Well-known office properties in metro Detroit up for grabs
According to a second-quarter report from the local office of New York City-based Newmark Knight Frank, the vacancy rate in metro Detroit’s office market increased to 16.8 percent from 16.5 percent in the first quarter as some 181,000 square feet became available. It’s also nearly 2 percentage points higher than it was a year ago, at 14.9 percent vacant.
The four buildings that hit the market in the last week are as follows:
- One of the Ottawa Towers buildings, which is 200,000 square feet and vacant. It is on the market for $5.9 million, or just shy of $30 per square foot. It is owned by an affiliate of Bob Waun’s Pontiac-based Dirt Realty, which acquired them earlier this year for $7.4 million. Waun told me he thinks its a good contender for a corporate headquarters. “I hate seeing that building empty, and if I can’t fill it, I want somebody else to do it,” Waun said.
- Three of the buildings in the North Troy Corporate Park marketed by Farmington Hills-based Friedman Real Estate. The buildings at 700 Tower Drive and 800 Tower Drive, plus 5555 New King Drive, total 569,000 square feet of the 1.2 million-square-foot, eight-building complex around I-75 and Crooks Road. Their occupancy rates are not known. A message was left with one of the brokers on the listing seeking comment. A group of investors lead by Miami-based Rialto Capital Management LLC paid $15.5 million for the entire office park in 2012 when it was just 23 percent occupied.
“In excess of 50 percent of all suburban office buildings were sold for cents on the dollar from 2011-2016 as a result of the CMBS mortgage foreclosures,” Morris said. “Landlords who purchased office buildings during the aforementioned time now have high occupancy. Thus, a building that was purchased below replacement costs, i.e. $15 to $40 per square foot (which cost $200 per square foot to build) are now on the market for sale in the range of $100 to $150 per square foot. It’s a win-win. The seller will make a very large profit and the purchasers obtain a highly occupied building with the positive outlook that rental rates will again increase a few years out.”
In Detroit, the 635,000-square-foot Fisher Building hit the market last month and the 420,000-square-foot building now known as The Icon, formerly the UAW-GM Center for Human Resources, hit the market shortly thereafter.
Posted By: Crain’s Detroit Business on September 28, 2021. For more information, please click here to read the source article.
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