Banker: Penobscot Building in default

Tuesday, August 25, 2009
Banker: Penobscot Building in default

Christina MacDonald and Louis Aguilar / The Detroit News

The owners of the Penobscot Building, a 47-story landmark in downtown Detroit, have defaulted on bank loans and the bank is taking steps to foreclose.
According to an Aug. 7 letter sent to Penobscot tenants by mortgager Capmark Finance Inc., a unit of Capmark Bank, building owner PBDM LLC "committed events of default" in connection with its 2007 loan from Capmark.
A notice of default was filed with the Wayne County Register of Deeds on June 22. Capmark also filed a complaint of foreclosure in Wayne County Circuit Court on June 30; the case is pending.
Advertisement


According to its Web site, the Penobscot was built in 1905. The building at 645 Griswold St. is 63.1 percent leased, according to CoStar Group Inc., a commercial real estate research and information service.
The global recession and the woes of the auto industry have hit Metro Detroit particularly hard. The office vacancy rate for Detroit's Central Business District is 27.8 percent according to CB Richard Ellis, a commercial real estate research and service firm. The decade began with a 17.1 percent rate. The U.S. average for downtown office vacancy is 13.7 percent, compared with 11.1 percent a year earlier, according to Colliers International, another commercial real estate brokerage firm.
laguilar@detnews.com [[313) 222-2760

Hurry up and knock that schitt down! Where are you, demolition man! ;)

No way the Penobscot was built in 1905. The older one was, not the art deco masterpiece we know and love. What's up with this shoddy research?

Quote:

---

Originally Posted by Detroitnerd

No way the Penobscot was built in 1905. The older one was, not the art deco masterpiece we know and love. What's up with this shoddy research?

---

It's Detroit, who cares? :rolleyes:

There are three different structures just in Emporis with the Penobscot name:

http://www.emporis.com/application/?...detroit-mi-usa

http://www.emporis.com/application/?...detroit-mi-usa

http://www.emporis.com/application/?...detroit-mi-usa

Oh, I see, they pulled it off the website. Those sillies. They should have known that "since 1905" doesn't mean that THAT building was built in 1905.

http://www.penobscotbuilding.com/

Jeez, you'd think two journalists would know that art deco buildings weren't built in 1905 and would dig a little deeper!

Quote:

---

Originally Posted by Detroitnerd

Oh, I see, they pulled it off the website. Those sillies. They should have known that "since 1905" doesn't mean that THAT building was built in 1905.

http://www.penobscotbuilding.com/

Jeez, you'd think two journalists would know that art deco buildings weren't built in 1905 and would dig a little deeper!

---

So when was it built? 1928?

Emporis didn't say. I think it was completed in '28.

I'd say the Penobscot is on the same path as the Book Tower, just 5-7 years behind.

It's changed hands 3-4 times in recent years, which is definitely a serious warning sign.

Imagine if the Penobscot becomes abandoned. :eek:

Aren't you licking your lips at the thought, Crawford? Another obsolete building for the wrecking ball! Let go, you sentimentalist. ;)

Just think...after it ripens after 15-20 years of neglect and urban spelunking...it'll be a nice new piece of ruin porn for hipsters to take artsy pictures of.

Quote:

---

Originally Posted by Detroitnerd

Aren't you licking your lips at the thought, Crawford? Another obsolete building for the wrecking ball! Let go, you sentimentalist. ;)

---

Absolutely! Would be a perfect spot for surface parking [[landscaped, of course), and could always be one of Detroit's patented "Premiere Development Opportunities". ;)

And then we can call in Adamo! Yay!

Quote:

---

Originally Posted by crawford

Absolutely! Would be a perfect spot for surface parking [[landscaped, of course), and could always be one of Detroit's patented "Premiere Development Opportunities". ;)

---

Well, that or an over sized canvas for a cheesy Wyland whale mural.

Quote:

---

Oh, I see, they pulled it off the website. Those sillies. They should have known that "since 1905" doesn't mean that THAT building was built in 1905.

http://www.penobscotbuilding.com/

Jeez, you'd think two journalists would know that art deco buildings weren't built in 1905 and would dig a little deeper!

---

Certainly seems to be the intent they are trying to convey on the website....

