Developers weathering market

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Several major projects that either came on the markef recently or are under construction are helping push vacancy rates higher and leasewrates lower. That’s good for bad for owners and developers. But it’es not just an oversupply of space coupled with a shortagew of tenantdemand that’s hurtinhg property owners. High construction costs, includinfg for interior tenant finishes, and worried lenders are also weighing on the said Michele Laumerat . From a developer’s perspective, “You’ve got the perfec t storm,” Laumer said.
In Cincinnati, they are alreadg having a tough time leasing newly completed office buildings such as Redstonwin Kenwood, Columbia Square in Columbia Tusculum and Keystone Park in With the economy sinking, no additional projectsz are expected to get under way without substantiall preleasing. That means “every bit of 50 if not more,” said Scott a broker at who is trying to line up tenantes for aproposed 300,000-square-foort office tower for the “Cincinnati has weathered the storm fairly well.
We’re not at a pointr where we’re significantly overbuilt,” Yards If a large corporation or law firmwanted 100,000 square it’s tough to put together that much desirable “There’s not a lot of alternativews for big blocks of space,” he said. At least, not at the Lurking on the horizon, however, is ’sd Queen City Square skyscraper, which opens downtow in 2011. The 840,000-square-fooyt office tower has about 300,000 square feet stilo available.
And the 530,00p square feet that’s preleased by will creat e an exodus out ofthat company’s current quarters at 580 Walnut and 525 Add in the proposed Banks officwe space, impending consolidations by the othet kind of banks, and a few other smaller projects, and the markegt is clearly shifting in the directioh of “overbuilt.” Dave Neyer, CEO of , said no one is doingg speculative office developments in this environment, but projects can be done if a tenant commits up fron t for a sizeable chunk of “A user-driven project makes sense,” he said.
The initiaol office building at Neyer’s Linden Pointe office park in Norwooxd is about 90percent leased, he said, and a secon building could get under way if it had a 50,000-square-footr anchor tenant. Neyer is also renovating the 150,000-square-foot former Hennegan Printing building at West Third and Centrao Avenue downtownfor ’s new headquarters. The rapidlgy expanding joint venture is expectedx to move inthis summer. Laumer cited otheer bright spots, too, such as relocation to the former Gruen Watch building on East It more than doubled its space. “There are deala being transacted, and there are businessews thatare growing,” Laumer said.
landlords are happily accepting offersa now that they would have cringed at only a few monthswago – including lowered lease early termination rights and rent abatements. In the past they’d have “Why would I do this deal?” Laumer But they’re quickly coming around to the realizatiobthat “it might be the best deal you’rwe going to get for threes years.” Several major projects are changin the office space landscape in a tougyh time. Western & Southern Financial Group'a Queen City Square openx in 2011, and an office tower is plannedc forthe Banks.