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DAYTON, OH-The New York City-based Matrix Realty Group has purchased a 225,000-sf office building in the Downtown for less than $4 million. Cincinnati-based Union Central Life Insurance LLC sold the 94%-occupied 40 W. Fourth Centre building, which has Miami Valley Hospital as its main tenant.

Jeff Johnston, SVP with Grubb & Ellis/West Shell, along with SVP Steve Timmel and Tom Nikolai, VP/general manager with Mark Fornes Realty, represented the life insurance company in the deal. Johnston says the company had been looking for a way out of the property. “It was a project they foreclosed on many years ago, and had been vacant at the time,” he tells GlobeSt.com. “At around 2000, the hospital started leasing up space, and now they’re in about 78% of the building.” There are five other tenants in the facility, he says.

The price is justified because of extremely low rent that the hospital is paying now, Johnston says. “The hospital just renewed for five years, so it made sense to sell based on that,” he says. Downtown Dayton, in contrast to the city’s East and South suburban submarkets, is not doing well, mostly because of the Mead Paper Co., the local main business, pulling out of the city after a merger and moving to the East Coast. “That created a huge vacancy issue in that marketplace, but it’s sure to get filled up,” Johnston says.

He says the asking rate of the 40 W. Fourth building is about $12.50, gross, a few dollars cheaper than newer class A landlords can attract. “I’d say this is an A minus property, the floorplates aren’t as big and it’s a block and a half off of Main and Main in the Downtown,” Johnston says. The building, built in 1969, includes an attached six-story parking garage with 360 spaces.

Glen Nelson, chairman of Matrix, tells GlobeSt.com that he’s used to chasing after value deals. “This is a straight-forward good building. The insurance company did the building right, they spent millions on the infrastructure, it’s practically brand new, everything is state-of-the-art inside. It really has a lot of potential,” Nelson says. His company owns about 2,000 apartments throughout the Midwest, especially Ohio and Michigan.

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