Quote:

---

Since 1905, the world of business has revolved around Detroit’s internationally recognized landmark, the Penobscot Building. Now, this timeless 47-story landmark stands as a proud symbol of the future.

---

Oh, I know that the website begs for people to misinterpret it. It's the job of a seasoned journalist to think critically. If I gave you a microwave oven I said was made in 1936, you'd know better, right? :p

That building has been on the precipice for awhile, and these sorts of things don't help them lease space.

Reason being is that it's unaccessible compared to other office buildings even downtown, has no parking, it's floor plans do not fit modern office needs nor does it's connectivity, and has some of the same maintenance issues the Book Tower had.

It has way better occupancy than the Book did, so it should make it just fine. Now is the crucial time. If they hold their tenants, they'll be okay - if the bankruptcy spooks' em - lights out.

Yeah, but let's not do anything crazy like quickly install light rail so Penobscotters can leave their car at home.

The Penobscot collection of buildings is a pain in the ass to manage, because it's three buildings of different vintage with separate systems for each. On top of that, they don't have dedicated parking for their tenants like, say, the Buhl or Comerica Tower or 150 Jefferson.

From a management angle, the tower needs to consolidate all the tenants into the tower from the smaller buildings and either sell or whack them. If they sell them, great; they don't have to manage them anymore. If they whack them, great because then they have their parking. They could probably even talk to the Ford Building about going in on the parking, too. Tom would have a much easier time leasing at his building if he could offer that. Then, too, the Penobscot might not have to shoe-horn in so many cars in that tiny space between the Ford and one of their towers. Then we could get a power washer through there and clean out the shit and piss smell from that alley.

This is what the critics of "saving" the Lafayette were trying to say, about no market for the Lafayette space. What would happen to the Penobscot if the Lafayette came available? Would we really want to trade the Lafayette for the Penobscot tower?

Quote:

---

Originally Posted by Detroitnerd

Oh, I know that the website begs for people to misinterpret it. It's the job of a seasoned journalist to think critically. If I gave you a microwave oven I said was made in 1936, you'd know better, right? :p

---

not disagreeing with the hackery of the journalist in not using some common sense. But hey, if I'm rushed to do a story, and the building's own website says 1905, I could see running with it--and making sure I noted I got the info from the building's own website just to cover my ass.

Or, could it be they are accidentally right? Is what is being foreclosed upon the entire "penobscot block" and not just the one building? I mean I guess they'd be technically right if it was annex, and both the Penobscot buildings.

From The Downtown Collection:
Penobscot Building

Building Facts

Built: in 1928Floors: 47Architects: Wirt C. Rowland of the leading Detroit architectural firm Smith Hinchman & GryllsArchitectural Style: Art DecoMaterials: Limestone and GraniteUnique Characteristics: Designed in the shape of an “H� to maximize sunlight in the building
My own observation is that the late twenties, before the stock market crash, must have been an exciting time to live in the City of Detroit.
Certainly, some beautiful buildings were built then!

Fake-ass either-or choices are the demolish-it-now crowd's stock in trade.

Quote:

---

Originally Posted by Detroitnerd

Fake-ass either-or choices are the demolish-it-now crowd's stock in trade.

---

Is it really "fake ass" when it's it's proven time and time again that --EITHER the building has parking for it's tenants OR it's going to be empty and left to rot?

Not saying it's good or "right", just saying it's reality.

Quote:

---

Originally Posted by Detroitnerd

Fake-ass either-or choices are the demolish-it-now crowd's stock in trade.

---

The challenges facing the Penobscot are real and won't go away through a letter-writing campaign or selling t-shirts.

The 47-story tower is one of the few buildings downtown that should be mothballed properly if it has to be vacated. Mid-rise office buildings like the Lafayette are a dime-a-dozen across the country, but the Penobscot is truly an iconic structure. I believe the main tower is worth the loss of the two smaller ones.

Quote:

---

Originally Posted by EastSider

I believe the main tower is worth the loss of the two smaller ones.

---

That's a fake either-or choice. Both were built when Detroit had a great streetcar system. And we could again, if we weren't continually boggled by the either-or choices of parking vs. buildings. But nooooooooo ... :D

not to hijack a thread on the Penobscot, but what's occupancy like in the Stott building? you never hear anything about it - surely the challenges are the same there?

