TROY, MI-Anglo Irish Bank, mired in a mandatory sell-off of its holdings by the Irish government, has hired Grubb & Ellis Co. to find buyers for some or all of the eight office buildings in the North Troy Corporate Park. The challenge is that less than 35% of the 1.2 million square feet is occupied and Troy, once the best office market in Southeast Michigan, is now one of the worst in the country.
Located along Tower Drive, Corporate Drive and New King Street in north Troy, the late-1980s-built offices once enjoyed much fuller occupancy, mostly by the former automotive supplier EDS. However, the firm left the property as it was acquired by Hewlett-Packard a few years ago.
Emmes & Co. LLC bought the buildings for about $80 million in 2008 and renamed the property Baluster Park, but the reported $55.4 million loan was recently taken back by lender Anglo Irish. Current tenants include Siemens, Henry Ford Health System and United Global Sourcing. Leases run in the mid-teens.
Troy, once the home of major office users such as EDS, Delphi and Kmart, has suffered from the bankruptcy or sale of these companies. The current vacancy rate is around 31%, which is higher than Detroit’s vacancy rate of about 30.5%, according to a first quarter report by Grubb & Ellis. Jeff Shell with Grubb & Ellis’ Corporate Finance division tells GlobeSt.com that the plan is to try to find large users who would like to buy or lease entire buildings. The property has some buildings that have good occupancy, while some of the buildings are completely empty.
He says while the firm would gladly accept an offer to buy the whole park, one new user probably wouldn’t lease up the properties the best way afterward. “This isn’t going to be a fire sale,” Shell says.
There are large users out there that may believe purchasing a class B building in a class A location would be financially efficient, Shell says. “A mile to the north of this site, Chrysler just leased a couple hundred square feet – there are large users out there. There’s a lot of reasons a large user might want to own, such as consolidation, or new lease rules and tax advantages for ownership. Our goal is to find these users and explain the advantages of owning their own building,” he says.
Various plans by companies to move into large buildings at the park have derailed in the past few years. Volkswagen AG had planned to take one of the facilities, but chose to renew at its offices in Auburn Hills, reports say.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
