Beachwood Real Estate Reaches Transitional Phase By June Scharf A ddressing a need to rejuvenate and revitalize 37-yearold Commerce Park. Examining pressure and change coming to LaPlace and Beachwood Place, both General Growth-owned properties. Meeting pent-up demand for new apartments. These are some of the issues explored at the June Beachwood Chamber of Commerce luncheon held at The Vue, a new NRP Group apartment development at the corner of Chagrin Boulevard and Green Road. A roundtable discussion, moderated by James Doutt, Beachwood’s economic development director, featured Rob Clarke, senior general manager of Beachwood Place; David Heller, co-founder and principal of The NRP Group; and Jeffrey Kahn, president of NAI Daus and a 50-year Beachwood resident. In a revealing examination of Commerce Park, a commercial hub comprised one-third of offices and two-thirds warehouses, Kahn believes that lots will need to be consolidated and buildings torn down to eliminate the obsolescence of those with insufficient parking space. Sale prices are going up for commercial properties, largely as a function of low interest rates, hovering around 3 to 4 percent. The most recent sale of a property here was with 23920 Mercantile in the fourth quarter of 2014, which grossed a rate of $90 per square foot, a staggering number, says Kahn. The buyer wanted to expand and waited years for the right opportunity. This speaks to the level of interest that existing businesses have in remaining here. When Commerce Park buildings 1, 2 and 3 came down, many of the companies found new space in other Beachwood buildings, according to Kahn. Beachwood’s office rent prices have remained stable, with class-c space, often in 3-story buildings, going for $15 to $17 per square foot. Science Park rates are in the $20 to $22 per square foot range. Kahn expects that new generation buildings with modern features will lease in the $30 to $32 range. New development is still possible on empty lots located on both sides of Chagrin Bouleard’s Signature Square 1 and 2 buildings, on Chagrin Highlands, and on Hotel Drive, where developer Dino Palmieri owns empty lots. Speaking about the 46,000square-foot Beachwood Place expansion, Clarke reports that final lease negotiations with tenants are occurring, although he cannot yet reveal who they are. But he did let it drop that a Tommy Bahama store will be ar- riving on those concrete shores. He admits that the 18-month project will pose challenges, particularly because that time span will cover one Christmas shopping season. A rendering shows that the new stores will have exterior entrances like those at neighboring Legacy Village. They will be located on the west side of the mall, between Saks Fifth Avenue and Nordstrom. With respect to General Growth Properties’ recent acquisition of LaPlace, Clarke says that replacement tenants for the spaces once filled by Borders Book Store, Sushi Rock and Peet’s Coffee and Tea are being negotiated. He assures everyone that due to very high demand, another coffee shop will replace Peet’s. “If our leasing agent can’t get the job done, then I will personally sign up that tenant,” says Clarke. Regarding The Vue, which opened this year with 348 units, Heller says that NRP selected Beachwood as the apartment’s site due to the developmental dearth here over the past 19 years for this type of structure. “Our studies indicated that there was pent-up demand,” Heller explains, adding that The Vue’s demographics include young professionals and also “offers current Beachwood residents an option for their next stage of living” if they want to stay in this community, which many often do. Also, its location is ideal for those interested in being close to highways, businesses and medical facilities. Some features of which Heller is proud include a 2-story workout facility, private garages within the underground parking garage, concierge services, dog and car wash facilities, and resident lounges located on the third and fourth floors with attached patios overlooking the pool courtyard or a golf course across the street. There are open spaces throughout the complex, in addition to an art gallery, adorned with local artists’ works, which rotates in and out every few months. Above: The Vue Left: Beachwood Place Expansion ... due to very high demand, another coffee shop will replace Peet’s. “If our leasing agent can’t get the job done, then I will personally sign up that tenant,” says Clarke. 14 Beachwood Buzz n August 2015