Office-to-Residential Conversion

Showcasing Newmark’s Adaptive-Reuse Expertise in the CBD

Newmark’s Cleveland office advised the owner of 700 Prospect Avenue, the former national headquarters of the United Church of Christ, on the disposition of a 9‑story historic office asset in the heart of the Gateway District. The 134,517 square foot building, ultimately traded to KD Prospect LLC, an affiliate of K&D Group, for $4,500,000, or $33.45/SF, on May 31, 2022.

Challenge: Monetizing a Functionally Obsolete Downtown Headquarters

By 2021, UCC’s evolving workplace strategy and a softening downtown office market created pressure to monetize a large, single‑tenant headquarters that no longer matched its operational needs. The property combined a full‑floor single‑tenant office layout, landmarked architecture, and deferred capital needs, making a traditional office buyer pool limited while placing a premium on buyers with adaptive‑reuse expertise.

Strategy: Position the Asset as a Tax-Credit-Enabled Conversion Play

Newmark repositioned 700 Prospect as an “Owner/User or Historic Redevelopment Opportunity,” explicitly highlighting its suitability for residential or hotel conversion. Marketing materials emphasized the building’s National Register of Historic Places status, Opportunity Zone location, and the availability of federal and state historic tax credits, new markets tax credits, conservation easement potential, and residential tax abatement, all of which are critical components in underwriting a major adaptive‑reuse project.

Newmark’s team leveraged the property’s Gateway District location—walkable to East 4th Street, Rocket Mortgage FieldHouse, Progressive Field, and Playhouse Square—to frame a compelling live‑work‑play narrative for residential developers seeking infill opportunities in downtown Cleveland. Detailed stacking plans and typical floorplates were used to demonstrate efficient residential layouts and vertical circulation, reducing perceived execution risk for prospective converters.

Execution: Targeting Experienced Adaptive-Reuse Capital

Through a targeted marketing process, Newmark focused on buyers with a track record in downtown Cleveland conversions and the ability to utilize the full incentive stack. KD Prospect LLC, an affiliate of K&D Group, emerged as the ideal buyer, bringing deep experience in large‑scale downtown adaptive reuse and mixed‑use repositionings. Newmark’s sellers’ representatives, Terry Coyne and Richard Sheehan, negotiated a transaction that aligned pricing with the capital‑intensive nature of the conversion while providing UCC with a clean exit and certainty of execution.

Result: Enabling “The Electric Building” Residential Conversion

Post‑sale, K&D launched a comprehensive plan to convert the former HQ into approximately 120 apartments, predominantly studio and one‑bedroom units, branded as “The Electric Building.” The redevelopment leverages Brownfield remediation funding, state historic tax credits, and federal incentives to support a conversion budget in the tens of millions of dollars, transforming the asset from obsolete office space into modern residential with activated ground‑floor retail.

Interior demolition and abatement have cleared the structure back to its shell, and construction is underway with initial occupancy targeted for the mid‑2020s. The project will add much‑needed downtown housing, strengthen the Gateway District’s residential base, and activate a key Prospect Avenue frontage, illustrating how Newmark’s advisory work helped catalyze a high‑impact adaptive‑reuse investment in Cleveland’s core.

Proof Point: Newmark as a Catalyst for Office Obsolescence Solutions

700 Prospect Avenue demonstrates Newmark’s ability to solve for functional obsolescence by aligning client objectives, market realities, and incentive‑driven capital. By reframing a single‑tenant headquarters as a tax‑credit‑enabled redevelopment and targeting experienced converters like K&D, Newmark helped deliver a successful disposition for UCC while enabling a transformative residential project that supports downtown Cleveland’s ongoing evolution.