CLEVELAND-The law firm of Benesch, Friedlander, Coplan & Aronoff, LLP has restructured and renewed its 115,390-sf lease at 200 Public Square, also known as BP Tower. The 45-story, 1.27-million-sf, class A building was built in 1985 and was sold by Equity Office Properties last year to Harbor Group International for $141 million.

Public Square accounts for 35% of the Downtown office market, according to CB Richard Ellis’ Cleveland Downtown Office Market Review for First Quarter 2006. This renewal is reported to be the largest office transaction completed downtown so far this year, according to firm Studley, which represented the tenant in the transaction.

“This deal extends a relationship that began in 1930 when the firm was founded by several local attorneys,” explains Joe Lerner, Studley EVP, who along with fellow EVP Andrew Lechter, negotiated the deal. “Though Benesch, Friedlander had four more years until its lease expires, Cleveland’s soft office market coupled with a change in ownership at BP Tower led us to act quickly,” Lerner tells GlobeSt.com. “We began discussions when Equity Office still owned the building.”

According to Lerner, this tenant’s position as the largest user within the building motivated Harbor Group to retain the law firm by offering a competitive lease restructure package. “It’s really important to make it work for both parties.”

“In addition to a reduction in rent, Benesch, Friedlander will benefit from a tenant improvement allowance that will cover an office renovation” Lerner says. He says that the current office market has been stagnant in Cleveland, with little absorption.

BP Tower had been the North American headquarters for BP America prior to its 1999 merger with Amoco. Most of BP’s staff relocated to Chicago, according to Lerner. This prompted a major vacancy in the building as well, according to Lerner. The office building includes a 757-space parking garage, several restaurants, a fitness center, conference facility and an eight-story atrium.

Alex Jelepis, an SVP from Grubb & Ellis represented Harbor Group International in the transaction. Value of the transaction was not disclosed. The First Quarter 2006 Office Market Trends Report for Cleveland from Grubb & Ellis lists the average asking price for class A office space in downtown Cleveland at $23.83 per sf.

Chandler Converse, a SVP in the Cleveland office for Trammell Crow Co., tells GlobeSt.com that “the market has begun to pick up. Although this is one of the last markets in the US to recover, demand has been up this year.” He adds that there has been no new multi-tenant or speculative office space built in the city for almost a decade. “Mergers, relocations and corporate downsizings have slowed, so demand has started to pick up. However, if you’re a larger user needing 100,000 sf or more, you have few options but Downtown.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.