Former Secure-24 may vacate large new Southfield headquarters, Auburn Hills outpost
One of the Southfield Town Center’s towers is at risk of losing its largest tenant in what may be a case of bad timing.
NTT Communications Corp., the Tokyo-based parent company of the cloud services provider formerly known as Secure-24, has put its roughly 100,000-square-foot headquarters in the 4000 Town Center high-rise off the Lodge Freeway up for sublease as well as a 9,000-square-foot outpost in Auburn Hills at 3250 University Drive.
The Southfield lease was signed in September 2019, just a few months before the COVID-19 pandemic threw a wrench into the gears of office markets around the world and caused companies to rethink their space needs as remote work became the norm for many.
Broker Steven Badgero, associate vice president in the Southfield office of Colliers International Inc. who represents NTT, confirmed that the sublease space is NTT’s new headquarters and that it went on the market last month.
A listing on the Colliers website says the asking rate is $19 per square foot per year for the space, which is on the second through eighth floors.
An email was sent to NTT’s general email account as well as a spokesperson seeking information on why another user is beign sought. It is not clear if the company is moving employees to another space or going remote.
Steve Morris, a longtime broker focused on tenant representation who heads Farmington Hills-based Axis Advisors LLC, said it is unique that NTT decided to give up its entire headquarters.
“They put up their whole space and didn’t go hybrid,” he said, also adding that it’s difficult to fill sublease space because prospective occupants want the sublessor to pay for modifications to the office, something the sublessor is usually disinclined to do.
NTT acquired Secure-24, which was founded in 2001, in 2018, when it had about 600 employees.
It is far from the only large company in Oakland County to shed office space in the COVID-19 pandemic.
Earlier this year, Crain’s reported that others include Blue Cross Blue Shield of Michigan, which had 118,000 square feet in Southfield up for sublease, and Delphi Technologies, which had 102,000 square feet in Troy up for sublease.
CoStar Group Inc., a Washington, D.C.-based real estate information service, says that in the third quarter, for the first time since the outbreak of COVID-19, nationwide the amount of sublease space available shrunk to about 205 million square feet. At the end of the second quarter, it was about 207 million square feet.
The 4000 Town Center building is 396,000 square feet and was built in 1979, according to CoStar.
The 2.2 million-square-foot Southfield Town Center was purchased in 2014 by New York City-based 601W Cos. for $177.5 million. In 2018, Crain’s reported that the complex had undergone some $56 million in renovations, including tenant improvement allowances, under 601W’s ownership.
Earlier this year, it was revealed that Plante Moran shuttered its owned 125,000-square-foot office at 27400 Northwestern Highway in the Victor Center building, put it up for sale for an undisclosed price and leased an additional eight floors in the Southfield Town Center in addition to the four it already takes, bringing its footprint there to 192,600 square feet, up from 50,200.
Posted By: Crain’s Detroit Business on October 8, 2021. For more information, please click here to read the source article.
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