Gilbert and Meridian team up. Buy Compuware building

[Huggybear]

People seem to be overlooking the bigger implication, which is that Quicken will not be building a new headquarters any time soon.

HB

[mikeg19]

People seem to be overlooking the bigger implication, which is that Quicken will not be building a new headquarters any time soon.
HB

How do you figure? According to the article, Quicken will occupy about 300,000ft of the 1m available. Meridian will lease about 330,000 with 1,000 employees and plans to add another 1,000 in the next 5 years, so you could hypothetically double that number. Plus Compuware will continue to lease 130,000ft of the building. That's basically a full building right there. If Gilbert wants to consolidate his operations into one central building, he's going to have to build a new HQ fairly soon. Lets not forget, by the time designs are finalized, permits approved, etc., and there is a shovel in the ground, it'd still be a few years off from now. I'd imagine Gilbert will have a new HQ in downtown by 2020. That will then allow him to lease out the existing spaces that his Quicken employees currently are in to other companies.

[SpartanDawg]

How do you figure? According to the article, Quicken will occupy about 300,000ft of the 1m available. Meridian will lease about 330,000 with 1,000 employees and plans to add another 1,000 in the next 5 years, so you could hypothetically double that number. Plus Compuware will continue to lease 130,000ft of the building. That's basically a full building right there. If Gilbert wants to consolidate his operations into one central building, he's going to have to build a new HQ fairly soon. Lets not forget, by the time designs are finalized, permits approved, etc., and there is a shovel in the ground, it'd still be a few years off from now. I'd imagine Gilbert will have a new HQ in downtown by 2020. That will then allow him to lease out the existing spaces that his Quicken employees currently are in to other companies.

all of this, plus yeah i don't think they said they were taking any additional space in the building? They have quite a large presence in one woodward, the qube, and first national. so they have maybe 20% of their employees in the compuware building? plus i don't think someone like gilbert would like the fact that his HQ building isn't even owned completely on his own.

[Scottathew]

all of this, plus yeah i don't think they said they were taking any additional space in the building?

DetNews says otherwise:

Quicken Loans will occupy an additional floor and add 60,000 square feet. Bedrock will oversee management, leasing and daily operations of the building.

http://www.detroitnews.com/story/bus...ding/19202509/

[Huggybear]

How do you figure? According to the article, Quicken will occupy about 300,000ft of the 1m available. Meridian will lease about 330,000 with 1,000 employees and plans to add another 1,000 in the next 5 years, so you could hypothetically double that number. Plus Compuware will continue to lease 130,000ft of the building. That's basically a full building right there. If Gilbert wants to consolidate his operations into one central building, he's going to have to build a new HQ fairly soon. Lets not forget, by the time designs are finalized, permits approved, etc., and there is a shovel in the ground, it'd still be a few years off from now. I'd imagine Gilbert will have a new HQ in downtown by 2020. That will then allow him to lease out the existing spaces that his Quicken employees currently are in to other companies.

Gilbert may not want or need to consolidate his operations in one building. It's possible, but many large companies don't [[and in fact, their "signature" buildings are often mostly leased to other tenants).

For example, Comerica never did ops in One Detroit Center [[they were on W Fort and in Auburn Hills), General Motors does not do hardware engineering in the Ren Cen [[or even its old HQ), Fifth Third did not fill a tower of Southfield Town Center, etc.). Even BCBS has a campus setup.

It's remotely possible that Gilbert might consolidate just because he wants to. But this is what prompted my comment:

1. Gilbert/Quicken/Bedrock has/have his/its/their employees spread out among the various buildings to keep the lights on there and keep occupancy and rents up. They can't consolidate the employees until they have enough of that space [[mostly Class B or B+, if BOMA has such a classification) rented out to paying tenants [[as opposed to moving money from one pocket to the other). Otherwise, the game of Monopoly collapses.

2. Of all the ships in the realm, Compuware is the most modern [[it's the only one built in the internet era) and probably could command the highest rents. They also paid a mint for it compared to the other properties. Quicken C-suite? Yes. Middle management? probably. But that doesn't require anywhere near that entire building. The best and highest use of the rest is to rent to tenants paying market rate rent, CAM, etc.

3. Which leads us to the hypothetical high-rise HQ. If a consolidated Quicken moved from Compuware to it, you'd still have a tenant replacement problem - only you'd be filling all of Compuware while trying to avoid impacts on the rest of the collection.

And because these are closely held companies, it's unclear how extended financially they are. $1.5 billion spent on a high-stakes real-estate program is a ton of money. A new HQ could easily be $300-400 million more. That either comes out of pocket, in which case it hurts - or has to be financed, which requires some demonstration that rents will support the mortgage payments.

I'm not saying a HQ will never happen, but at the same time, I've been around here long enough to know that people thought nothing would happen to Compuware, that there would be a Two Detroit Center, etc.

HB

[Scottathew]

People seem to be overlooking the bigger implication, which is that Quicken will not be building a new headquarters any time soon.

HB

From what I read in DetNews Quicken is going from having 4 floors, to having 5 floors. So they're not gaining a ton of space.

Although, on the Hudson site if they do build a mid-rise or high-rise I feel strongly it would be mixed use with retail on street level, a few floors of office, and the remainder\majority would be residential.

Gilbert building the Z-Lot parking garage put him in a great position to buy the Compuware building, put even more people into it [[his own and other companies), and then redevelop the Hudson site that they currently use as a parking garage as well.