I believe Stott is vacant right now.

Sorry to break your heart, Detroitnerd and others, but light rail is not the panacea - not for these problems. Not to mention, it's at least a couple years away AND only goes to Grand Blvd at this time.

It's going to be at least a decade until rider patterns shift enough to have impact. Not saying we shouldn't do it, but in business, you can't bet on the future like that - especially in a region so full of disappointments. Seen too many lost shirts betting on the maybe.

Losing the penobscot would be a body blow to downtown and devastating.

BTW, it would be the whole penobscot block, they're considered 1 structure.

Stott is not completely vacant, but almost completely vacant. There's some retail and a couple office buried in there.

Quote:

---

BTW, it would be the whole penobscot block

---

The Penobscot doesn't fill the entire block - there is the Ford Building and the old Silver's building.

Quote:

---

Originally Posted by digitalvision

Sorry to break your heart, Detroitnerd and others, but light rail is not the panacea - not for these problems. Not to mention, it's at least a couple years away AND only goes to Grand Blvd at this time.

---

Awwww, poow wittwe me. Stop being a condescending dick.

Quote:

---

Originally Posted by digitalvision

It's going to be at least a decade until rider patterns shift enough to have impact. Not saying we shouldn't do it, but in business, you can't bet on the future like that - especially in a region so full of disappointments. Seen too many lost shirts betting on the maybe.

---

Oh, yeah. It would be terrible if we had a plan that looked forward more than a year. But, since ridership patterns will take forever to shift, well, too bad. We may have to lose some more buildings. We all know it's disappointing, but, we have no vision. Sorry. Fuck it.

Quote:

---

Originally Posted by digitalvision

Losing the penobscot would be a body blow to downtown and devastating.

---

But that's what lack of a long-term plan, as well as a plan that if we make downtown Detroit as flat and vacant as Troy was in 1955, we're assured success. So why complain when this is the natural outcome of our foolish plans and demolish-it-first strategy?

Thanks for playing.

What's your plan to fill the Penobscot with tenants? You're good with tossing out the words "we have to plan long-term," but the Penobscot issue is here-and-now.

What ideas do you have that the last three owners didn't?

And think quick, because the First National Building is probably following quickly on the Penobscot's heels.

DN,

I know you're pissed - we're all pissed at this possibility.

I said planning is a good idea - and it's a GREAT thing we've got forward looking plans for Detroit and the region. It's REALLY important and if the work was done 15 or 30 years ago, we wouldn't be in this fix. Better now than never. But we need to be realistic about what it's going to do.

Losing buildings will not be a function of what any one of us do - it's business conditions. It's the market. It's the fact we've been in a one-state depression. One of the things that can be a huge positive for the city is those buildings and whenever possible they should be preserved or torn down only when there's a replacement plan, and a real one.

If a building is not financially viable, it can't continue to stand save for a ward of the state.

And I say you're eulogy for what is yet to be destroyed is disingenuous nonsense. I'm sick and tired of people blaming the past, the market, the city, the suburbs. You know who is to blame? We are.

Quote:

---

Quote:
Originally Posted by digitalvision http://www.detroityes.com/mb/images/...s/viewpost.gif
Sorry to break your heart, Detroitnerd and others, but light rail is not the panacea - not for these problems. Not to mention, it's at least a couple years away AND only goes to Grand Blvd at this time.

Awwww, poow wittwe me. Stop being a condescending dick.

---

wow...Pot? Kettle? It's a legit point. There have been "serious" talks about "mass transit" in detroit for what...at least a decade? There have been at least 5 years of "real planning" and focus groups and what not about "light rail" up Woodward...and not much else beyond that. At the current pace are we any less than 5 more years from a shovel going in the ground for what is currently on the drawing board? I mean it's not like they're going to put the street cars back online. It's going to be a Woodward loop that, at best case, goes from downtown to 8 mile. At best case, even after what little is planned is put online, parking for tenants is still going to be an issue for much of the CBD for the long term.

No one is saying tear down the Penobscot, but the proposal was about the consolidation of tenants and the removal of the annex or the old Penobscot as a parking solution for the Penobscot and several other buildings struggling ot retain tennants. .

