Crain’s Detroit Business
The 2.2 million-square-foot Southfield Town Center office complex is under contract to New York City-based real estate investment firm 601W Cos. for $177.5 million and the company plans more than $30 million in renovations to the complex.
Michael Silberberg, principal for 601W, said the Class A four buildings will be modernized where necessary to retain existing tenants and attract new ones. Specific improvements have not yet been determined.
The complex has a vacancy rate of 32 percent, according to Bloomberg LP.
This is 601W’s first purchase in the metro Detroit market.
“We think the market has bottomed out and there is good, exciting stuff going on in Detroit and in those submarkets,” Silberberg said.
According to the company’s website, it has 14 million square feet of property under ownership and management. Those properties have an average occupancy of 94 percent, according to the website.
Silberberg said about half of the company’s portfolio is in the Chicago market. It also owns properties in New York City; Washington, D.C.; Pittsburgh; San Francisco; St. Louis, Mo.; Buffalo, N.Y.; Louisville, Ky.; and Birmingham, Ala.
Silberberg said he expects to close on the Southfield Town Center deal shortly.
New York City-based Blackstone Group LP owns the complex, which it purchased in 1999 for $270 million, according to Washington, D.C.-based real estate information service CoStar Group Inc.
According to commercial mortgage backed securities data from Bloomberg LP, Blackstone is unable to pay the balance due on a $235 million mortgage on the property originated in 2004 by Irving, Calif.-based Greenwich Capital Financial Products Inc. The loan was transferred to Wells Fargo Bank NA for special servicing.
Pittsburgh-based HFF Inc. was marketing the complex and hired Southfield-based NAI Farbman to represent Blackstone locally in the sale. The Southfield office of CBRE Inc. is responsible for leasing the property, which is 32 percent vacant.
“Where there is the ability to stay with current leasing (brokers), a group that knows and understands the building and the market,” that is optimal, Silberberg said.
A voicemail left Thursday afternoon with Andy Gutman, president of Farbman Group, was not returned.