Downtown Cleveland’s Ohio Savings Plaza on East 9th Street and its little brother Park Plaza to the east both sold to the Kassouf family albeit under different corporate identities. And they sold for bargain price (Google). CLICK IMAGES TO ENLARGE THEM.
Kassouf buys Ohio Savings, Park plazas
Rumors had swirled for weeks but no one was willing to confirm it — until yesterday when the sale of the Ohio Savings Plaza and Park Plaza office buildings hit public records.
Those records from the Cuyahoga County Fiscal Office show the as-rumored buyer, the Kassouf family, apparently got both downtown towers. And they got them for a veritable steal that could allow them to be redeveloped.
Kassouf, doing business as 1801 East 9th LLC, bought the 18-story Ohio Savings Plaza, 1801 E. 9th St. And, the family also bought the 9-story Park Plaza as 1111 Chester LLC, which also uses the street address as its corporate identity.
Both corporate identities were incorporated June 22 and used the same tax address of 1301 E. 9th, which is the same address at the Galleria that Kassouf owns and uses for its offices.
NEOtrans called Elias Kassouf who handles the family’s real estate business last week to get more information about the sale rumors. He said he was busy and would call back. He did not. Calls this week were not answered.
Park Plaza is a nine-story office building overlooking Perk Plaza and East 12th Street. It sold for a mere $1 million to an affiliate of the Kassouf family (Colliers).
Kassouf’s real estate broker, Cushman & Wakefield CRESCO Principal Rico Pietro, did not respond to multiple text messages in the past week seeking confirmation and comment.
But what is the most compelling story here are the final sales prices.
Ohio Savings Plaza fetched $3.25 million. Park Plaza was acquired for $1 million. That’s $4.25 million for 457,736 square feet of downtown buildings that are in good condition.
It’s a statement on the sorry state of the office market in real estate in general since the COVID-19 pandemic and among downtowns in particular. Almost every downtown office market in the nation is in the doldrums yet updated properties with amenities are performing better.
Terry Coyne, executive vice chairman in the Cleveland office of commercial real estate services firm Newmark, said he wasn’t surprised at the bargain prices. And he didn’t necessarily consider the sale amounts to be bad news.
With the Ohio Savings Plaza at left, the Huntington Garage to the right of it, and the Park Plaza beyond under the same ownership, it offers the opportunity for a major residential-hotel redevelopment that could include activating the roof of the garage as an amenity space for tenants of the adjacent buildings (Google).
“Counterintuitively, we want the prices to be as low as possible, because it gives the next buyer more room to invest and be successful,” Coyne said.
Ohio Savings Plaza was appraised by the county for tax purposes at $13.5 million, down from its peak of $23.7 million in 2007. Park Plaza was appraised for taxes at $4.4 million, down from its peak of $9.95 million in 2001, county data shows.
“There will be a hit to the real estate tax values, but in the long run we need to wash these bad deals out at the lowest price possible,” Coyne added.
Leases at Ohio Savings and Park plazas were cleared in advance of both buildings being put up for auction June 8-10 by RI Marketplace. Together, they were available for a minimum bid of $1 million.
Kassouf has been busily bargain hunting lately in acquiring downtown real estate. At the start of this year, via an affiliate Chester & E. 9th Garage LLC, Kassouf bought for $7 million what has historically been called the Huntington Garage, 999 Chester Ave.
The Huntington Garage is connected by a pedestrian tunnel to the 1.45-million-square-foot 925 Euclid at left, which is also completely vacant and remains for sale by a court-appointed receiver (Google).
The five-level, 1,179-space, 61-year-old parking structure is bookended by the 1969-built Ohio Savings Plaza to the west and the 1972-built Park Plaza to the east. Kassouf now owns the entire block.
Together, the trio of structures could make a compelling residential-hotel redevelopment with the connected parking and rooftop amenities, similar to Kassouf’s $218 million Erieview redevelopment, adjacent to the Galleria on East 9th.
In April, NEOtrans broke the story that Kassouf acquired the 1968-built, 23-story 800 Superior office tower and parking garage for $4 million from Allstate Corp. Allstate’s affiliate and second-largest tenant National General Insurance said it was vacating the building before year’s end.
NEOtrans also broke the story that 800 Superior’s largest tenant, AmTrust Financial Services, was not only leaving the 587,118-square-foot office building at its namesake address, but most of its offices were leaving downtown for suburban Mayfield Heights.
Two years ago, Kassouf also acquired the condemned Statler Garage, 1111 Hickory Ct., which has a vehicular entrance on Euclid Ave. The garage and its Euclid driveway replaced the old Stillman Theater that closed in 1963. Kassouf bought it for $1.15 million, county records show.
END
