New skyscraper here?
Plan for city's tallest tower revived; W&S testing market for office building to top Carew
BY JON NEWBERRY |
JNEWBERRY@ENQUIRER.COM
Western & Southern Financial Group Inc. is turning up the heat on its long-simmering plan for a major downtown office tower and could begin construction next year if pre-leasing is fruitful.
The proposed skyscraper, dubbed Queen City Square ever since plans were initially floated almost 20 years ago and then revived in 2002, would be the tallest in the region - taller than the 574-foot-tall Carew Tower.
Initially, it was to have 37 floors, but now could be taller, said John Barrett, chairman and chief executive of the insurance and investment services company.
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It would provide 720,000 square feet of offices and up to 2,000 parking spaces.
"We're out there aggressively trying to pre-lease that tower," he said, noting that Western & Southern developed the 580 Walnut office building in 1974, helping spark a surge in downtown development that lasted into the early 1990s. "It's time for the next wave," he said.
Barrett said Western & Southern has filled all but half of one floor in its 15-story 303 Broadway building, which opened in 2005; and it's eager to help attract new corporate headquarters downtown.
Western & Southern is also running out of room for its own growing operations, which employ about 1,800 people downtown. It announced last week that it's bringing in another 50 jobs when it relocates a subsidiary from suburban Philadelphia later this year.
Western & Southern is working with its architect to put finishing touches on the Queen City Square building, a detailed model of which is in the former Guilford School building on East Fourth Street where the company's Eagle Realty Group is located.
The company has no construction timeline; the plans still need approval from the city.
The tower would be between Third and Fourth streets on the east side of Sycamore. A parking garage with 1,500 spaces would be demolished.
The new building would be adjacent to the 303 Broadway building at the northwest corner of Third and Broadway. That building - the first office tower built downtown in 14 years - has 185,000 square feet of offices and 666 parking spaces.
Wayne Hach, president of Cincinnati Commercial Realtors, an office brokerage specialist, said the supply of vacant office space downtown has been pretty stable in recent years, and there has not been a large demand. The vacancy rate in newer buildings is about 16 percent, which is not high, he said. In 2006 more space opened up than was occupied, but in the first quarter of this year that trend reversed.
Hach said there has not been a lot of expansion among existing office tenants and little migration from the suburbs or from out of town. There's a market for upgrades, though - tenants who want better, newer space - and there are few large blocks of 50,000 square feet or more, he said.
"I would expect a new Class A building would carry a significant premium over current market rates," Hach said. "The question is: What is that premium, and how many companies would be willing to pay it?"
One building with plenty of vacant space is the 600 Vine building, which Convergys Corp. left when it moved to Fourth Street. The tower at Sixth and Vine was acquired last year by Hertz Investment Group, which has been pricing it aggressively to attract tenants. Hach said the 29-story structure, built in 1984, would be considered "Class A-."
"What Western-Southern proposes to build would be significantly more prestigious and newer and better," he said.
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