"It's probably been vacant since 1995," Ryan says. He said Amerimar plans to renovate the facility much like it has in other markets. The Philadelphia-based company has turned around 600 West Chicago Ave. in Chicago into about one million sf for telecom hotel use, and in their hometown in a facility called Net-Works Philadelphia. "Both of those facilities are completely leased up," Ryan notes.
The Detroit building will have three main uses. One will be for local and long distance telephone switching, the second for Internet hotel use for dial-up connections for carriers such as AOL and Compuserve, and the third as a place for data storage and backup.
"Amerimar doesn't own it yet, but will probably close the contract sometime this quarter," Ryan tells GlobeSt.com. "It's hard to say what the lease rate would be, I'd guess from $16 to $20 sf triple net."
He said a downturn taken by most telecom companies is being felt in Detroit. "What happened is everything was going gangbusters until October, then the Nasdaq took a nasty turn. At first the telecom companies either dried up or pulled back from new locations," Ryan says.
Detroit is a submarket for telecom leases, he says, and the major companies were just starting to turn to the area. "Now everything is on hold until we figure out the stock market, how things are going to go. The only companies doing anything are the big companies that can provide all three of the services, like AT&T and Sprint."
He said because of the downturn, Amerimar's Detroit facility could take a little longer to lease up, but there will be no change to the plans. "They see it as an opportunity to get geared up and ready for tenants," Ryan says.
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