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REDICO Makes Major Detroit CBD Purchase

DETROIT—The office market here has just hit a historic low, and the multifamily market is even tighter.

By Brian J. Rogal | brianjrogal | | Updated on August 04, 2016

 

det-150Wjeffersonmed (4) 150 W. Jefferson is 89% occupied, and the CBD as a whole has a vacancy rate of less than 15%.
DETROIT—Investors and tenants continue to show an interest in the downtown Detroit office market, notwithstanding the problems that beset much of the rest of the city. In the second major purchase of a significant downtown property this summer, REDICO , a Southfield, MI-based company, recently bought 150 W. Jefferson, a class A office tower in the financial district, another step in its expansion throughout the Midwest in general, and the Detroit market in particular. The price was not disclosed.     Tenants currently occupy 89% of the 25-story, 500,000 square foot building, including Miller, Canfield, Paddock & Stone , Jones Day , Gensler , Lockbridge , NORR , Plunkett Cooney , Butzel Long , Starcom/Digitas and KPMG .   “One component of our growth strategy is to acquire world-class properties in the Midwest,” says Dale Watchowski , president and chief executive officer of REDICO. “The purchase of 150 W. Jefferson, in downtown Detroit, is a perfect example of a building that fits our criteria. We acquire well-leased, trophy properties that will attract and retain quality tenants. In addition, 150 W. Jefferson has a unique opportunistic component. The site has the added potential of a future development opportunity.”  Earlier this summer, Image Capital LLC , a New York City real estate investor, purchased two of the three Riverfront Towers , a luxury high-rise apartment community located along the river in downtown Detroit, for $79.5 million. At $142,729 per-unit, the sale set a new record for a residential complex in the city. Experts attributed the price to the incredibly high demand for downtown apartments by the thousands of office workers that recently relocated there. The Detroit CBD’s vacancy rate fell 80 bps to 14.7% during the second quarter, a historic low , as roughly 110,000 square feet was absorbed. In just two years, the market absorbed 810,000 square feet of class A space. As part of REDICO’s Midwest expansion efforts, the company recently purchased a one million square foot mixed-use property in Creve Coeur, MO, a suburb of St. Louis.    REDICO has been involved in the development and acquisition of Detroit commercial real estate for decades. Noteworthy projects include Gateway Marketplace, One Kennedy Square, and the Compuware Building. As reported in GlobeSt.com, recently REDICO won an auction to purchase the Fisher and Kahn Buildings in the historic New Center neighborhood just outside the CBD.

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