Stratacache has bought yet another building – with the newest property pegged as the future head office for the digital signage solutions company.
The building is the tallest in Dayton, Ohio – where CEO Chris Riegel lives and has aggressively been expanding the core company and a succession of acquired software and hardware that fall under the “group of companies.”
The circa 1970 building has 30 floors, and I assume any number of tenants under ongoing leases. Stratacache has about 250 people in Dayton, many working in technical and assembly environments in other buildings outside of downtown. So it will be a long while before Riegel would need to start ending leases, unless some people get their own floors.
The Dayton Daily News says the real estate arm of Stratacache paid $13 million for the building. I know absolutely nothing about commercial real estate, but would imagine $13 million gets you a lot more in Dayton than New York, or San Francisco, or a lot of other cities.
A very quick look reveals you’d need twice that – $26 million – to buy an aging 4 storey office block on 55th Street in midtown Manhattan.
The Kettering Tower is billed as the premier office address in the city. It LOOKS like more than 25% of the 500,000 or so leasable space is available.
It is the latest real estate buy in what has been a string of them. It was just a couple a few weeks back that Riegel bought another large downtown office block, for $1.67 million. That kinda sorta seemed like the likely new home for Stratacache, which currently has a riverside head office just outside downtown, in a building it also owns.
Riegel told the paper the Kettering Tower will be the new company head office in 18-24 months, and that a press conference is planned for later this month to talk about his plans in Dayton. He suggested the city – a boomtown when the US was a manufacturing powerhouse – is on a comeback.
If that plays out, buying entire office towers at bargain rates will have been a very cagey move. Industry people have different opinions of Riegel, but I’ve yet to hear anyone suggest he’s stupid.
The great, great majority of software companies in this business – at least the pure-play ones – do less than $10 million in revenue, and I wonder how many of those make much of a profit. So it is quite something to see one of them – albeit one that has expanded well beyond just software – buying office towers.