Quote:

---

Sorry to break your heart, Detroitnerd and others, but light rail is not the panacea - not for these problems.

---

Of course it isn't a panacea all by itself. But it's necessary if Detroit ever hopes to achieve a meaningful rebound.

On my way to work this morning I was thinking about how public mass transit in other well-functioning cities is regarded as a necessity, while private automobiles are viewed as a luxury. In Detroit, it is exactly the opposite; private automobiles are regarded as a necessity, while public mass transit is viewed as a luxury. That's some ass backwards type of thinking.

It is time to cut bait. It is time to "farm detroit". Tear it all down and start over. Run for mayor on not what you will do but what you won't do. You won't let "it" continue. You will tear down what is useless and not used. We all start over. It is 1701 all over again.

We farm the fields. We rebuild in the future. Right now we get rid of what is waste and not needed or utilised.

Quote:

---

Originally Posted by EastSider

I believe the main tower is worth the loss of the two smaller ones.

---

I am so glad I don't live in a city where the fate of a sold block of good architecture is contingent on supplying parking [[of all things!) just to make half of the buildings marketable.

Quote:

---

Originally Posted by wolverine

I am so glad I don't live in a city where the fate of a sold block of good architecture is contingent on supplying parking [[of all things!) just to make half of the buildings marketable.

---

Good architecture doesn't pay the bills, though, does it?

Quote:

---

Originally Posted by digitalvision

..... it's floor plans do not fit modern office needs nor does it's connectivity, and has some of the same maintenance issues the Book Tower had.....

---

How do other Art Deco era buildings remain viable today? Such as the Empire State Building, for exampe? How did they retro-fit these buildings?

Quote:

---

Originally Posted by wolverine

I am so glad I don't live in a city where the fate of a sold block of good architecture is contingent on supplying parking [[of all things!) just to make half of the buildings marketable.

---

Maybe if people like you did live here, the situation would be different?

Quote:

---

Originally Posted by bailey

Maybe if people like you did live here, the situation would be different?

---

Apples and oranges argument. More telling is the business office market, and who once was the tenants for these buildings.

I suppose that all these buildings once had tenants that did business here. I'd also suppose that there's a vast amount of lawyers, consultants, and other professionals that do business with either the City of Detroit, the federal and circuit courts, the county, DPS, among other civil entities.

If all of these entities were, as a conditon of doing business with the above entities, required to maintain and staff offices in the CBD, I'd be willing to bet that there would be a significant rise in occupancy. It's one thing to have a cash cow, quite another to starve the cow to death.

Or you'd drive more of the competent people away and we'd be left with people the caliber of Sam Riddle and Adolph Mongo.

Quote:

---

Originally Posted by digitalvision

......has no parking, it's floor plans do not fit modern office needs nor does it's connectivity, and has some of the same maintenance issues the Book Tower had.

---

Quote:

---

Originally Posted by Catman

How do other Art Deco era buildings remain viable today? Such as the Empire State Building, for example? How did they retro-fit these buildings?

---

This is a question I've often asked as well. In many cities, particularly Detroit, the conventional wisdom is buildings like the Book Tower & Penobscot are considered obsolete and non-competitive tear-downs because of their age, yet the Chrysler Building, Wrigley Building, GE [[RCA) Building , or even more amazingly, the Flatiron Building [[1902) and Woolworth Building [[1913) remain viable commercial properties. Somehow I doubt the tenants in these landmarks are lacking computer & phone infrastructure in the year 2009.

Obviously, these older buildings can be retrofitted. However, I surmise [[unlike Manhattan or Chicago) in a CBD like Detroit where real estate is hardly at a premium, the cheapest way to go is to implode and rebuild to a more realistic scale [[smaller) and with more current building standards.

I'm not sure I understand the issue under discussion.

Older buildings in a place like NYC can be retrofitted for modern needs because the market will support the necessary rents to pay for the upgrades [[while, of course, allowing for a healthy landlord profit).

In contrast, the Detroit market has low rents and high vacancy, and the high costs of upgrading will not come close to being covered by anticipated rents. Therefore, there are no major upgradings of older properties.

And, while lack of parking is a strong obstacle for older Detroit office buildings, in NYC no office building has parking, whether old or new. It just isn't an issue.

