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Friday, May 6, 2016

K+D Plans Purchase of Terminal Tower, Plans Include Apartments

Posted By on Fri, May 6, 2016 at 2:01 PM

click to enlarge 800px-terminal_tower.jpg
Living in Terminal Tower?

A deal could happen this year to make that possible. The building already houses tons of office space — the largest tenant being Forest City — and if the deal goes through, 300 housing units could fit into the 250,000 square feet already dedicated to offices.

Michelle Jarboe of the Plain Dealer reports today that K+D has a deal in place to purchase the Tower from Forest City. (K+D is the largest owner of apartments in Northeast Ohio.) The price wasn't disclosed.

The sale could close in 120 days, said Doug Price, K&D's chief executive officer.

A Forest City spokesman declined comment to the PD on the article, but everyone should be curious about the company's thoughts going forward.

Forest City has 700 employees in NEO and, as Jarboe notes, executives aren't "thrilled" with their current offices. But where to next if their current space becomes housing?

In past interviews, leaders including David LaRue, the company's president and chief executive officer, have stressed that they're committed to Cleveland. The company does have local alternatives for its headquarters, including the Post Office Plaza building on the west side of Tower City. Forest City still owns Post Office Plaza, which is grappling with vacancies and is rumored to be losing Quicken Loans, a major tenant that appears likely to move into nearby space controlled by Dan Gilbert, the company's founder and chairman.

Quicken representatives have repeatedly declined to talk about a possible move. On Friday, a spokesman reiterated that the company doesn't comment on rumors.

Relocating to Post Office Plaza might be the simplest option for Forest City. But the $8.8 billion company, with projects and properties scattered across the country, could look at other locations – both within and beyond downtown Cleveland.

"They are going to go for a national search. So the city and the state are going to step up," Price said, alluding to the possibility that Forest City will seek financial incentives to stay put. "We need to keep them in Cleveland. The worst thing is that they move. We don't want that."

If the deal happens, the plan would be the third ongoing project for K&D. The Leader Building and Halle Building have been previously announced as mixed-use apartment and retail spaces coming soon.

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