CINCINNATI - When an Indianapolis investor paid $13.7 million Tuesday for the 580 Walnut Building, it became the fourth downtown office building in three months to sell for less than $30 per square foot.
That’s a steep discount from the pre-recession going rate of more that $100 for downtown square footage.
“It’s not a positive sign,” said Loren DeFilippo, director of analytics at Xceligent, a commercial-real estate research firm. “It’s a sign that maybe the market is bottoming out.”
Anderson Birkla Investment Partners LLC bought the 580 Walnut Building at a 56 percent discount, compared to the $30.1 million paid for the property in 2003, according to Hamilton County records. The Indianapolis-based investor plans to invest nearly $30 million to bring luxury apartments to the 17-story building’s upper floors. Office and retail space will remain on lower floors of the building located at Sixth and Walnut .
“The $40 million dollar investment to redevelop the 580 Walnut Building will revitalize and bring a resurgence to a prime downtown asset, creating a quality place of work, a unique opportunity for residents to live, and an exceptional place to be entertained,” said Anthony Birkla, a principal in the company, in a press release.
Anderson Birkla bought the property after its prior owner defaulted on a $24 million mortgage. James O’Connell, a senior vice president at Cassidy Turley Commercial Real Estate, represented the seller in the transaction. He views it as a positive sign for the downtown office market.
Cassidy Turley was also involved in the recent sale of the Ingalls building on Fourth Street, Holiday Office Park in Queensgate and Centennial Plaza near City Hall. All sold for less than $30 per square foot, allowing new owners to invest in the properties and attract new tenants, O’Connell predicts.
“If downtown was weakening, nobody would be buying these things,” he said. “I think it’s a very strong indication that Cincinnati is on the road to recovery and the downtown market is the place to be.”
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