Gilbert eyes converting part of Buhl Building for apartments

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April-25-23, 01:53 PM
Airforceguy

Gilbert eyes converting part of Buhl Building for apartments

Gilbert eyes converting part of Buhl Building for apartments
https://s3-rd-prod.crainsdetroit.com...ing-main_i.jpg

Quote:

At least a portion of Dan Gilbert's Buhl Building downtown may become residential space.

Several sources have told me of requests for architecture proposals for the project going out to national firms, and multiple office tenants not having their leases renewed to make way for units.

It's not known how many floors of the 27-story high-rise are being considered for residential. Some or all of it could be in play.

Bedrock LLC, Gilbert's Detroit-based real estate company, did not respond to emails last week and Tuesday seeking an interview and additional details.

Converting the Wirt C. Rowland-designed tower into apartments would likely be the most substantial office-to-residential project in Detroit in the pandemic era. Its history, size and location make it one of the more prominent buildings in the city.

https://www.crainsdetroit.com/real-e...idential-units
April-25-23, 02:11 PM
Richard

It’s called doing due diligence in order to find highest and best use.

People are still hung up on the concept of the WFH trend will continue eliminating the need for office space when all evidence points to how it is fading fast.
April-25-23, 02:52 PM
401don

Quote:

Originally Posted by Richard

It’s called doing due diligence in order to find highest and best use.

People are still hung up on the concept of the WFH trend will continue eliminating the need for office space when all evidence points to how it is fading fast.

It's not just WFH. Detroit has a lot of new office space coming online with Gilbert's other recent building renovations, the Hudson Site, the RenCen vacancies and the District Detroit projects. Not to mention if the Greek guy ever gets his act together with the Penobscot. There is demand for residential. Just not sure there's enough at the rates required.
April-25-23, 03:54 PM
mwilbert

All you have to do is look at the office real estate market to know that WFH isn't fading in such a way as to fill up all the office buildings. Detroit has a lot of older buildings that are potentially attractive as housing, and it can make sense to use them that way.
April-25-23, 03:56 PM
Danny

Oh heck no! The Bulh Building was designed to be a just plain office building. Please set your eyes of buying the Penobscot Building.
April-25-23, 04:56 PM
Gistok

pictures

The 27th floor used to be the Savoyyard Club, an amazing space with huge windows [likely installed in the 60s or 70s]. I stood up in a wedding of the former building owner [Jerry Luptak] his niece in 1986. It was the best wedding location I have ever been to!

Since the businessmen's social club closed in the 1990s, it has been used for storage [and a Yoga place]. I hope if the building gets converted to apartments [the parking structure just south of the Buhl Building belongs to it] that this space can be brought back into use. The views from the 27th floor to the neighboring office towers, river and Canada are just incredible.
April-25-23, 05:34 PM
southen

If they do a conversion it is all but a forgone conclusion that there will be a rooftop or top floor element to the project. All you have to do is look at the success of the Monarch Club and what Bedrock is already doing at the Book Tower. Even Hudson's is going to have rooftop space for food/drink at the Block. Access to these views can be lucrative business.
April-25-23, 06:16 PM
Gistok

^ They used to have wonderful spaces in One Woodward Ave. [[Top of the Flame restaurant) and Ponchartrain Hotel [Top of the Ponch restaurant]. Not as lofty as the top of the Renaissance Center... but still nice buildings with a view. :)
April-25-23, 08:55 PM
stasu1213

I wish that Bedrock purchase the Penobscot Building.
April-26-23, 01:13 AM
Richard

Quote:

Originally Posted by 401don

It's not just WFH. Detroit has a lot of new office space coming online with Gilbert's other recent building renovations, the Hudson Site, the RenCen vacancies and the District Detroit projects. Not to mention if the Greek guy ever gets his act together with the Penobscot. There is demand for residential. Just not sure there's enough at the rates required.

2021 class A office space only had a 10% vacancy rate @ $30 per sqft it is the highest in Michigan.

The lowest Class C is $18 per sqft

2023 the average rent on a studio apartment in a converted building rents at about $4 per sqft

Apartments are having a 4.2 % vacancy rate.

