Cleveland Continues Transforming Into Residential Hub
Both the redevelopment of historic buildings and new construction is changing the city's CBD.
CLEVELAND—Downtown Cleveland has seen a lot of residential development in the past few years, and it about to get even more. Berkadia recently completed the $37.9 million financing of The Euclid Grand, a mixed-use historic redevelopment in downtown Cleveland that will feature 239 apartment units, 196 parking spaces and 21,000 square feet of retail. Daniel Geuther, director of the Cleveland office, secured the loan through Union Labor Life Insurance Co. on behalf of the borrower, MD-based Alto Partners. The deal closed on September 27.
The three-year construction loan features three-years interest-only and a limited recourse guarantee, along with a 375-bp spread over LIBOR.
“This transaction was a culmination of a multi-year process to revitalize a key property in downtown Cleveland,” says Geuther. “This was a complex transaction involving historic tax credits, foreign investors/sponsors and six different sources of funds.”
“We had a very challenging structure of public and private financing on a property that was key to the completion of the historic gateway of downtown Cleveland,” says Michael Sabracos, chief executive officer of Alto Partners, US. “Dan’s team recognized and maneuvered through the many hurdles and road blocks that needed to be overcome to get us to a successful closing. In my book, they are the true rock stars in Cleveland.”
The multifamily market here has gotten so tight that government officials and developers are getting started on new construction projects. Cleveland-Cuyahoga County Port Authority announced earlier this year that it would issue approximately $80 million in bonds for Playhouse Square, the largest performing arts center in the country outside of New York, located in the heart of downtown Cleveland just down the street from The Euclid Grand project. And about $50 million of that will finance a portion of the construction of The Lumen, a 34-story residence tower and associated parking garage, which will include about 318 apartments, 530 parking spaces and 22,000 square feet of resident amenities.
Located at 1001 Euclid Ave., The Euclid Grand will afford residents walkable access to all of the amenities of downtown Cleveland such as Playhouse Square, and close proximity to the regional transportation network.