Colliers International: Cleveland’s thriving downtown the key to leasing The Arcade

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by Dan Rafter

Downtown Cleveland is booming today. And The Arcade retail center is in the exact heart of the city’s CBD.

To Chris Seelig, first vice president and principal with the Cleveland office of Colliers International, that prime location is The Arcade’s top selling point.

“This really is dead center in the middle of all the activity in downtown Cleveland,” Seelig said. “We really believe that this building really is right at Main and Main.”

Colliers International recently took over leasing duties at The Arcade. The goal now is to bring more retailers and other users to the Cleveland landmark.

The Arcade has plenty of positive attributes. The center is home to the Hyatt Regency Cleveland and a mix of dining, retail and service businesses. It’s also a stunning complex visually, made up of a pair of nine-story towers.

It has history behind it, too. The Arcade is one of the country’s first indoor shopping malls, and it’s the first building in Cleveland to earn a place on the National Register of Historic Places. Seelig along with his partner Ryan Fisher, a vice president with Colliers’ Cleveland office, are leading the leasing efforts here, working along with the mall’s ownership group, Skyline International Development of Toronto.

Fisher said that he expects this effort to be a successful one.

“The Arcade has some great name recognition,” Fisher said. “The location is hard to beat with what is going on in the CBD of Cleveland. There’s a great story to tell in Cleveland today. The cliche’ is that real estate is all about location. In this case, the cliche’ is actually true.”

Challenges

That doesn’t mean that leasing up The Arcade is going to be a simple task. Seelig and Fisher say that the property does come with challenges.

Seelig said that the interior spaces available for lease inside The Arcade are small, and because the property is an historic building, tenants are limited when it comes to the size of the signs they can hang outside their stores.

The Arcade is also an interior mall in which many of its interior spaces do not front the street. Because of this, retailers will want to see a significant mass of tenants inside the mall to attract enough shoppers to boost their own odds of success.

Some of these negatives might turn away retailers and possible tenants, especially brand-name national ones, Seelig said. But that still leaves the Colliers team with plenty of options when it comes to attracting tenants to The Arcade, he said.

“The key is to not focus on any type of tenants that require or have strict branding guidelines,” Seelig said. “That would mostly be national tenants. I don’t think national tenants are the right tenants for this building. They would have the most problems with those restrictions on signage and with those smaller spaces.”

Those tenants who do lease space in The Arcade will benefit from the increased foot traffic in downtown Cleveland today. Both Fisher and Seelig say that the city’s CBD has become a popular destination among buyers looking for the urban experience, the opportunity to ditch their cars and rely on public transportation and their own feet to get to restaurants, shops, entertainment, libraries and parks.

Fisher said that the growing number of residential properties in downtown Cleveland — multi-family buildings — is fueling the boom in the CBD. Several outdated Class-C and Class-B office buildings in the heart of the city are being converted to apartment complexes. And that is making the area more attractive to retailers, restaurants and service businesses.

“There is not enough multi-family buildings at this point to meet the demand in the CBD,” Fisher said. “As soon as units come online, they are snapped up. When you have all those people moving in, you need retail, restaurants and service businesses. Retail had been a tough proposition for the last couple of years. That is changing now. In downtown Cleveland, retailers now have everything they need. That is a big plus.”

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