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Lichter works to rehab buildings, find tenants for vacant two
By Jim Mackinnon
Beacon Journal business writer
Published on Sunday, Nov 08, 2009
The ''Available'' signs have been up for a while at two of developer Stu Lichter's newer acquisitions, former Goodyear-owned buildings in Akron.
Lichter is actively seeking tenants — and says he is getting some interest — for the former Goodyear medical office on Goodyear Boulevard and the now-empty former bank at the corner of Goodyear Hall facing East Market Street.
Work is proceeding, albeit slowly in some cases, on the complicated $900 million Goodyear Riverwalk headquarters and neighborhood revitalization project in East Akron.
Lichter said this week he's pleased with the progress he sees, particularly in the context of the deep recessionary economy.
Lichter's California-based company, Industrial Realty Group, or IRG, now owns much of Goodyear Tire & Rubber Co.'s campus. The tire maker is leasing its global headquarters and other facilities from Lichter.
IRG and Goodyear are continuing negotiations over the building of a new global headquarters on vacant land next to the company's technical center off Martha Avenue, Lichter said.
''We're working diligently,'' he said. ''It's still a tricky environment. . . . I think the new headquarters deal is going to happen and fairly quickly.''
Banks are still reluctant to lend money for these kinds of projects, Lichter said.
Lichter and his company specialize in buying large, aging commercial and industrial properties at low prices. IRG then cleans and fixes up sites and leases out the space. IRG's largest concentration of properties and projects is in Ohio and, besides Goodyear, includes Canal Place in downtown Akron, plus the former Hoover Co. campus in North Canton and the Lockheed Martin campus near the Akron Airdock.
Work is proceeding to rehabilitate and upgrade the Goodyear buildings while they are still occupied, Lichter said.
Forced change of plan
The original plan was to put up the new headquarters and move employees in, build a retail center, hotel and rehab the aging structures for new uses in order to keep Goodyear and its estimated 3,000 jobs in Akron. But then the financial crisis and recession hit and forced a restructuring of the concept, leading to an infusion this summer of $17.2 million in short-term, publicly financed bonds — money that IRG is to pay back — to jump-start things.
Building the new headquarters will follow the renovations of the already-existing campus that are intended in large part to make them more energy efficient.
The lease deal announced this summer between IRG and Goodyear will keep the company in its current headquarters for upwards of five years. The long-term intent is to keep Goodyear in Akron for decades beyond.
The five-year lease period should buy Lichter and IRG enough flexibility and time for credit markets to improve so IRG can get private financing to proceed, Goodyear spokesman Scott Baughman said. Goodyear and IRG continue to work with each other, he said.
''We certainly continue to be supportive,'' Baughman said. ''Of course, the credit market has continued to keep the pace down as he arranges his financing.''
So IRG now is doing what work it can do to upgrade the Goodyear campus.
''We're doing a bunch of work on the existing buildings,'' Lichter said. ''A lot of the focus is on utilities.''
And also on finding tenants for at least two of the smaller buildings.
''There's nothing absolutely solid to report yet,'' Lichter said. ''I think it's going well. . . . I have reasonably serious interest in some of the space. We think we're doing just fine, considering the state of the economy.''
Struggle for tenants
Finding tenants for any commercial space, particularly in large structures, is a struggle, said Tom Fox, president of the NAI Cummins real-estate firm in Akron that specializes in commercial and industrial properties.
''There's no question Akron is feeling the same problems the rest of the country is experiencing in commercial real-estate activities,'' Fox said.
There are a lot of properties available for lease or purchase, while many potential buyers and tenants are waiting on the sidelines to see if the economy improves, he said.
On the plus side, NAI Cummins has been getting more deals done this month compared to earlier this year, he said. But business throughout the state remains slow, he said.
''Banks are tight with money,'' Fox said.
Most of the local deals now being closed involve space of 30,000 square feet and smaller, he said.
Akron-area real-estate firms are keeping a close eye on Lichter and the Goodyear project, Fox said.
''[IRG and Lichter] continue to be an acquisition force in the area,'' Fox said. ''They are a significant force. . . . He just has a knack for buying large blocks of real estate at depressed prices and finding tenants.''
Lichter said he's not in a position to say who is interested in leasing the space he now has available in the former Goodyear Bank and medical center buildings. Prospective tenants don't like that kind of publicity ahead of time, and his policy is not to disclose names, he said.
But he said he's filling space in the former Hoover campus in North Canton and elsewhere, and expects to be able to do the same thing on the Goodyear site. He says he also continues to seek to buy additional commercial properties in Ohio and elsewhere at distressed prices.
''We tend to be a low-cost provider,'' Lichter said. ''We tend to do fairly well when others are struggling.''
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
The ''Available'' signs have been up for a while at two of developer Stu Lichter's newer acquisitions, former Goodyear-owned buildings in Akron.
Lichter is actively seeking tenants — and says he is getting some interest — for the former Goodyear medical office on Goodyear Boulevard and the now-empty former bank at the corner of Goodyear Hall facing East Market Street.
