What could the Cuyahoga County-owned Medical Mart in downtown Cleveland fetch on open

CLEVELAND, Ohio — The Cuyahoga County-owned Global Center for Health Innovation has struggled since its opening in 2014 to find a purpose that will make it profitable.

Now there is talk of investing tens of millions more dollars. Despite the financial troubles with the facility, county officials have given no indication that it wants to cut its losses and sell the 235,000 square-foot facility on St. Clair Avenue, which it considers inextricably intertwined with the connected Huntington Convention Center.

But what would it be worth if they did list it? Even if county officials leaned that way, those who work in the local real estate market said selling it would prove incredibly difficult.

“There wouldn’t be demand for that type of space and it would be cost prohibitive,” said Nate Kelly, president and managing director of the CRESCO/Cushman & Wakefield real estate brokerage firm in Cleveland. “It is an A-plus, beautiful property that would be so cost prohibitive to retrofit for a reasonable private use that I wouldn’t even consider it.”

To get an idea of the potential market value, and The Plain Dealer asked three people active in Cleveland real estate, including Kelly, what they thought the county could get for it. The building and the convention center were appraised by the county last year for a combined $425 million, a number that has remained the same since 2014.

All three approached the question as if the building would be used for office space – a tough prospect in the current market given the effects of the coronavirus pandemic and a downtown Cleveland where office buildings are being converted into apartment complexes – and commercial space. Just one was willing to offer an estimate.

Doug Price of the Willoughby-based K&D Group, one of the largest landlords in downtown Cleveland, said his gut feeling was that it could sell for $35 to $50 a square foot, or $8.2 million to $11.8 million. But that is contingent on a lot of factors, namely having a marquee tenant lined up. It would also require a lot of renovations, which would likely far exceed the price he proposed.

“You would really have to have a prime tenant in hand that you knew wanted to take, say, half the building or a big chunk of space, or else you would never get a loan,” Price said.

Others were more reluctant to put a firm number on it.

“If it wasn’t connected and interlinked with the below convention center, I could come up with a per-square foot amount,” said Conor Coakley, a first vice president with the CBRE Group brokerage firm’s office in Cleveland.

The question of the facility’s hypothetical sale price was posed as the future of it is again up for discussion.

The officials who run the facility – better known as the Medical Mart, its original name – have been unable to retain large tenants.

Now, the county’s Convention Facilities Development Corp. is saying a $46 million overhaul could turn it into a true extension of the convention center. Its argument is that better aligning the two facilities will help fill a void in meeting space that will cause the region to lose lucrative events.

If officials approved all the money, it would amount to another large infusion of cash into a facility that, so far, has not yielded the benefits promised when it was proposed more than a decade ago.

Not for sale

Despite talks of more public money, the county has not given any indication that it is open to selling the property. Jeff Appelbaum, the attorney for the development corporation, said that many systems are shared and intertwined with the convention center.

“You can’t separate out the systems,” he said. “You could not sell the building and (if you did) it would fetch zero on the open market because you can’t provide the things the buyer would need.”

Several who were interviewed largely agreed.

Kelly, who worked at the county while the Medical Mart was being built, said he thought a better use was what was being proposed: a further expansion of the convention center. More meetings mean more “eyeballs on Cleveland,” which makes it easier to get people to invest, he averred.

Price called the connections to the larger complex a “detraction.”

Then there is the issue of how much it would likely cost to renovate the interior to create additional office space. At this point, most of the building is common space, meaning it is not set up in a way to accommodate multiple tenants.

“It just isn’t made to be used as a traditional office space,” said Kelly, who worked in two county administrations. He added that common spaces are paid for by tenants.

“That building has so much common area that it would be impractical to have a tenant or user to have all the common area and office space,” he said. “It just wasn’t designed that way.”

And that is saying nothing about one of the biggest headaches for many downtown workers: parking. Coakley noted the lack of an underground parking lot, which is a “big driver” for Class A – the highest quality – office space. The convention center complex is connected to a county-owned parking garage, but the Global Center building does not have one for itself.

“You’re not achieving top of market rents without some kind of parking solution or plan,” he said.

Read More: What could the Cuyahoga County-owned Medical Mart in downtown Cleveland fetch on open