Additionally, because space is at such a premium in NYC, companies are just happy to find space that meets their needs. In Detroit, a company can pick from any building they desire, and in most cases will logically graviate to the nicest, most modern space.

Much ado about nothing.

The Penobscot is in great condition compared to much else downtown- it will be resold at a loss, and another businessman or corporation will take a chance on it. The price will just keep going down until it can be had for a couple of thousand bucks.

A couple of thousand bucks for a huge 47-floor office tower :eek:

I know plenty of people who pay "a couple of thousand bucks" in monthly rent! For small aparrtments! Maybe they should buy giant office blocks instead.

LOL!!

I was, naturally, exaggerating, but the price will come down to tooth-fairly levels. Didn't the Guardian Building sell for something like 4 million bucks recently?

Quote:

---

Originally Posted by Lorax

LOL!!

I was, naturally, exaggerating, but the price will come down to tooth-fairly levels. Didn't the Guardian Building sell for something like 4 million bucks recently?

---

I don't know, but I"m sure Ficano would love to tell you.

That trolley loop may not help the office market much, but it may help the residential market Downtown. I believe the Penobscots was being looked at for residential space, and residential space doesn't need nearly as much parking, and can sometimes get by with elevator garages, valet, or even none adjacent parking. Some residents are choosing [[or are forced) to not own a car, share a car, or rent space on the edge of the CBD for a cheaper price.

I don't know what the real world affects that loop will have on the residential market, but it is being sold as expecting to have a significant affect.

Anyway, I have no doubts that we will be losing more businesses and buildings in the coming years.

Doubtful the Penobscot could ever be a residential conversion.

It's floorplans are too big, and apartments obviously need windows.

You could only have super-long, narrow apartments.

And not sure what you mean by lack of need for residential parking. If these are market-rate units, there will be at least one parking spot per unit, and probably a lot more.

What the hell is with Detroit? Every other major city in the country manages to have a central core of old and new buildings without having to have a dedicated parking lot adjacent to each one of them. Even cities without good public transport.There are several parking decks within a block or two of the Penobscot. But, no, a beautiful building like the Penobscot, which would be a central civic landmark anywhere else, can't possibly be viable without its own parking lot [[despite having stood there without one for over 80 years).

Can't people here walk a couple of blocks, like people do in, say, every other major city on earth? Or does everyplace have to have valet parking next to the door so that no one is ever more than a couple of steps from their oh-so-precious vehicles, and no one is threatened with more than a couple of seconds of weather? They don't even have that in Anchorage. Does everyplace here really have to be modeled on the ideal of the suburban shopping mall? What the hell ever happened to our urbanness and our urban life?

Sometimes, just every now and again, I wonder why I came back to this stupid stuck in the '60s and '70s place.

Quote:

---

Originally Posted by EastsideAl

Can't people here walk a couple of blocks, like people do in, say, every other major city on earth?

---

Simple answer is , no. We are much to fat and lazy to do shit around here.

Eastside, I hear you!

This city, if it had alot more money, would waste every building that didn't have a parking lot. The mallification of America really caught on in Detroit, since it's the largest American city by pouplation and land mass without a decent regional mass transportation system.

Fat and lazy breeds fat and lazy.

And the Penobscot would make terrific apartments or condos, as would the Stott and Book Tower. Large, long units with banks of windows, probably four to a floor.

Quote:

---

Can't people here walk a couple of blocks, like people do in, say, every other major city on earth? Or does everyplace have to have valet parking next to the door so that no one is ever more than a couple of steps from their oh-so-precious vehicles, and no one is threatened with more than a couple of seconds of weather? They don't even have that in Anchorage. Does everyplace here really have to be modeled on the ideal of the suburban shopping mall? What the hell ever happened to our urbanness and our urban life?.

