Signature Associates

Kelly Services renovating headquarters, consolidating space with sale-leaseback deal

A sale-leaseback deal expected to close early next year will result in a real estate musical chairs for Troy-based Kelly Services Inc., which is consolidating employees into a renovated headquarters building and another building nearby.

The publicly traded staffing company (NASDAQ: KELYA, KELYB) on Thursday announced a pending sale of three of its owned properties, including its headquarters building, to Bloomfield Hills-based A.F. Jonna Development LLC that means nearly 420,000 square feet of office space on the West Big Beaver and Crooks corridor will be shifted around.

The properties in the sale are the Kelly Services headquarters at 999 W. Big Beaver Road, which is 180,500 square feet; the headquarters annex, a 50,000-square-foot property once known as the Kimberly Scott Building at 911 W. Big Beaver; and the Lindsey Centre, which is 88,000 square feet at 2690 Crooks Rd.

The latter two buildings will be vacated by Kelly Services, with its employees consolidating into the headquarters building as well as a 100,000-square-foot building at 295 Kirts Rd. that Kelly will retain ownership of. Kelly has about 1,100 employees in Troy.

Brian Mioduszewski Sr., senior director of Kelly real estate services, declined to reveal the purchase price and lease terms of the deal.

“Kelly conducts an annual review of space and assets, and this year decided to consider real estate options based on our analysis,” Mioduszewski said in an email.

Olivier Thirot, executive vice president and CFO, said in a statement: “By consolidating our employees into these two properties, including a renovated, modern headquarters building, we will be able to provide more employees with better accommodations and greater connectivity.”

The architecture firm on the renovation is Pontiac-based TDG Architects and Interior Space Management, which has offices in Troy and Southfield, is working on the flooring at the under-renovation headquarters, Mioduszewski said.

According to a third-quarter office market report from the local outpost of New York City-based brokerage house Newmark Knight Frank, the average office space asking rate in Troy is $20.39 per square foot, with higher-end Class A space asking $23.48 per square foot and more modest Class B space asking $19.67 per square foot. The market has 13.38 million square feet and is 17 percent vacant, according to NKF.

Plans for the headquarters annex and the Lindsey Centre that are being vacated will be revealed by AF Jonna at a later date, according to a press release from Kelly Services. A message was left with Arkan Jonna, head of A.F. Jonna.

The four properties total 418,500 square feet and are spread across about 19 acres, according to information compiled from CoStar Group Inc., a Washington, D.C.-based real estate information service.

Kelly Services says it had $5.5 billion in revenue last year.

Posted By: Crain’s Detroit Business on December 5, 2019.  For more information, please click here to read the source article.

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