy is aimed at enhancing the building’s appearance, amenities, and aging infrastructure,” Dilmanian explained. “We are also focused on leveraging our national retail experience to breathe new life back into its atrium, which we hope will not only enhance the tenant experience, but also contribute to the vitality of Public Square and the growing residential neighborhood.”
In 2022, DRA Advisors began making nearly $3 million worth of improvements to 200 Public Square to improve its competitiveness with other office properties and remote working. The improvements included updated and brightened-up common areas — lobbies, enhanced conference center, improved fitness center, new café and bathrooms — totaling 35,420 square feet.
The office tower was built in 1985 as the headquarters for Standard Oil, founded by Clevelander John D. Rockefeller. Two years later, the company was bought by British Petroleum America. BP moved its U.S. headquarters to Chicago in 1998. The tower’s two largest tenants are currently the shrinking regional headquarters of Huntington Bank and the growing national headquarters of Cleveland Cliffs, a large steelmaking and shipping company.
Namdar is a privately held commercial real estate investment and management firm with a building portfolio of 74.6 million square feet among 370 properties in 36 states, according to its Web site. Retail properties comprise 78 percent of Namdar’s portfolio, or 58.2 million square feet. Another 9.6 million square feet is multi-family/mixed-use properties.
Previously a dark passageway to the building’s parking garage, 200 Public Square’s prior owner DRA Advisor brightened up this and other common areas on the first and third floors (Colliers).
By acquiring the 1.26-million-square-foot 200 Public Square, Namdar’s 17-property office portfolio grew dramatically — from nearly 2.8 million square feet to more than 4 million square feet. That’s a 43 percent increase in office space square footage. The Cleveland skyscraper will be, by far, Namdar’s largest single office property.
Mason Asset Management is also a retail-heavy real estate investment firm, with 120 shopping centers including 45 regional malls in its portfolio. Founded in 2010, it focuses on the acquisition, management, disposition, and leasing of commercial real estate in the United States, it said in today’s announcement about 200 Public Square.
Half of all of Namdar’s Ohio’s properties are Dollar General stores. In Greater Cleveland, it also owns most of 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 which is seeking to redevelop it.
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.
END
