CLEVELAND — Thousands of people used to come to work every day at the Rose Building on East Ninth Street in the heart of Downtown.
Now, the landmark office complex is sitting empty – ready for reinvention. A local development group plans to start construction this year on a roughly $120 million project, filling the building and its annex with apartments and a hotel.
It’s the latest in a long line of office conversions remaking Downtown – and bringing Cleveland national attention.
A city that’s so often the butt of jokes, a frontrunner on undesirable top 10 lists, is a pioneer when it comes to turning old office space into new things. Now that skill, born out of necessity many years ago, is something other places are trying to figure out in the wake of a pandemic that hollowed out downtowns and changed the way many people work.
In May, the International Downtown Association will hold its yearly spring gathering in Cleveland. A discussion about – and a tour of – office conversions is on the agenda.
“The construction expertise that is needed to convert buildings is tremendous,” said Bhavin “B” Patel, the developer leading the Rose Building project. “Design is local here. We have a deep talent pool. And the incentives that are needed, because there’s such a gap. … Working with the city and the county and the state – and then working together to bring it to fruition is key. And a lot of that expertise resides right here.”
As of late 2024, Cleveland had a higher share of its office space earmarked for new uses than any other major city in America, according to research from the CBRE real estate brokerage. The company tallied 3.8 million square feet of projects that are underway or on the drawing board here – most of them Downtown.
That’s more than three Key Tower’s worth of space.
'Such a bright spot'
“I like to say we were good at conversions before it became cool,” Ryan Sommers, a local financing consultant, told CBRE’s senior economic advisor during a podcast last fall.
“We had to rock and roll with conversions before the pandemic forced the rest of the country to do that,” Sommers added.
That’s because Cleveland had so many underused buildings for so long, from aging warehouses to one-time department stores on Euclid Avenue. The Great Recession of 2007 to 2009 dealt the city another blow, hollowing out the financial district between East Ninth and East 12th streets and putting mid-century office buildings in play.
Local architects and developers responded by getting creative, coming up with ways to transform vacancies into apartments, hotels and the occasional condominium.
In 2007, the state created an accelerant – a historic tax-credit program to help pay for challenging preservation projects. So far, the Ohio Department of Development has awarded credits to almost 140 projects in Cleveland, many of them Downtown.
“There is such a bright spot here in Cleveland for the work that is being done,” said Lydia Mihalik, the state’s development director, during a recent interview. “Whether that is working on renovating new places for people to live, new places for people to work, new places for people to shop. … You can’t walk around Cleveland without seeing a building that we have been involved in.”
'A once in a generation opportunity'
The Rose Building redevelopment won $5 million in competitive state tax credits in December.
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Patel said the project will also involve federal historic preservation tax credits. And he’s talking to city and county officials about local incentives to help finance the deal.
Patel’s company, Spark GHC, is tackling the project with Cleveland Construction, a contractor that has worked on other large conversion projects Downtown.
Last year, a Spark GHC affiliate bought the 10-story Rose Building and its six-story annex, the Sloan Building, for just under $11 million, according to public records. The seller was Medical Mutual of Ohio, an insurer that had its headquarters there for 75 years.
Before the pandemic, Medical Mutual made major investments in the property, from maintaining the ornate façade to upgrading the heating and cooling systems.
“I have walked close to a thousand buildings in my career, and I have never seen a building like this, in its sheer condition,” Patel said. “It is just remarkable.”
The company seemed committed to staying put at East Ninth and Prospect Avenue.
But COVID-19 changed everything.
After a swing to remote work, Medical Mutual announced in late 2022 that it would leave Downtown and consolidate its office space in the suburbs.
A dry-erase board in the old corporate cafeteria’s kitchen memorializes that move. “Final Friday 8-26-22,” it reads. “It was nice while it lasted,” a food-service worker wrote.
Now, the complex is being reimagined as 154 apartments and a 123-room Marriott Tribute hotel. The apartments will carry the Marriott brand, giving tenants access to hotel services and the ability to earn points through Marriott’s Bonvoy loyalty program.
The average nightly rate for a hotel room is likely to be $220 to $250, Patel said.
The apartments – a mix of studios and one- and two-bedroom units – could rent for $1,150 to $4,000. The goal is to open everything, including a large restaurant at the corner of Ninth and Prospect, sometime in 2027.
“The market is improving,” Patel said. “More people want to be Downtown. And I think it's a once in a generation opportunity for developers and the city to repurpose a lot of these buildings.”
'A real wave of interest in Downtown residential'
A few blocks away, 84 apartments are about to debut at the historic Bulkley Building in Downtown’s theater district.
The nine-story building is still home to office tenants, including the headquarters of Playhouse Square, the nonprofit steward of the theaters and a major landlord in the area.
