Downtown Cleveland’s Huntington Building, also called 200 Public Square, is the city’s third-tallest skyscraper at 658 feet. The Class-A office property sold for a discounted amount owing to the challenging office market in the wake of the pandemic and the growth of remote working (KJP). CLICK IMAGES TO ENLARGE THEM.
Difficult office market hurt skyscraper’s value
According to a well-placed source, Downtown Cleveland’s third-tallest skyscraper is under a purchase agreement from a New York City-based buyer. The 45-story Huntington Building, also known as 200 Public Square, has seen its share of challenges since the pandemic and the rise of remote working nearly four years ago as other office properties have. That is one reason why the building has reportedly sold for a vastly discounted rate.
The source, who spoke on the condition of anonymity, said that the agreed-upon sale price for the 1.26-million-square-foot tower was approximately $65 million, or just $52 per square foot. For comparison, the source said the last time the 38-year-old skyscraper and its six-story atrium fronting Public Square sold more than five years ago, it fetched a price of $187 million.
However, the tower is appraised by Cuyahoga County at $136,692,100 for tax purposes and is due to pay $4.88 million in property taxes this 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.
Another reason for the reduced price is that the sale transaction apparently doesn’t include the tower’s attached, 757-space parking garage which has a property tax value of $10.1 million. Title to the garage will reportedly remain with a joint venture that has owned both the tower and garage since 2018. That joint venture, G&I IX 200 Public Square LLC, was led by New York City-based DRA Advisors and had a local stakeholder in developer Scott Wolstein who died in May 2022 at the age of 69 from stage 4 mucosal melanoma.
In the heart of downtown Cleveland, the 45-story Huntington Building with its six-story atrium fronting Public Square is bracketed by Superior Avenue on the left and Euclid Avenue on the right (Adam Greene). CLICK IMAGES TO ENLARGE THEM.
The New York buyer is also apparently an investor group and disguised by a limited liability corporation. Other than that, there was very little information available about the buyer. In recent years, many other New York-based real estate investors have expanded their portfolios beyond pricey New York City to look for deals in other cities.
The seller was represented in the transaction by CBRE Group’s Capital Markets section in Chicago. Blake Johnson, executive vice president of CBRE Capital Markets, opened an e-mail from NEOtrans seeking confirmation and additional information regarding the pending sale but otherwise didn’t respond to it prior to publication of this article.
Real estate brokerage Colliers represents the 200 Public Square property when it comes to office and retail leasing. An e-mail sent to Brian Hurtuk, managing director of Colliers’ Cleveland-Akron office, regarding the potential sale also was opened but not otherwise responded to prior to publication.
Colliers’ Web site for 200 Public Square lists the office spaces as nearly 72 percent leased, with 357,767 square feet of office space available. That includes four entire floors from 21 to 24 inclusive totaling 124,088 square feet as open after law firm Benesch moved earlier this year across Public Square to Key Tower, Ohio’s tallest. Also, Colliers lists 30,763 square feet of retail space available in 200 Public Square’s atrium.
After several million dollars of renovations last year, 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 by the owners to improve the building’s competitiveness (Colliers).
Another tenant, Dix & Eaton will relocate from a 25,000-square-foot space on the 39th floor of 200 Public Square where it has too much space. On or before its lease runs out in April 2025, the public relations and communications firm will occupy a 22,000-square-foot office in a partial residential conversion of the Bulkley Building, 1501 Euclid Ave. Security firm AML Rightsource relocated last year to the AECOM Centre, 1300 E. 9th St.
Others have stayed but reduced their office footprints including Morgan Stanley, Pricewaterhouse Coopers LLP and Huntington Bank which has naming rights to the tower. CBRE says the regional office for the Columbus-based bank is scaling back its space and could yield its branding on the top of the tower to steelmaker and shipping firm Cleveland Cliffs which has its growing headquarters in the building.
Before 2010, when Cliffs underwent downsizing, it occupied 185,000 square feet at the 658-foot-tall tower, another real estate insider said. Before it acquired ArcelorMittal USA and AK Steel in 2020, Cliffs had 110,000 square feet of office space. Now it’s heading back to and possibly above its former occupancy at the tower that was built by Standard Oil in 1985, then bought by British Petroleum America in 1987. BP moved its U.S. headquarters to Chicago in 1998.
Previously a dark passageway to the building’s parking garage, 200 Public Square’s owner DRA Advisor brightened up this and other common areas on the first and third floors (Colliers).
Cliffs occupies all of floors 31, 33 and 34 plus part of 32. It also has most of the extra-large sixth floor in the building’s podium where it has a 50,000-square-foot training/conference center. Cliffs was recently outbid in its pursuit of U.S. Steel by Nippon of Japan. Had Cliffs succeeded in its bid, two sources said the steelmaker would look for a new headquarters locally.
Cliffs isn’t the building’s only tenant in expansion mode. So is Akron-based law firm Brennan, Manna & Diamond (BMD). In March, NEOtrans broke the story that BMD nearly tripled its office space at 200 Public Square. To accommodate the company’s growth, BMD moved from a 6,778-square-foot office on the 32nd floor to a 15,044-square-foot suite on the 18th floor, according to the firm’s Cleveland office manager.
Last year, DRA Advisors made 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.
END
