The owner of Tri-County's Executive Plaza buildings hails from South Carolina. Downtown's Textile building had a California buyer. Turfway Ridge office park's investor calls New York City home.
In May 2005, a New York investment firm paid top dollar for downtown Dayton's Kettering Tower, a building developed and owned for 35 years by the Kettering family. The building sold for $23 million, $1 million above the asking price, because of fierce competition from 13 other interested parties. Only one of those was a local investor.
Five years ago, a building for sale in Greater Cincinnati or Dayton was likely to fetch a buyer from within Ohio. But today, more than 80 percent of buyers in the area are coming from outside the state and around the country.
In Greater Cincinnati, an out-of-town firm could fetch an 8.3 percent cap rate (if paying cash, the return on investment the company assumes it will get within the first year). In New York, office buildings are fetching on average just a 5.8 percent return.
"We have liquidity here that has never existed before," said Keith Yearout, an investment associate with CB Richard Ellis.
Brokers attribute the growing investment real estate market to the historically low interest rates and the stock market bust in 2000, which created more faith in real estate investment than stock.
But what's causing interest in Cincinnati and many other areas of the Midwest is the competition on the coasts and in big cities that has driven real estate values to unprecedented highs and cap rates to historic lows.
"Every major institution, foreign investor, REIT, TIC Fund and larger private investor has gravitated to the primary markets," said Steve Timmel, of Grubb & Ellis West Shell Commercial's investment group. "That has driven out investors who no longer want to accept the lower yields. And it's turned traditional buy-and-hold investors into sellers."
And rather than sell a building in New York for a premium and reinvest in the same market with a low return, investors are looking to modest markets with lots of low-priced real estate and higher cap rates.
Hello, Cincinnati.
CB Richard Ellis completed 18 office transactions in the past year-and-a-half for 18 out-of-town buyers, all but two of whom were new to the market. Timmel said 74 percent of his company's buyers since 2000 have come from outside of Cincinnati, and 65 percent were first-time buyers in the market.
And they are not one-time buyers.
"They are seeking to establish a foothold in the marketplace," Timmel said.
As the economy becomes more global and more capital becomes available, they expect to be doing business with international clients in Cincinnati before long.
"The investment world has completely been turned on its head," Yearout said. "We don't know where the next buyer will come from."
An example is Matt Sharp, principal of New York-based Milton Point Investments, who has in the past 18 months purchased two properties in Northern Kentucky.
His company is selling all of its Northeast property and reinvesting 100 percent of the proceeds in the Midwest. By next year, he expects to have $100 million worth of property in Cincinnati and Columbus alone.
"We don't even look at assets in the Northeast any more," he said. "It just doesn't make sense."
Sharp put the Turfway Ridge park on the market last week and is listing it with Jones Lang LaSalle out of New York City. He's listing without an asking price and marketing it nationally and internationally because he feels it will have a higher price tag and be attractive worldwide.
The key for his company has been to learn about the "sleepy" Midwest and delve into the success of submarkets, like Mason and Northern Kentucky, and the revitalization of downtown.
"Population and employment growth (in these communities) are far outpacing most of the Western and East Coast markets," Sharp said. "We have all the growth here, more stability and we're buying this at an 8 percent cap rather than a 6 percent cap, an exponential difference."
The question is, how long can this last?
Even as major markets balance out, real estate in the Midwest will continue to be an attractive investment, said Robert Bach, senior vice president of research and client services for Chicago-based Grubb & Ellis.
Prices will have to rise in response to so much activity, but it's unlikely that out-of-town companies will ever be priced out of the Greater Cincinnati market.
"There will be ups and downs, but my sense is that real estate, because of the amount of capital chasing it on a global basis, is in a different asset class than it was in the past," Bach said. "It's never going to be a hot spot like the West or East, but it's stable and secure, and that's what real estate has always been like in the past.
"No major declines, not major upsides either."