“It’s worth all the dust and noise,” Craig Hassall, Playhouse Square’s president and CEO, said during a recent tour of the near-finished construction project. “And we work right downstairs. So we’re glad it’s finished – but the end result is really good.”
The soft office market gave Playhouse Square an opportunity to rethink four floors at the property. Now, the hallways lead to studios and one- and two-bedroom apartments with high ceilings, large windows and roomy closets. Rents are $920 to about $2,300 a month.
Playhouse Square is reserving 18 to 20 apartments for the cast and crew of traveling shows – a competitive advantage for the theater district. The rest are broadly available, with move-ins starting this month. Hassall is confident they’ll fill up fast.
“There’s a real wave of interest in Downtown residential,” he said, noting that recent figures from nonprofit advocacy group Downtown Cleveland Inc. show that the center city’s population has climbed to about 21,000 residents.
“Living and working here, it’s great,” said Hassall, who moved to Cleveland from the United Kingdom in early 2023 and initially lived in Playhouse Square’s Lumen apartments on Euclid Avenue. “You can begin your day in the café downstairs. Go to work. Come back. Have a drink in the bar downstairs. Go and see a show. End up in Parnell’s – I mean, you shouldn’t drink that much, I suppose. But it’s a great life.”
'So many communities are trying to figure this out'
Last summer, Rob Nosse walked down Euclid Avenue to get a firsthand look at how Cleveland has reimagined obsolete office buildings. The state representative from Oregon grew up in Akron and was back in town to visit relatives in the region.
“It looks very different. A lot better,” he said of Downtown.
Nosse is one of the people who have reached out to Downtown Cleveland Inc. over the last few years to find out what it takes to repurpose old office buildings.
On a Tuesday afternoon, he met Michael Deemer, Downtown Cleveland’s president and CEO, at the 5th Street Arcades. At one point, Deemer glanced at his phone to see an email from someone in Boston who had similar questions about conversions.
“We are really looked to as a leader, where so many communities are trying to figure this out, coming out of the pandemic, for the first time,” Deemer said.
He stressed that Cleveland isn’t giving up on its office market. The city relies heavily on income taxes, and residents and visitors aren’t enough to keep restaurants and retailers alive. But Downtown, like its counterparts across the country, has to keep evolving.
The office vacancy rate in the central business district was 19.5% at the end of last year, according to the most recent research from CBRE. That doesn’t include government buildings or properties that are sitting empty but earmarked for redevelopment.
And that figure just shows how much space is leased – not occupied by employees. Downtown Cleveland Inc. estimates that the center-city workforce is at about 59% of pre-pandemic levels based on cell phone data and badge swipes at buildings.
Nosse said his adopted hometown of Portland, Oregon, faces the same challenges.
“We had a really amazing downtown restaurant culture and retail culture that has really struggled to come back since the pandemic,” he said.
Office workers are back, Nosse said, but not like they used to be. And housing is expensive.
“To the extent that we can figure out how to do what Cleveland is doing and convert some of our Downtown office space into that first-time rental for a college student who is just getting their start in a shoe-designing career – that’s a big thing that’s in our area – I’m interested in that,” Nosse said.
'We've taken a lot of lumps'
Of course, you can’t turn every empty office building into apartments.
“It’s difficult to do this with most buildings,” Patel said. “There are so many unique attributes that have to come together for a project like this to be feasible.”
But thanks to conversion-friendly zoning and creative thinking about building codes, architects in Cleveland have found ways to tackle some unlikely candidates – buildings that developers and designers in other cities might not have given a second glance.
There’s the May Co. building, a massive former department store and one-time office property that fills most of a city block. It reopened in 2020 as just over 300 apartments, with a dramatic atrium carved out of the center to let light into living rooms and bedrooms.
There are glassy high-rises, from the Residences at 1717 at East Ninth and Superior Avenue to Erieview Tower, a 1960s skyscraper that’s morphing into apartments and a hotel.
RELATED: A transformation is under way at one of Downtown Cleveland's tallest buildings
And there’s the Bell, the recent residential makeover of an early 1980s building – 367 apartments in the former corporate headquarters of the Ohio Bell Telephone Co.
The Rose Building is much older — a more traditional office conversion project.
The arrowhead-shaped building opened in 1900 as the brainchild of Benjamin Rose, a businessman and philanthropist who moved to Ohio from England as a child.
Now Patel, who was born in India, is leading the push to reimagine the property – one immigrant entrepreneur preserving another’s legacy.
“It will live on for another 100 years,” he said, adding that Rose’s can-do story was part of what drew him to the corner.
“I think it’s a Cleveland story, right?” he said. “We’ve taken a lot of lumps over the years. But, you know, we always come back.”
