Rocket Mortgage Office Relocating Amid Decline in Business and Employment

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Five years ago, Rocket Mortgage looked to be growing into a major presence in Downtown Cleveland’s office market. The company was growing so fast here it seemed plausible that it might even anchor a new tower for local offices of Rock Ventures’ companies, such as the one Bedrock proposed in its riverfront development.

As it turns out, Rocket Mortgage’s offices will join at the end of this year with other companies under Rock Ventures’ umbrella in a downtown building owned by Bedrock, itself a Rock Ventures company.

But it’s not going to be in a newly constructed office building. The reason is because Rocket Mortgage’s office presence in Cleveland is about to shrink by two-thirds after receiving financial incentives five years ago from the city and state governments to expand.

Not only has the mortgage business since declined, taking employment down with it, Rocket Mortgage has embraced a hybrid work environment policy with employees working in the office only a few days per week.

So Rocket Mortgage is going to move into a much smaller space in an existing building owned by Bedrock — 250 West Huron, located at the building’s namesake address. It overlooks the Cuyahoga River and the Bedrock development alongside it.

The 14-story, 324,662-square-foot building constructed in 1990 at Tower City Center is commonly known as the Ritz Carlton Cleveland hotel. But the Rock Ventures’-owned hotel is only part of the building’s use.

The first floor of 250 West Huron is retail, floors two through five are offices and floors six to 14 are the hotel. The largest office tenant in the building is Kurv, formerly Electronic Merchant Systems.

At 250 West Huron, Rocket Mortgage will spend $5 million to make interior renovations for its new offices, noted Robert Garuccio, an interior build-out executive at The Albert M. Higley Co. of Cleveland, in a filing with the Cleveland Building Department that became public yesterday.

“This includes a 32,000-square-foot build-out of existing space on the third floor of 250 Huron,” he wrote in the filing. “It involves full demo, replacement of the HVAC system, modification to the electrical, plumbing and fire suppression systems and a full build-out of finishes creating a new office space.”

At the end of this year, Rocket Mortgage’s 10-year lease is due to expire for a 115,000-square-foot office space at the Higbee Building, 100 Public Square, in Downtown Cleveland, according to public disclosures to shareholders.

The Higbee Building is owned by VICI Properties of New York City, a publicly traded real estate investment trust. Its largest and most visible tenant is the 300,000-square-foot JACK Cleveland Casino. The second-largest tenant is Sherwin-Williams which occupies 212,000 square feet — at least for now.

Billionaire Dan Gilbert’s Rock Ventures owned the Higbee Building until it was sold in 2020. When Rocket Mortgage was called Quicken Loans in 2016, it moved its offices and 400 employees to the Higbee Building. Gilbert prefers his companies to pay rent to his other companies, which he calls a “self-sustaining ecosystem.”

Rocket Mortgage occupied at the Higbee Building all of the fourth floor and half of the fifth floor — each of them huge floorplates that measure 77,000 square feet. And, five years ago, it appeared as if Rocket Mortgage in Cleveland was about to grow even more.

In 2021, as the home loan company grew to more than 500 employees here, it received incentives from city and state taxpayers to add hundreds more full-time jobs that could more than double its office footprint here.

From the City of Cleveland, Rocket Mortgage received a Job Creation Incentive Grant of $75,000 in 2021. But it could have grown to $975,000 over the next five years if added another 700 full-time jobs, for a total of more than 1,200 employees.

Similarly, in 2021, the State of Ohio approved a 2.211-percent, 10-year, job-creation tax credit valued at up to $9.6 million if the home loan company created 630 new jobs by the end of 2023 and maintained operations in Cleveland for at least 13 years to receive the full incentive.

Rocket Mortgage reportedly did create the promised jobs by 2023 — but they weren’t entirely in the office. And they didn’t apparently keep them. The company, like many others after the 2020-21 pandemic, had its employees work remotely and then on a hybrid basis.

And, after interest rates rose rapidly from an historic low of 3 percent in 2021 to a peak of nearly 8 percent by the end of 2023, the U.S. mortgage business suffered a major downturn. For Rocket Mortgage, that meant a company-wide reduction in employment after 2022, falling from 14,700 employees to roughly 12,400 this year.

But its employment locally fell more sharply — to about 250 Cleveland-based workers, according to a media report. Rocket Mortgage also laid off workers last year after Rock Ventures acquired real estate firm Redfin and home loan servicer Mr. Cooper.

Bedrock’s Vice President of Communications Lora Brand did not respond to an e-mail seeking comment and more information prior to publication of this article

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