As one of 200 Public Square’s two largest tenants, Cleveland-Cliffs’ decision to remain at Downtown Cleveland’s third-tallest skyscraper for a decade is a relief to its new owners and puts to rest rumors of the steelmaker opting for a new headquarters site (KJP). CLICK IMAGES TO ENLARGE THEM.
Steelmaker expands, extends lease by 10 years
Cleveland-Cliffs has put to rest rumors of its headquarters leaving downtown Cleveland’s third-tallest skyscraper for new digs by expanding and extending its lease at 200 Public Square. Not only did Cliffs add more space in the tower to just over 100,000 square feet, but it extended its lease there by another 10 years, according to a spokesman for the building’s leasing agent, Colliers International Group Inc.
Furthermore, Cliffs is renovating and updating its space, spread among three full floors and part of a fourth at 200 Public Square for its 1,000+ HQ employees. The leasable floorplates in the 45-story, 1,269,584-square-foot tower are among the largest for downtown’s tallest skyscrapers. Most floors at the Class A tower measure 31,022 square feet each, and that doesn’t include common areas like elevator shafts and lobbies.
Cleveland-Cliffs in 2011, then-called Cliffs Natural Resources Inc., relocated from 1111 Superior Ave. to 200 Public Square where it took 185,000 square feet of space. It leased all of floors 30, 31, 33, 34 and part of 32. It also subleased an extra-large 50,000-square-foot space in the building’s podium which it used as a training/conference center. Cliffs was founded in Cleveland in 1847.
But in the wake of the Great Recession in 2010, Cliffs reorganized. It shed a large amount of headquarters staff and subleased its space on the 30th and 31st floors until Cliffs’ lease for those floors was allowed to expire a couple of years ago, according to Colliers Senior Vice President Russell Rogers.
“It (the 31st floor) was vacant and then Cliffs needed it back again for new growth … long-term commitment — approximately 10 years on the entire premises,” Rogers said in an e-mail exchange today with NEOtrans.
At the end of April, Cliffs’ interiors architect Vocon Partners of Cleveland submitted a building permit application to the city to enhance Cliffs’ headquarters space. Requested is $400,000 worth of “alterations to offices on the 31st floor, with mechanical and electrical revisions,” wrote Vocon architect Jennifer Veverka in her filing.
Cleveland Cliffs and Huntington Bank are the two largest tenants in 200 Public Square, built in 1985 as the headquarters of Standard Oil of Ohio (KJP).
While that application is only for 3,270 square feet of the 31st floor, basically all of the offices along the eastern flank of the building, cosmetic updates are to be made to the entire floor. Crews are to work around Cliffs’ office employees who have already been moved in, Rogers said.
Cliffs’ growth began after the company, then focused on shipping- and mineral resources, acquired two large steel manufacturers in 2020. Cliffs acquired Chicago-based ArcelorMittal USA (AMUS) and AK Steel of West Chester, a Cincinnati suburb. A year later, it bought Detroit-based Ferrous Processing and Trading Company (FPT). Cliffs’ shopping spree cost it more than $7 billion but elevated it to be the nation’s third-largest steelmaker.
Patricia Persico, Cliffs’ senior director of corporate communications, opened an e-mail from NEOtrans seeking more information but otherwise did not respond to it prior to publication of this article.
Rogers declined to comment on what impact Cliffs’ long-term commitment will have on 200 Public Square but it is decidedly a positive one. He noted that Cliffs and Huntington Bank, both of which have naming rights to the tower, are the building’s two largest tenants with each leasing roughly the same amount of office space.
Cliff’s commitment to the future of the building was being finalized as the building was going through a controversial sale to a partnership of Namdar Realty Group and Mason Asset Management, both of Long Island, NY. NEOtrans was first to report the pending sale in December 2023.
Rendering of the renovated café and amenity space on the third level of 200 Public Square. The improvements include reflective lighting panels in the ceilings. These were provided in multiple locations on the third level to brighten up an otherwise dim interior (Vocon).
It was controversial because the buyers both have retail-heavy portfolios with little experience with office properties. They also bought the tower for just $54 million, or $133 million less than the prior owner paid for it in 2018. Granted, 200 Public Square’s attached parking garage was included last time; this time it sold separately for $31.25 million to Chicago-based InterPark Holdings Co.
But the new owners, organized as Public Square Nassim LLC et al, also said they have a formed a five-year capital plan to improve 200 Public Square and hired building General Manager Tom Smith 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.
“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.”
Cliffs has hopes for more growth even if it doesn’t acquire Pittsburgh-based rival US Steel as it has wanted since last summer. And it doesn’t consider it to be out of the running even though US Steel has agreed to be acquired by Japan’s Nippon Steel. Cliffs CEO Lourenco Goncalves said yesterday that the US Steel-Nippon Steel combination has “zero chance” of winning approval by the US government.
Insiders who spoke to NEOtrans last September predicted that if Cliffs is able to acquire US Steel, that US Steel’s roughly 800 headquarters employees would be moved to Cleveland to join with Cliffs’ 1,000+ HQ employees. If so, that would cause Cliffs to revisit on-and-off internal discussions about pursuing a standalone headquarters in Cleveland, either downtown or in the suburbs.
END
