space has changed with telecommuting
and the adoption of digital document
storage (law firms are less concerned about
file storage). “Now you will see office size
shrink,” Pacella says, looking forward.
Meanwhile, the increase in residential
population downtown could spark a market for hoteling operations—communal
business spaces that serve telecommuters
and small shops that can pay a membership fee to gain access to space. (COSE
members already take advantage of this
concept with COSE Space at our downtown headquarters, 1240 Huron Road)
Businesses that want to get in on the momentum of downtown’s building projects
and growing population will consider relocating to the core. “The story you’re starting
to hear is, ‘The suburbs are nice,’ but I want
to be where the action is,’” Pacella says. ●
I THINK THE RESIDENTIAL OCCUPANCY, THE INFLUX
OF PEOPLE MOVING DOWNTOWN AND THE
EXCITEMENT OF CIVIC PROJECTS UNDERWAY ARE
ONLY GOING TO ACCELERATE THE ABSORPTION OF
VACANT SPACE THAT IS OUT THERE.
— ALEC PACELLA, NAI DAUS
“
”
properties—300 square feet here, 1,500
square feet there. But when a larger tenant
moves in, it’s worthwhile for the landlord
to spend on improvements. Then every
tenant, big and small, wins. “With an
anchor tenant to stabilize the investment,
[building owners] can focus on creating
opportunities for smaller businesses that
need additional space,” Pietro says.
Large blocks of space are being consumed
by companies like Rosetta, which moved
400 jobs downtown. Am Trust Financial will
bring 800 jobs downtown to the 800 Superior Building, formerly McDonald Financial
Group. Pricing and proactive economic
development interest are bringing companies
downtown. “Companies locating downtown
have an opportunity to look at job creation
grants,” Pietro says.
And landlords are eager to fill their
spaces. Paynter says her firm’s search for
downtown property started broad, and the
partner figured they’d land in the Warehouse District. But after touring nearly 30
properties and being aggressively courted
by Forest City Enterprises to lease Terminal
Tower space, the partners couldn’t refuse
the offer to locate to Public Square.
Hennes Paynter Communications got
the private office spaces its firm required,
plus a common area for meetings and training. Oh, and the views… “We have the best
of all possible worlds,” Hennes says.
Quez Media quadrupled its space with
its move to the annex building next to
Ohio Desk. Plus, it gains access to Ohio
Desk’s fully furnished conference room
that seats 50. The possibility of acquiring
additional space in the building if needed
is an important bonus. “We have grown so
rapidly and we wanted to make sure that
we’d have room to grow, and we do here,”
Dalessandro says.
Meanwhile, Pacella says the availability
of commercial real estate downtown is
shrinking. And prices are slightly higher,
though as Hennes noted, building owners
like Forest City were interested in accommodating needs. “It used to be a tenant
shows up, ‘O.K., you name the price and
we’ll do it,’” Pacella says. “That is not the
case right now. Prices have fired up where
negotiation is back in the office sales
game downtown.
“I think the residential occupancy, the
influx of people moving downtown and the
excitement of civic projects underway are
only going to accelerate the absorption of
vacant space that is out there,” Pacella adds.
Despite the average 80-percent office occupancy rate now, there are plenty
of spots for small businesses to move in
downtown. And the way businesses use
