Downtown Skyscraper Changes Hands
A prominent Downtown skyscraper has changed hands. Continental Centre, a 26-story office tower located at 150 E. Gay St., was transferred in January from LNR Partners in Miami, Florida, to an LLC affiliated with Toldeo-based Welltower.
According to public records, Welltower paid $11.97 million for the building. A representative of the company, which is a Real Estate Investment Trust (REIT) that focuses on healthcare and senior housing, declined to comment on the sale.
The building’s prime location and the current level of uncertainty surrounding the Downtown office market have led to speculation that it could be ripe for at least a partial residential conversion. Two blocks to the south, the Edwards Companies purchased the PNC Plaza building in 2016 and have presented plans to convert the upper floors to residential use and build new amenities for the building at the street level.
“Residential conversion of an older office building is a great reuse of Downtown space, especially as some have become less competitive with newer product both in Downtown and the region,” said Marc Conte, the acting Executive Director of the Downtown Special Improvement Districts.
Converting an office building into apartments is not a simple process, though, and some buildings present bigger challenges than others.
“A building with smaller floor plates, like the upper floors of PNC Plaza, lends itself well to this type of conversion – natural light is available throughout the apartment,” said Conte.
Christopher Potts, Brokerage Senior Vice President at Colliers International, handled the sale of Continental Centre, along with Taylor Fante. Steve Timmel of CBRE represented the seller.
The building was auctioned on the TenX platform, where it had 15 active bidders, according to Potts. The TenX website described the building as “ripe for repositioning as a continued office location or a mixed-use conversion including multi-family, condominium, or hotel along with maintaining existing office.”
The website also stated that the occupancy of the building was 39 percent as of August 31, 2020.
“Welltower is still forming their plans and concepts for the building and has asked Taylor Fante and myself to still market the office space for larger multiple floor users for lease should the market present that opportunity.” Potts said. “We are not considering office users below a floor or two in size.”
What ends up happening with the building will likely depend on how much demand there is for that type of office space. And that’s a question that many property owners Downtown will be looking to answer in the next two years, according to Conte.
“The long-term impact of work-from-home will cause many owners to rethink uses of property they own,” he said, although he cautioned that most of those decisions won’t be made right away. “The work-from-home equilibrium won’t be settled until mid-2022 at the earliest.”
Additional Reading: What’s Next for Downtown?