Suburban Cleveland Office Property Sells for $61M
- Nov 21, 2019
Mohr Capital, a Dallas-based real estate investment firm, has sold a 460,000-square-foot net leased office building in the Cleveland suburb of Mayfield Heights, Ohio, in an off-market transaction for $61.1 million—one of the largest deals in the company’s history. The buyer of the property, which is fully leased to Rockwell Automation for 13 years, remained undisclosed.
Rodrigo Godoi and Kyle Campbell, who both serve as directors of acquisitions for Mohr Capital, represented the firm throughout the transaction. No brokers were involved.
The firm bought the asset about two years ago when it was in foreclosure proceedings and Rockwell Automation only had three years left on its lease, according to Godoi. He said in a prepared statement that Mohr Capital saved Rockwell Automation millions of dollars in rent while stabilizing the property with a long-term lease that created substantial value for both parties. Rockwell Automation, a provider of industrial automation and information products, has about 2,000 employees at the Mayfield Heights site.
Mohr Capital acquired the office center for $52 million two years ago. The asset had been part of Norman Rockwell Ohio LLC’s portfolio. Located at 1 Allen Bradley Drive, the property spans 36 acres and is comprised of three office buildings that were completed in 1995. It has an adjacent parking lot that can accommodate up to 970 vehicles. The tenant owned the property until 2005, when it was sold to First Industrial Realty Trust in a sale-leaseback deal. Norman bought the asset in 2006 from UBS Realty Investors but filed for foreclosure in April 2017, according to Yardi Matrix data. The company had been unable to pay a $52 million loan it had assumed during the acquisition in 2006, when it bought the property for $65.4 million, Crain’s Cleveland Business reported.
Tight Suburban Submarket
Located in Cleveland’s underserved East submarket, the property is near Interstate 271 and approximately 30 minutes from the urban core.
Newmark Knight Frank’s Cleveland Office Market report for the third quarter notes that the submarket’s vacancy rate decreased by 50 basis points to 11.6 percent from the previous quarter, compared to 17.3 percent for the overall Cleveland market.
NKF’s research showed rental rates further stabilized with asking rates about $18.93 per square foot, down 34 cents per square foot from the previous quarter. The report stated that despite the decrease in asking rent, the East submarket had the highest overall rent for the all the suburban submarkets.