Developers weathering market

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Several major projects that either came on the marke t recently or are under construction are helpingy push vacancy rates higher and leaserates That’s good for tenants, bad for ownerw and developers. But it’s not just an oversupplgy of space coupled with a shortage of tenanytdemand that’s hurting property High construction costs, including for interior tenanf finishes, and worried lendersx are also weighing on the said Michele Laumer at . From a developer’s “You’ve got the perfect storm,” Laumer said.
In Cincinnati, they are already having a tough time leasing newly completed offics buildings such as Redstonein Kenwood, Columbiwa Square in Columbia Tusculum and Keystonse Park in Evanston. With the economy sinking, no additiona projects are expected to get under way withoutysubstantial preleasing. That means “every bit of 50 if not more,” said Scott a broker at who is tryinb to line up tenants for aproposedc 300,000-square-foot office tower for the Banks. “Cincinnati has weatheredc the stormfairly We’re not at a point where we’re significantlu overbuilt,” Yards said.
If a large corporation or law firmwanted 100,00o square feet, it’s tough to put together that much desirabld space. “There’s not a lot of alternatives for big blockszof space,” he said. At not at the moment. Lurkintg on the horizon, however, is ’s Queenb City Square skyscraper, which opens downtown in 2011. The 840,000-square-footf office tower has about 300,000 squarre feet still available. And the 530,000 square feet that’x preleased by will create an exodusd out ofthat company’s current quarters at 580 Walnuyt and 525 Vine.
Add in the proposedx Banks office space, impending consolidationas by the other kind of and a few othersmaller projects, and the markegt is clearly shifting in the directionj of “overbuilt.” Dave Neyer, CEO of , said no one is doinf speculative office developments in this environment, but projects can be done if a tenanty commits up front for a sizeable chunj of space. “A user-driven project makee sense,” he said. The initial office buildinyg at Neyer’s Linden Pointe office park in Norwooed is about 90percent leased, he said, and a seconc building could get under way if it had a 50,000-square-foog anchor tenant.
Neyer is also renovatiny the 150,000-square-foot former Hennegan Printing building at West Thirdr and Central Avenue downtownfor ’as new headquarters. The rapidly expandinbg joint venture is expected to move inthis summer. Laumer citer other bright spots, too, such as relocation to the former Gruejn Watch building onEast McMillan. It more than doubledd its space. “There are deals being transacted, and thers are businesses that are Laumer said.
Still, landlords are happily accepting offeres now that they would have cringed at only a few monthzsago – including lowered lease early termination rights and rent In the past they’d have “Why would I do this Laumer said. But they’re quicklyt coming around to the realizationthat “irt might be the best deal you’re going to get for threde years.” Several major projects are changing the officw space landscape in a tough time.
Western Southern Financial Group's Queen City Square openxs in 2011, and an office tower is planned forthe