Penobscot Building conditions update

[Satiricalivory]

That office vacancy rate is low, about the same as Chicago's and it's not comparable to industrial.

I'm not sure if you've noticed but nobody wants to touch suburban office space with a ten foot pole anymore. Southfield's office space is basically doomed and has had double the vacancy rate and climbing. Unless you're in some ultra lux office in Bloomfield hills, nobody wants to work in the suburbs.

[Gistok]

That office vacancy rate is low, about the same as Chicago's and it's not comparable to industrial.

I'm not sure if you've noticed but nobody wants to touch suburban office space with a ten foot pole anymore. Southfield's office space is basically doomed and has had double the vacancy rate and climbing. Unless you're in some ultra lux office in Bloomfield hills, nobody wants to work in the suburbs.

Hate to break it to you but of the 76 million square ft. of office space in the Detroit/Ann Arbor metro area... 16 million sq. ft. of it is in downtown. Apparently SOME companies do want to have space in the suburbs. Even when you add the occupied space together... there's way more occupied space in the suburbs than Detroit. It would be nice if that were to change, but with the price of downtown space rising, the suburban space becomes cheaper and more attractive to tenants... regardless of what the employees want.

[Satiricalivory]

I'm aware suburban space in southeast Michigan is bloated. Places like Ann Arbor are not a typical suburb and doesn't apply to what I'm talking about. Every metro has similar numbers, it's the result of decades of subsidized sprawl and the office park craze of the mid-century. However the trend has reversed, suburban office space is now a hard sell and it's dwindling/not attractive. If cheap prices was all they cared about then Southfield wouldn't be a office graveyard right now.

[IrishSpartan]

Yesterday was just another day at the Penobscot.

https://www.deadlinedetroit.com/arti...rs_should_sell

[stasu1213]

City got to stop issuing citations and start taking drastic action against the current owners

[Satiricalivory]

Seize the property already.

[401don]

Seize the property already.

Agreed. Instead are they going to wait for someone to die in an elevator accident and then pay out millions in the lawsuit? The Fire Dept. can order a restaurant/bar/club closed if it's a continuous hazard. Why should it be different for an office building?

[KnnNike]

That office vacancy rate is low, about the same as Chicago's and it's not comparable to industrial.

I'm not sure if you've noticed but nobody wants to touch suburban office space with a ten foot pole anymore. Southfield's office space is basically doomed and has had double the vacancy rate and climbing. Unless you're in some ultra lux office in Bloomfield hills, nobody wants to work in the suburbs.

Eh, I would be careful doing comparisons with Chicago. I'm not an expert in the field, but I suspect office vacancy rate is calculated like unemployment rate: participation counts. That is, if a building is currently uninhabitable for office space [[due to interior damage or some other need for renovations), then it doesn't get counted in the occupancy rate.

There are still entire buildings in Downtown Detroit or adjacent that are sitting empty. Especially along the Fort Street corridor. Then there's the old state government tower complex next to the Greyhound station that has been for sale for years. Until we see massive towers like this get back to occupied, I don't think it's fair to say that downtown office space is all full.

[Satiricalivory]

I don't see what difference this makes. If the habitable office inventory is full than that means we either need to build or renovate more space. We're still full, we still need more class A space that companies want/need.

Chicago has plenty of examples of uninhabitable office buildings btw, like the colossal post office building. 1200 Sixth St isn't exactly "massive" and that's the only notable example you have here.

[CrashDummy]

I think if anyone buys the Penobscot, it should be Mat Ishbia. He's already taken shots at Quicken and even started a donation battle to MSU. If he's really going to compete with Gilbert, sitting back in Pontiac just isn't going to cut it. An iconic acquisition such as this would be a big step.

[Gistok]

I think if anyone buys the Penobscot, it should be Mat Ishbia. He's already taken shots at Quicken and even started a donation battle to MSU. If he's really going to compete with Gilbert, sitting back in Pontiac just isn't going to cut it. An iconic acquisition such as this would be a big step.

I didn't know who he was until you mentioned him. He just this January joined the ranks of Michigan's richest, when he took his company public via a route called SPAC... something else I had never heard of. He jumped right ahead of the Ilitch, Devos/Van Andel and Meijer's families, behind #1 Gilbert.

I would welcome him buying Detroit real estate, if he is so interested. I would welcome even more him moving his 8,000 employees downtown... another reason for another office tower or two on the downtown landscape.

