The Real Deal New York

Detroit landlord to unload 2.3M square-foot portfolio, Gensler to design tallest tower in Austin, and more…

National market report
By Dennis Lynch | September 01, 2017 11:00AM

A rendering of Grand Central in Columbus

Columbus: 23-acre vacant lot to get massive mixed-use development

An Ohio-based developer unveiled plans for a 23-acre mixed-use luxury project on one of the last large, undeveloped plots of land in Columbus’ Arena District, the Columbus Dispatch reported last month.

Brian Schottenstein, the president of Schottenstein Real Estate Group, told the local paper that the development would be a “district of its own.” Though the firm has yet to submit its plans to the city, as it stands, “Grand Central” would include a 120- to 144-unit condominium tower, a 206- to 270-unit apartment building, a 200-key hotel, a 125-room extended-stay hotel, a conference center, two parking garages and a two-story grocery store. The company has yet to select an architect, but it is currently in talks with potential joint venture partners for the project, which would be the largest Schottenstein Real Estate has taken on.

Schottenstein said his company was currently in contract to buy the vacant sailboat-shaped property sandwiched between Interstate 670 and Huntington Park. It sits just across the Scioto River from a 21-acre site, where the city of Columbus released a request for qualifications for master planners that could construct a $500 million, 3.1 million square-foot mixed-use development.

Michigan Theater building

Detroit: Troubled landlord looks to unload 30-property portfolio

An embattled Motor City property owner has put 30 commercial and industrial buildings on the market for sale and lease, Crain’s Detroit Business reported last month.

Dennis Kefallinos — who most recently made the news in February, when the city evicted 150 tenants from his Russell Industrial Center building over unsafe conditions — has been investing in Detroit real estate for decades.

The properties now on the market total 2.3 million square feet across 100 acres in Detroit and the adjacent city of Hamtramck. The portfolio includes some of Kefallinos’ more well-known holdings, such as the almost century-old, 12-story Harvard Square Centre high-rise and the former Michigan Theater building, both in downtown Detroit.

Kefallinos scooped up some of the properties at foreclosure auctions, and he’s often said he planned to convert some of the industrial buildings into restaurants or apartments. But over the years, he has been criticized for putting off renovations and improvements at his properties. At one point, the city even lined up one of his buildings for demolition before he persuaded it to reconsider, suggesting he would create micro apartments in the building.

None of Kefallinos’ residential properties have been listed for sale; in fact, many are tied up in a class-action lawsuit over code violations, his failure to obtain certificates of occupancy and alleged substandard living conditions, according to MLive.com.

A rendering of a proposed
62-story mixed-use tower

Austin: Gensler designing what could be the city’s tallest building

The capital of the Lone Star State may get a new — and rather tall — addition to its skyline.

Texas-based developers Lynd Development Partners and Lincoln Property Company are teaming up on a 62-story, 850-foot-tall mixed-used tower in downtown Austin, according to the Austin Business Journal.

Gensler is designing the glassy tower, which will have more than 500,000 square feet of office space, 300 luxury apartments and ground floor retail.

Michael Lynd Jr., president and CEO of his eponymous company, told the Austin American-Statesman that plans could change and the tower could reach 70 stories. He said the company hopes to break ground within the next year. The proposed building will easily surpass the 683-foot Austonian residential tower, which is currently the city’s tallest building. It would also spoil the title for the Independent, an under-construction condominium tower, which will be 685 feet upon completion.

The Gensler-designed building is set to rise at 600 Guadalupe Street, which is currently home to a low-rise Extended Stay America hotel. The project is expected to take four years to complete, but Lynd said that the team would complete the office portion first.

Austin was the country’s second-fastest growing metropolitan area behind Charlotte, North Carolina, from 2010 to 2015, with a population that increased 16 percent, to 1.9 million from 1.6 million, according to the U.S. Census.

Chicago: New York investment firm snags trio of Fulton Market loft buildings

New York investment firm Alvarez & Marsal has agreed to pay Sterling Bay $43 million for three loft office buildings in Chicago’s Fulton Market District, according to Crain’s Chicago Business.

The buildings total 166,000 square feet and are 90 percent leased with tenants such as Uber and Federal Savings Bank. The purchase, which is Alvarez & Marsal ’s first to the west of the Chicago River, will double the firm’s holdings in Chicago.

Sterling Bay purchased the three buildings — 300, 316 and 320 North Elizabeth Street — along with an adjacent unfinished office building and parking garage for $22 million in 2014 in a partnership with J.P. Morgan Asset Management, according to Crain’s. The company spent $10 million renovating the three buildings for sale, according to CBRE, which marketed the properties. The office building and parking garage, however, are not part of the sale.

Sterling is highly active in the Fulton Market neighborhood, a once industrial area that’s experiencing rapid redevelopment. Sterling sold 1K Fulton, a former cold-storage building now home to Google’s Chicago headquarters, for $257 million last year. It is also building a new headquarters for McDonald’s, a 200,000- square-foot office and a 156-room Ace Hotel nearby.