NEWS FRONT
Columbus Tries Parks to Lure Residents Downtown
COLUMBUS, OH—Though this Ohio city is one
of the largest in the US in terms of size, 212
square miles, its Downtown has never had a
large residential presence. From its peak of
30,000 residents in the 1950s, Downtown
Columbus now houses fewer than 6,000.
However, through two city-created plans,
one in 2002 and a second, follow-up plan
being created this year, the city hopes to
increase Downtown housing. Key to these
plans is the $2.3-billion Downtown revitalization effort currently under way, the nine-acre Columbus Commons and the riverfront
Scioto Mile. Spearheading these efforts is
the Columbus Downtown Development
Corp., which is being assisted by New York
City-based Georgetown Co.
In 2002, the CDDC and Georgetown
agreed that two properties in the heart of
Downtown had to be revitalized: the empty
750,000-square-foot Lazarus Building owned
by Federated Corp. and the failing one-mil-
lion-square-foot City Center Mall. Ed
Lampert, a principal with Georgetown, says
that they knew filling the Lazarus office
property was the keystone of the redevelop-
ment. “Federated donated the building to
the development corporation, and we con-
vinced then-Gov. Bob Taft to relocate state
agencies into the building, including a large
portion of the state EPA,” he relates.
Executive Moves
FARMINGTON HILLS, MI—Locally based Friedman
Real Estate Group Inc. has promoted Glenn
DesRosiers to SVP, commercial brokerage.
CHICAGO—Jones Lang
LaSalle has appointed
Peter Bulgarelli as COO
of the firm’s Healthcare
Solutions Group.
CHICAGO—David Everson
has been named general
manager of Opus
Development Corp.’s
office here, pursuing
development and investment opportunities
and development operations.
For more executive moves, please visit
www.globest.com/executivewatch.
Bulgarelli
Midwest Growth Should Follow Activity
Although the market is officially out of the Great Recession, much
of the news continues to paint a dismal picture for the Midwest
commercial real estate industry, and the office sector in particular.
However, while the consensus remains apprehensive, and even pessimistic, the Midwest market isn’t as bad as most would believe.
Office leasing has begun to pick up and the
number of tenants seeking new space has also
increased dramatically, and it isn’t likely to
decrease anytime soon.
For the past
two years, companies in the Midwest have been
waiting out the economy and can no longer
afford to continue the holding pattern. As they
come back into the market, these users will
need one of three things: to increase their current space due to
growth or consolidation, decrease space due to cutbacks or
increased efficiencies or find new space that enables them to take
advantage of today’s lower rental rates.
Office rental rates remain at all-time lows and are not likely
to show signs of significant improvement until the economy
demonstrates sustainable job growth, which is still three to
four years away for the Midwest. That said, both small and
large tenants are beginning to take advantage of the lower
rates and landlord concessions, thereby increasing leasing
activity. This is due in large part to the fact that tenants currently leasing a class C facility now have the option to upgrade
By John Fitzmaurice
to B space for an equal or better rate. Likewise, those in B
buildings can most likely find A space at equivalent rates.
Two additional factors yet to play out will also likely have a
significant impact on the local commercial real estate economy—the midterm elections and the return of JP Morgan
Chase’s lending activity.
The midterm elections will undoubtedly have an impact on the
market. Both Wall Street and Main Street, whether or not they
acknowledge the fact, prefer gridlock in the government. Corporate
decision-makers and consumers are far more likely to move the
economy in the right direction than the government, and for this
to happen, we need some modicum of gridlock and improved
consumer confidence. After the elections, a level of uncertainty
will pass and the market in the Midwest will start to show additional
signs of life.
The second factor that will play perhaps the most significant
role in improving the midwestern economy is that the banks
must realize that there is money to be made in lending again.
It’s no surprise that since the financial meltdown, lending institutions have been reluctant to finance real estate deals. However,
as soon as the major financial institutions get into the game, the
small to midsize lenders will follow suit and the real estate market will get a jumpstart.
John Fitzmaurice is a principal with JCF Real Estate in Schaumburg, IL.
He may be contacted at jjfitz@jcfre.com. The views expressed here are
the author’s own.