It's nice to have another "Gilbert" style selfmade über billionaire here in SE Michigan... he's now worth $12 billion, his brother is worth $4 billion.

https://www.forbes.com/sites/antoine...h=69a943b27a33

[401don]

I didn't know who he was until you mentioned him. He just this January joined the ranks of Michigan's richest, when he took his company public via a route called SPAC... something else I had never heard of. He jumped right ahead of the Ilitch, Devos/Van Andel and Meijer's families, behind #1 Gilbert.

I would welcome him buying Detroit real estate, if he is so interested. I would welcome even more him moving his 8,000 employees downtown... another reason for another office tower or two on the downtown landscape.

It's nice to have another "Gilbert" style selfmade über billionaire here in SE Michigan... he's now worth $12 billion, his brother is worth $4 billion.

https://www.forbes.com/sites/antoine...h=69a943b27a33

Really surprised you haven't heard of him or United Shore. They've been in the news non-stop in the past year. On a much smaller scale than Gilbert, he's doing a lot for Pontiac, including generating tax revenue, so Detroit doesn't need to be stealing from a sister urban core.

[KnnNike]

I think if anyone buys the Penobscot, it should be Mat Ishbia. He's already taken shots at Quicken and even started a donation battle to MSU. If he's really going to compete with Gilbert, sitting back in Pontiac just isn't going to cut it. An iconic acquisition such as this would be a big step.

Sucks that these guys are bending over backwards to throw money at the two major research universities in the state not actually based in Detroit. Wayne State could greatly benefit from these kinds of efforts instead.

[NSortzi]

There are still entire buildings in Downtown Detroit or adjacent that are sitting empty. Especially along the Fort Street corridor. Then there's the old state government tower complex next to the Greyhound station that has been for sale for years. Until we see massive towers like this get back to occupied, I don't think it's fair to say that downtown office space is all full.

Other than Executive Plaza [[the building by the Greyhound station), there isn’t anything in the immediate downtown area that’s “massive” and entirely vacant without announced plans. The only thing that comes close is the Film Exchange Building. Everything else is spoken for.

[K-slice]

Really surprised you haven't heard of him or United Shore. They've been in the news non-stop in the past year. On a much smaller scale than Gilbert, he's doing a lot for Pontiac, including generating tax revenue, so Detroit doesn't need to be stealing from a sister urban core.

Generating tax revenue is about the only thing he's doing for Pontiac that I know of. While technically IN PONTIAC, their HQ is about as far from the "urban core" of the city as it could be.

A giant pole barn surrounded by parking, no walkability whatsoever by design. It's a massive drive in, drive out style exurban office building. The employees I'd wager are are far more likely to go to Troy, Rochester Hills, or the suburb they live in to spend money over Pontiac.

[Satiricalivory]

Mat and the leadership at the company seem to be set on the suburban dinosaur mindset. Dan Gilbert he is not, not even in his dreams.

They were going to go into the phoenix center but didn't for some reason. Their office campus is atrocious but I'm glad Pontiac is getting the taxes. Does Pontiac have an income tax?

[K-slice]

The Penobscot is certainly worthy of a large office tenant owning the building and using it for their HQ. Thing is, there's no telling who that would be. Maybe in time a startup like Rivian could look to move downtown at some point but who knows.

My question is what's it going to take for the building to be condemned? A water main bursting inside ah-la Stott Tower? Electrical fire? An elevator falling with someone in it?

[EGrant]

Mat and the leadership at the company seem to be set on the suburban dinosaur mindset. Dan Gilbert he is not, not even in his dreams.

They even made a big deal about a giant pedestrian bridge connecting their two campuses. The mindset of parking in a massive lot and never leaving the building during the workday is the complete opposite approach Gilbert has taken.

[Gistok]

The Penobscot Building was completed in 1928, so the building contains a lot of interior columns, and a "H" floor plan, to let in light in the interior spaces. Remember back in 1928 air conditioning wasn't common, so being near a window was more important than it is today. So the Penobscot Building doesn't have open floor plans that are common to Class A office space of today.

Another thing is that the ornate 3 story lobby of the Penobscot Building was filled in many years ago with extra office space, although the original ornate ceilings and walls still exist. So it would be nice to have someone with deep pockets like Gilbert, who would restore it back to its' 1928 original look.