It’s no secret that the office sector continues to struggle. Blame the work-from-home movement: A growing number of companies no longer need large swaths of office space. That’s leaving plenty of empty office space in the cities and suburbs across the Midwest.
This doesn’t mean that there aren’t office success stories, though. And one of them is happening in the Midwest, where Cincinnati’s The Strietmann Center office building continues to attract a steady stream of tenants.
The center, a seven-story, Class-A building in Cincinnati’s bustling Over-the-Rhine neighborhood, recently secured its newest tenant, a user leasing 6,610 square feet. With that lease, the center is now 96% occupied, with just one suite of 5,145 square feet still available.
It’s just one example of the flight to quality taking place now in the Midwest. Top-quality office properties, like The Strietmann Center, are attracting tenants thanks to their amenities and locations in walkable neighborhoods. Tenants are willing to spend more dollars per square foot while downsizing to smaller office footprints.
Michelle Klingenberg, senior vice president with the Cincinnati office of JLL and the broker marketing the property, said that The Strietmann Center is well-poised to succeed even in today’s challenging office market.
Klingenberg gives much of the credit for the building’s success to its owner Grandin Properties and that company’s president and chief executive officer Peg Wyant.
Klingenberg said that Wyant and Grandin had a vision for what The Strietmann Center could be when they purchased it. The goal was to create a unique working environment that offered high-quality amenities along with a visually appealing exposed ceiling, creative spaces for people to work and luxurious finishes.
The building also features a first-floor coffee shop that also serves wine and small-plate meals along with a rooftop community area that the public can rent for weddings and other events.
“When you walk through the building, you immediately see that this is a unique place to work,” Klingenberg said. “It’s not a typical office space with a drop ceiling and grey walls.”
A long history
The Strietmann Center boasts a long history in Cincinnati, originally built in 1899 for the Strietmann Biscuit Company.
The building at 231 W. 12th St. in the Over-the-Rhine neighborhood totals 91,283 square feet. Its amenities include an onsite coffee shop and wine bar, rooftop terrace, Penthaus event and conference center, onsite catering service, mother’s room and locker room and showers.
It’s also located in one of Cincinnati’s more popular neighborhoods. It sits adjacent to a YMCA and is just steps from Washington Park and TQL Stadium, home of FC Cincinnati, a MSL soccer team. It is also in the heart of the Over-the-Rhine neighborhood’s entertainment district.
The Strietmann Center is attractive to office tenants who support green building initiatives. The property is Cincinnati’s only commercial building with solar panels. It has also earned Gold LEED certification.
“A lot of money and time went into restoring the old biscuit bakery,” Klingenberg said. “It had been left as an old, dilapidated warehouse. Grandin Properties saw its potential and turned it into a place where employees want to be.”
This is important today. As Klingenberg said, the hybrid work schedule is not disappearing. Employees like the flexibility of working from home some days and in the office on others. To persuade employees to come into the office, companies need to offer attractive spaces that boost the productivity of workers.
Workers today are increasingly choosing to work from home when it’s time to do heads-down work, typing at their computers, drafting reports or running spreadsheets. When it’s time to brainstorm, collaborate and meet with clients and their fellow workers? That’s when they want to come into the office.
And on those days, they’re looking for office space that features plenty of natural light, creative collaboration spaces and amenities both inside and outside the property.
“Owners need to invest in buildings and make them a place where employees want to spend time,” Klingenberg said. “Properties like this show that companies will pay more money to go to where their employees want to be. It is no longer about finding the cheapest office space. It is about finding quality space. This approach allows owners to push rents and get a great return on their investment.”
The first-floor coffee shop and wine bar is an example. Klingenberg said that Grandin Properties was proactive, bringing in this amenity and not waiting for an outside retailer to set up shop in the space.
“That has helped the success there,” Klingenberg said. “Tenants appreciate that space.”
The right location
The Strietmann Center benefits, too, from its location. Cincinnati’s Over-the-Rhine neighborhood remains one of the city’s most vibrant, filled with shops, restaurants, green space, apartment buildings and cultural activities.
“The neighborhood is one of the reasons why the Strietmann Center has attracted a lotof tech and creative tenants,” Klingenberg said. “The employees at those companies are young and hip. They live in the area. There are cool apartments and housing options in Over-the-Rhine. Workers can walk to bars, coffee shops and entertainment. The MLS stadium is right across the street. It’s an ideal location.”
While The Strietmann Center is one notable example, it’s not the only office property in Cincinnati that is attracting tenants today. Klingenberg said that, yes, the Cincinnati office market has seen its challenges. But it’s also been resilient.
The CBD is seeing rising vacancy rates and a slowdown in demand for office properties. But Klingenberg said that many suburban office buildings are benefitting today from the flight to quality, with tenants seeking out these modern spaces with ample and free parking.
“Those office properties are doing well today,” she said. “The flight to quality is real. Suburban properties in the middle of amenitized areas with free parking are where everyone wants to be.”
Conversions have helped the Cincinnati office market, too, Klingenberg said. Developers have turned some underperforming lower-class office properties into multifamily properties and hotels. That has helped reduced vacancy in the local office sector.