---

Of course it's not as simple as people being fat and lazy...you people can not be that dense can you?. And it's not a lack of wanting to be urban. If no one wanted Urban...the suburbs wouldn't be busy trying to re-create it in their little faux downtowns and "new urbanism' developments. The reality is NOT that people don't want urban-ness, the reality is they just don't want to deal with Detroit. These buildings aren't empty because people are lazy... it's the fact that the vast majority of the "market" for these buildings has de-camped for Southfield, Troy, or further out. The vast majority of the "money" left the CBD for lower taxes, shorter commutes from their employees' and clients' suburbancommunities, better services....and yes the added benefit of convenient and FREE parking from which one does not have to run a gauntlet of bums to get from one's car to where one is going. If Detroit wants to bring them back, there has to be a reason for them to come. Doing business in a high cost, low return, decimated urban core, with expensive parking relatively far from the door just not attractive...but more importantly, it's not attractive to the clients and customers.

Think about what historically populated these buildings.... lawyers [[not BIGLAW, but small, mid and solos) , accountants, manufacturing reps, doctors, dentists...etc. What possible business case is there for a CPA, Lawyer, Dentist or whatever to be in Detroit when he lives in Birmingham and his clients area all in Oakland County?

For example, for a long time my employer maintained two offices. One in it's "historic" home in the CBD [[where it was founded) and the other in a bland big beaver-esque office park. When the last of the old guard finally retired, the downtown location was closed as it was simply a drain and every year was staffed by fewer and fewer people BUT, the most important fact was; it serviced fewer and fewer clients.

Would I love to be working downtown still? of course. However reality is, clients dictate where we are to do business. And fewer and fewer were willing to put up with all the bullshit associated with coming downtown to conduct their business when they had no reason to.

Bailey has it 100% right. And I'm going to sound like a dick, but tough medicine is needed.

Businesses go where the clients go. Jobs go where the clients go. And clients do not want to come downtown. That's just the hard truth, after working downtown off and on for a decade and dealing with suburbanites coming down. It's HELL to watch, especially when you know it's not as bad as they think it is, or it's just outright inaccurate.

It's them checking out the window every 20 minutes to see if their car is stolen. It's refusal to go one block to go to the Thai place. It's demanding all meetings be at their office because they won't come down.

Some of it is logical, most is not from experience, but perception is reality and it will kill your business. It's killed many friend's businesses, even though they were really passionate, you have to go where the customers are. A friend of mine was forced to move to Southfield when a key client of his told him he would not hire his company anymore if he had to come down to work with them. [[BTW, if anyone thinks it's a race thing, it was a black-owned business with his biggest client being black). In short, he was out in 3 months. And his business has tripled in the last year.

Also, there's other points in the professional sector that some forget about. Women won't walk long distances in heels [[something many men forget); everyone doesn't like to pay $10-$20 to park, even if you pay their parking for them, the taxes are many times higher than the suburbs, and most of the business community is north of 696 now.

Bing has to get to work on the basics - the DEGC's/DDA's mission should be completely refocused to handling these basics [[I know, however, that in the past, city council has been obstructionist to the business community). Because if these basics are not taken care of, your incentives will only go so far, as shown. I think if those basics were taken care of, we wouldn't be facing the possibility of an empty Penobscot, the reality of demo'd Lafayette as well as other buildings on the precipice.

What works downtown are bars and restaurants and stuff related to the engines that are the sports venues or casinos, or residents. I WOULD do a well-planned one of those, because they have draws that support them. CVS's - basic services for the residents. If you want to invest downtown, that's where downtown is on the chain of development. Think about what a town of 3,000 people can support daily, and that's what you can do downtown with additional business for the stadia/conventions. There's a ton of business opportunity there. Unfortunately, those kinds of business don't fill skyscrapers.

Quote:

---

Originally Posted by digitalvision

Bailey has it 100% right. And I'm going to sound like a dick, but tough medicine is needed.

Businesses go where the clients go. Jobs go where the clients go. And clients do not want to come downtown. That's just the hard truth, after working downtown off and on for a decade and dealing with suburbanites coming down. It's HELL to watch, especially when you know it's not as bad as they think it is, or it's just outright inaccurate.

It's them checking out the window every 20 minutes to see if their car is stolen. It's refusal to go one block to go to the Thai place. It's demanding all meetings be at their office because they won't come down.

---

You can't sound like a dick and offer tough medicine and then in the next paragraph write about how "it's not as bad as they think it is, or it's just outright inaccurate."