The “Greek guy” passed away during COVID so it is strictly corporate now,they are willing to sell it for the price they want but after the purchase price and cost of renovations you can buy a ready to go building in any other city that would show a greater return.

Gilbert bought the low hanging fruit,his words not mine,so he is in most of the buildings pretty cheap,because of the rise of the cost of the remaining buildings and the rise in labor and materials,even if one were to purchase the P building,there would be no way you could be able to compete with Bedrock.

They kinda have a lock on things.

So if you could make the numbers work based on current demand,they would cut your nuts off long enough to renovate it and lose it for foreclosure and they could then swoop in and buy it ready to go out of bankruptcy at 1/2 the price.

Thats why it is sitting there,the numbers are not there for Bedrock to make a move on it,or anybody else for that matter.

They are asking for $100M for the building as is non negotiable.

Considering they paid $5m for it that’s a nice return .

Dallas has 6 skyscrapers for sale,all less then $175m all ready to go and 80% occupied.
April-26-23, 06:46 AM
401don

Quote:

Originally Posted by Richard

The “Greek guy” passed away during COVID so it is strictly corporate now,they are willing to sell it for the price they want but after the purchase price and cost of renovations you can buy a ready to go building in any other city that would show a greater return.

It's no more corporate than Gilbert's business. The Greek guy is Steve, the son, who has been running Triple Properties for several years. It's very much a family business.
April-26-23, 11:08 AM
LongGone06

Quote:

Originally Posted by Gistok

The 27th floor used to be the Savoyyard Club, an amazing space with huge windows [likely installed in the 60s or 70s]. I stood up in a wedding of the former building owner [Jerry Luptak] his niece in 1986. It was the best wedding location I have ever been to!

That brings back a memory. I went to an investigative service firm's Christmas party there in 1991 or 1992. Great views. Unfortunately, it was the only time I was there. Can't believe it's been 30 years.
April-26-23, 04:07 PM
Richard

Quote:

Originally Posted by 401don

It's no more corporate than Gilbert's business. The Greek guy is Steve, the son, who has been running Triple Properties for several years. It's very much a family business.

There is a massive difference between the 2 corporations,Gilbert’s is an investment corporation where as the others are a speculation corporation,and Canadian.

Bedrock purchases and rebuilds.

Really - they paid $5m for the building,dumping $50 - $60 million they would still be ahead of the game not to even mention others are putting up to $350m into their properties.

They must have some bank sitting around sense they are trying to purchase a major league sports team,speculators are the Bain on Detroit.
April-27-23, 07:05 AM
401don

Quote:

Originally Posted by Richard

There is a massive difference between the 2 corporations,Gilbert’s is an investment corporation where as the others are a speculation corporation,and Canadian.

Bedrock purchases and rebuilds.

Really - they paid $5m for the building,dumping $50 - $60 million they would still be ahead of the game not to even mention others are putting up to $350m into their properties.

They must have some bank sitting around sense they are trying to purchase a major league sports team,speculators are the Bain on Detroit.

You have an incredible knack for twisting things. You had stated it wasn't a family business since the father passed and that the decisions were strictly corporate. Not true. Whether it's Canadian is irrelevant to that. We also weren't talking about the types of decisions and investments they are making.
April-27-23, 10:24 AM
Richard

Quote:

Originally Posted by 401don

You have an incredible knack for twisting things. You had stated it wasn't a family business since the father passed and that the decisions were strictly corporate. Not true. Whether it's Canadian is irrelevant to that. We also weren't talking about the types of decisions and investments they are making.

Lol,talk about twisting,show me where I posted it was no longer a family business,even more so when I posted that his son put in a bid for a sports team.

I posted it was strictly corporate because it is,devoid of any personal caring about the building which it could be argued that Bedrock as a corporation has purchased buildings and renovated them for the most part while respecting their historical value and not just as a speculative investment like the Canadian company has a history of doing.

You posted that their corporation is no different then Bedrocks as a corporation,I simply clarified that there is a difference between night and day between the two.