Columbia Property Trust, Inc. has completed the sale of Cleveland’s iconic Key Center—a 1.3 million-square-foot, Class-A office tower—and the adjacent Marriott Hotel to Cleveland-based multi-family property development firm Millennia Housing Development Ltd. for a gross sales price of $267.5 million.
With this sale and exit of Cleveland, as well as its exit of the Houston market earlier this month, Columbia has completed $1.2 billion of dispositions since January 2016 and $3.3 billion since January 2012, taking advantage of favorable market conditions. Columbia will use proceeds from these sales for reinvestment in its target markets.
Key Center is an integrated, mixed-use complex that comprises a 57-story office tower, 400-room Marriott Hotel, and parking structure. Constructed in 1991, the multi-tenanted tower houses the headquarters of both the property’s namesake tenant, Key Bank, and law firm BakerHostetler. As of December 31, 2016, the office tower at Key Center was 82 percent leased.
“Key Center is the most recognizable icon on the Cleveland skyline, and we were determined to take a patient approach in order to identify the right buyer for this significant asset,” said Nelson Mills, president and chief executive officer of Columbia Property Trust. “Our diligence has now been rewarded, allowing us to exit the Cleveland market at a price within our expectations and accelerate our focus on high-barrier markets.
“Our planned disposition program is now complete,” noted Mills. “With $3.3 billion of assets sold in suburban and secondary markets since early 2012 and another $2.6 billion of acquisitions in markets such as New York and San Francisco, we now possess a truly remarkable high-barrier office portfolio.”