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News release


Revitalization on the Cincinnati Skyline Attracts Investor & Tenant Interest

JLL releases its 2015 building-by-building Skyline report on Cincinnati’s commercial real estate market

CINCINNATI, June 3, 2015 – There’s no space like Trophy space. Cincinnati’s premier office towers—by far—boast the most expensive office space to rent, according to JLL’s 2015 Digital Skyline. The average asking rent for Trophy space during the first quarter reached $37.18 per square foot, as compared to $21.45 for non-trophy space.

“High-quality trophy assets are becoming more and more difficult to find nationwide,” said Cody Brooks, Research Analyst at JLL. “Trophy assets in Cincinnati include the Great American Tower and 303 Broadway, together which comprise the Great American Tower at Queen City Square. These properties average roughly $16.00 more per square foot than non-Trophy space.”

Looking ahead, Cincinnati tenants can expect little relief in rental rates in the near future. Increasing levels of leasing activity and rising interest in Cincinnati’s urban core will likely promote stable rent growth.

JLL’s proprietary 2015 Digital Skyline identifies and tracks micro-segments of 47 city centers across North America. The Skyline features Trophy and Class A buildings where tenants and investors alike focus demand for office space in the highest-quality and most efficient assets.

Foreign investors show increased interest in the U.S. skyline

Foreign capital is playing a starring role in commercial real estate transactions across the U.S. Of the $35.3 billion transacted over the past five quarters nationally, 34.6 percent was driven by international buyers. In Houston and Seattle, every office deal transacted during this time period had a foreign buyer, while in Washington, D.C., Boston and New York, offshore capital led more than 50 percent of office purchases.

On the Cincinnati Skyline, foreign investors have not been active in recent years. However, sales activity has been lively from a domestic standpoint.

“The vast majority of buyers, both for skyline and non-skyline assets, have been on the national and local level,” said Brooks. “As the level of national buyers increase, we may expect to see an uptick in activity from foreign investors who also want to stake their claim in the Cincinnati market.”

During the first quarter of 2015, 312 Elm and 312 Plum were purchased from U.S. based investors. The skyline assets were valued at $66.2 million, or $109 per square foot. 
Tenants and investors look to lower-class assets for customizable space

As investors begin to diversify beyond the Trophies for investment opportunities, a growing segment of tenants are also turning away from skyline buildings in favor of non-core Class A and Class B buildings. The perception of an “address” has been replaced by the desire for highly customized office space, particularly among fast growing tech and other creative companies.

But, it’s not just tech companies looking for dynamic, flexible office space. The growing millennial workforce and their employers are increasingly drawn to architecturally significant Class B buildings located in dense neighborhoods packed with amenities.

The Cincinnati skyline does not have a large presence of Class B space. Unlike the national trend, local tenants are opting for more modern and newer space compelled by improving economic conditions.

“Class B vacancy momentarily fell below Class A vacancy in the years following the recession as cautious tenants were weary to commit to more costly space,” said Brooks. “But as those leases begin to expire and fundamentals once again fall into alignment, corrections in the market now portray Class A vacancy nearly six percent lower than in Class B assets.”

Brooks added, “There has also been a rise in the number of completed and proposed office-to-multifamily conversions. Over 500,000 square feet of office space has been converted to multifamily use in the past decade.”

Visit the full Cincinnati Skyline for more.

About the Skyline Review
For the first time, investors and tenants alike can now access JLL’s Skyline Review via a digital platform. The fully interactive website will feature JLL’s proprietary market insights regarding office supply, demand, rents, leverage and investment in 47 markets across the United States and Canada, with the ability to compare and contrast individual markets or multiple markets. In addition, the site will offer videos and infographics. All information will also be available via mobile access. Users can also directly access information about Cincinnati’s Skyline.

About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000.  On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $55.3 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit