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Thursday, December 20, 2007

Downtown Office Trends

QCS II will pour 825,000 square-feet of new Class A office space into the Downtown office market. That's great only if the market can handle it, and some think that the relocation of one company Downtown (AFG) into it isn't necessarily the best scenario. Well to some extent they're right, but the whole issue isn't a negative thing either.

AFG currently occupies office space in a variety of older office buildings Downtown (580 Building, 525 Vine), and will be occupying 22 floors of QCS II for a total of 530,000 square-feet. By leaving these spaces and consolidating into one newer space it allows for those older and thus more affordable spaces to be freed up for smaller companies that can not afford the leases at a building like QCS II.

It is essentially all part of a larger office market cycle that occurs. Older spaces become less desirable and are either replaced by newer spaces and taken off the market (via apartment conversions and what not) or are then filled by smaller companies that can not afford the Class A office space.

So while it isn't great news to hear that QCS II won't be filled by a new company to the certainly isn't bad news that the Downtown market is able to fill another 800,000+ square-feet of office space. On a side note, the most recent State of Downtown quarterly report says that Downtown Cincinnati actually lowered its vacancy rate by nearly 3% in the 3Q.


Anonymous said...

This is great news!!!

Hawse said...

i was under the impression that this will be a consolidation of offices... i think that the enquirer article said that not all of their current offices are down town and this will add jobs to the region and to downtown.

Randy Simes said...

Brad, you are correct...but the vast majority of their presence is Downtown already. That presence is mainly within the 580 Building and 525 Vine. Those buildings will be left with a void to fill once Great American leaves for QCS II.

It's great that those buildings have 3 years to line up tenants, and my point was that it is actually a good thing for the office market to recycle these spaces overtime like this.

Anonymous said...

I've seen different numbers given with respect to the height of this building. Initially I read almost 690', but apparently it has been scaled back to 660'...? I'm confused...wasn't there a recent report stating it would actually be increased in height?

Randy Simes said...

^Anonymous, there have been a lot of rumors about this project...especially over the past 6 months or so. But I would say to go with what the latest information is. That information is stating 660' with a total of 825,000 square-feet of office space.

Obviously this 660' could change somewhat due to architectural modifications that may happen to accommodate the needs and/or wants of potential tenants, but I wouldn't expect it to venture to far from this 660' range.

Anonymous said...

I agree with the cycle of offices spaces available. This will allow companies that can't afford spaces in some of the other buildings. If most of those spaces become filled in time that's that many new people\jobs downtown, which is great!
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