Work is proceeding, albeit slowly in some cases, on the complicated $900 million Goodyear Riverwalk headquarters and neighborhood revitalization project in East Akron.
Lichter said this week he's pleased with the progress he sees, particularly in the context of the deep recessionary economy.
Lichter's California-based company, Industrial Realty Group, or IRG, now owns much of Goodyear Tire & Rubber Co.'s campus. The tire maker is leasing its global headquarters and other facilities from Lichter.
IRG and Goodyear are continuing negotiations over the building of a new global headquarters on vacant land next to the company's technical center off Martha Avenue, Lichter said.
''We're working diligently,'' he said. ''It's still a tricky environment. . . . I think the new headquarters deal is going to happen and fairly quickly.''
Banks are still reluctant to lend money for these kinds of projects, Lichter said.
Lichter and his company specialize in buying large, aging commercial and industrial properties at low prices. IRG then cleans and fixes up sites and leases out the space. IRG's largest concentration of properties and projects is in Ohio and, besides Goodyear, includes Canal Place in downtown Akron, plus the former Hoover Co. campus in North Canton and the Lockheed Martin campus near the Akron Airdock.
Work is proceeding to rehabilitate and upgrade the Goodyear buildings while they are still occupied, Lichter said.
Forced change of plan
The original plan was to put up the new headquarters and move employees in, build a retail center, hotel and rehab the aging structures for new uses in order to keep Goodyear and its estimated 3,000 jobs in Akron. But then the financial crisis and recession hit and forced a restructuring of the concept, leading to an infusion this summer of $17.2 million in short-term, publicly financed bonds — money that IRG is to pay back — to jump-start things.
Building the new headquarters will follow the renovations of the already-existing campus that are intended in large part to make them more energy efficient.
The lease deal announced this summer between IRG and Goodyear will keep the company in its current headquarters for upwards of five years. The long-term intent is to keep Goodyear in Akron for decades beyond.
The five-year lease period should buy Lichter and IRG enough flexibility and time for credit markets to improve so IRG can get private financing to proceed, Goodyear spokesman Scott Baughman said. Goodyear and IRG continue to work with each other, he said.
''We certainly continue to be supportive,'' Baughman said. ''Of course, the credit market has continued to keep the pace down as he arranges his financing.''
So IRG now is doing what work it can do to upgrade the Goodyear campus.
''We're doing a bunch of work on the existing buildings,'' Lichter said. ''A lot of the focus is on utilities.''
And also on finding tenants for at least two of the smaller buildings.
''There's nothing absolutely solid to report yet,'' Lichter said. ''I think it's going well. . . . I have reasonably serious interest in some of the space. We think we're doing just fine, considering the state of the economy.''
Struggle for tenants
Finding tenants for any commercial space, particularly in large structures, is a struggle, said Tom Fox, president of the NAI Cummins real-estate firm in Akron that specializes in commercial and industrial properties.
''There's no question Akron is feeling the same problems the rest of the country is experiencing in commercial real-estate activities,'' Fox said.
There are a lot of properties available for lease or purchase, while many potential buyers and tenants are waiting on the sidelines to see if the economy improves, he said.
On the plus side, NAI Cummins has been getting more deals done this month compared to earlier this year, he said. But business throughout the state remains slow, he said.
''Banks are tight with money,'' Fox said.
Most of the local deals now being closed involve space of 30,000 square feet and smaller, he said.
Akron-area real-estate firms are keeping a close eye on Lichter and the Goodyear project, Fox said.
''[IRG and Lichter] continue to be an acquisition force in the area,'' Fox said. ''They are a significant force. . . . He just has a knack for buying large blocks of real estate at depressed prices and finding tenants.''
Lichter said he's not in a position to say who is interested in leasing the space he now has available in the former Goodyear Bank and medical center buildings. Prospective tenants don't like that kind of publicity ahead of time, and his policy is not to disclose names, he said.
But he said he's filling space in the former Hoover campus in North Canton and elsewhere, and expects to be able to do the same thing on the Goodyear site. He says he also continues to seek to buy additional commercial properties in Ohio and elsewhere at distressed prices.
''We tend to be a low-cost provider,'' Lichter said. ''We tend to do fairly well when others are struggling.''
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
Comments
Click here to post your comments
akron, oh
Posted 09:24 AM, 11/08/2009
Thanks ABJ, for reminding us of that economic developement albatross.
Akron's taxpayers would invest more into this, but we just promised to spend $500 million, at the Federal EPA's request, on another project..
Orrville, Oh
Posted 05:12 PM, 11/08/2009
Lichter; cannot afford any tenants; victims; of every corporation, farmer, business, outsourcer sweatshop, and nonprofit, tax-exempt, organization and Church; refusing; to market the cost; in the wholesale and retail price of his or her product and service; Of tenants paying rent; and every workers, consumers, and taxpayers living (including pension and health care); enabling parents to love, nurse, nurture, discipline, protect, and provide for every child (job) they conceive; and fund schools, infrastructure, national security, government services, and etc.; with money derived from wages or independent business profit!