The sea of auto glass that routinely appears on Congress tells people it really is that bad.
The stench of piss and shit drifting from alleyways tells people it really is that bad.
The stale, mildewy moldy smell wafting from long-abandoned buildings tells people it really is that bad.
The squad of deputies outside Bert's on Broadway tells people it really is that bad.
The 20+ cars stolen in the last 30 days in the CBD tell people it really is that bad.
The sea of larceny icons on the CrimeView map tell people it really is that bad.

Quote:

---

Originally Posted by bailey

Of course it's not as simple as people being fat and lazy...you people can not be that dense can you?

---

Yes they can!

The same thing that's been going on in the City of Detroit is the same thing going on with the penobscot. As residents are leaving, the remaining residents/tenants are being charged more and more to make up for the loss of the residents that left.

As time goes on the remaining residents/tenants start to leave because they can't afford to keep making up the difference while getting nothing back in return and there are options for newer buildings with better amenities, free parking being one of them, available to them.

Meanwhile, that ends up putting a larger and larger burden on the residents/tenants that have stayed until they eventually leave as soon as they are able. Same old story.

Quote:

---

Originally Posted by kraig

The same thing that's been going on in the City of Detroit is the same thing going on with the penobscot. As residents are leaving, the remaining residents/tenants are being charged more and more to make up for the loss of the residents that left.

As time goes on the remaining residents/tenants start to leave because they can't afford to keep making up the difference while getting nothing back in return and there are options for newer buildings with better amenities, free parking being one of them, available to them.

Meanwhile, that ends up putting a larger and larger burden on the residents/tenants that have stayed until they eventually leave as soon as they are able. Same old story.

---

Sorry kraig... but I don't agree with that analog. Anyone who has an ironclad lease can't just be charged more due to making up differences because other tenants left.

We need a building triage. Similar to a battlefield triage, an order precendence needs to be reached as to what should be saved and in what order, based on a formula that considers such things as aesthetics, history, potential reuse, and I am sure you all could think of some others.

If a building is high enough in the triage queue but has no current use, like the Stott or the Book Tower would be, then public measures protect and preserve them [mothball] for a day when they can be retranslated.

Many of these buildings are architectural marvels and works of art. Buildings with that much art and quality of materials will never be made again. Information age business life is too short and de-localized. We did not have a royalty and palaces. These are our palaces. Smashing them down is like pounding a Bernini sculpture to bits.

There has to be some way to at least save the best and, alas, allow for the rest to sink or swim on their own. Otherwise all will be allowed to disintegrate, fall victim to scavengers and become financially impossible to recover.

Quote:

---

Originally Posted by Gistok

Sorry kraig... but I don't agree with that analog. Anyone who has an ironclad lease can't just be charged more due to making up differences because other tenants left.

---

No, but when it's time to renew their leases, the management is raising the rates. Rather than pay the higher rates, a lot of the tenants are choosing to go elsewhere.

Something dramatic is happening... check out this newer article, buried in the business section. Either there's a huge drop or some funny business. If there actually is this kind of drop as outlined below, we're looking at a total collapse, probably due in large part to the economy or lack of service [[because although tenants may not pay in higher rents when folks leave immediately until they renew, they pay in less services).

http://www.detnews.com/article/20090...60333/1001/biz

Quote:

---

"Historically, rents in the building average $650,000 a month, according to court records.
In May 2009, the building only brought in $99,000, according to an income and expense statement cited by Capmark. "

---

That's HUGE. That means they've lost almost all their revenue, if true, if that's all they're getting, that place is shutting down soon. It's expensive to keep that beautiful girl open.

Quote:

---

"As of about four months ago, the building, at 645 Griswold, was 63.1 percent leased, according to CoStar Group Inc., a commercial real estate research and information service."

---

Running a building at 37% or so vacancy is really tough.

I was told a much higher occupancy rate [[I don't remember exactly, but it was around 80%) two years ago. So either a) there's lying along the line [[entirely possible), b) there's funny business c) they're in a death spiral or d) some combination thereof.

In the world I see - you are stalking elk through the damp canyon forests around the ruins of New Center. You'll wear leather clothes that will last you the rest of your life. You'll climb the wrist-thick kudzu vines that wrap the Brodrick Tower. And when you look down, you'll see tiny figures pounding corn, laying strips of venison on the empty car pool lane of some abandoned superhighway.

-Tyler Durden [[well, sort of...)