Southfield Town Center Possibly Up For Sale

http://i.imgur.com/LLKwbUU.jpg

Town Center owner weighs 4 purchase offers
http://www.crainsdetroit.com/article...urchase-offers


The owner of the Southfield Town Center is considering offers to buy the landmark office complex, in default on its mortgage with $138 million owed.

New York City-based Blackstone Group LP is considering four offers from local and out-of-state buyers for the 2.2 million-square-foot Class A office complex, north of 10 Mile Road between M-10 and Evergreen Road, according to real estate sources.

Those offers are between $160 million and $170 million, sources say. Blackstone purchased the five-building complex in 1999 for $270 million, according to real estate information service CoStar Group Inc.

According to commercial mortgage backed securities data from Bloomberg LP, Blackstone is unable to pay the balance due on a $235 million mortgage on the property originated in 2004 by Irving, Calif.-based Greenwich Capital Financial Products Inc. The loan was transferred to Wells Fargo Bank NA for special servicing.

A loan modification letter originally stipulated that Blackstone pay the balance by Nov. 5, 2012. The complex was appraised this summer at $177.5 million, 45 percent below a 2004 appraisal of $321 million, according to the Bloomberg loan data.

According to a real estate source, an out-of-state buyer that has never purchased real estate in metro Detroit is currently the highest bidder.

The complex is 32 percent vacant, according to Bloomberg. The Southfield Class A office market had a 26 percent vacancy rate during the third quarter, according to data provided by the Southfield office of Newmark Grubb Knight Frank.

Matt Farrell, executive principal/partner of Bingham Farms-based Core Partners Associates LLC,said the Southfield Town Center offers good amenities such as the Westin Hotel — which would not be included — and restaurants on site. It also has a campus-like setting.

"Those are all big, big pluses," Farrell said.

But there are some drawbacks.

"The downside, potentially, is that the newer culture, the younger technology-based firms are looking for that warehouse/potentially downtown-like setting that gives them walkability," Farrell said.

According to CoStar, the largest tenants are GlobalHue Inc., with 109,000 square feet; Fifth Third Bank, 106,000 square feet; and AlixPartners LLP, 63,000 square feet.

Denver-based HFF Inc. is marketing the complex and has hired Southfield-based NAI Farbman to represent Blackstone locally in the sale. The Southfield office of CBRE Inc. is responsible for leasing the property.

Kristen Murphy, associate director of marketing for HFF, would only confirm that the complex is for sale.

NAI Farbman, through a spokeswoman, declined comment.

Among large office complexes in metro Detroit, the Southfield Town Center, built in 1975, is second in square footage only to the 5.5 million-square-foot Renaissance Center in total size.

Southfield Town Center is a turkey. All the disadvantages of the suburbs [[unwalkable, anonymous, depressing, totally car-dependent) combined with all the disadvantages of the city [[difficult parking, large, inflexible spaces, proximity to sketchy areas).

80's office space is the worst. Too old to appeal to users who prefer modern space, not old enough for a gut renovation or for lovers of vintage. Who likes that tacky, brassy 80's look, like in a Dallas soap opera episode?

Southfield's strategy to make a walkable center on Evergreen by the Civic Center would seem to be smack on for fixing the walkability, entertainment and dining issues. There is plenty of newer housing, not the "dated" stuff that seems to horrify the youngsters. There are midday concerts every Thursday during summer, too.

Oh great, another lifestyle center dreamed up by a suburban city. It's like putting a torn up band-aid on a giant, gushing wound. Call me when the works.

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Originally Posted by Bham1982

Southfield Town Center is a turkey. All the disadvantages of the suburbs [[unwalkable, anonymous, depressing, totally car-dependent) combined with all the disadvantages of the city [[difficult parking, large, inflexible spaces, proximity to sketchy areas).

80's office space is the worst. Too old to appeal to users who prefer modern space, not old enough for a gut renovation or for lovers of vintage. Who likes that tacky, brassy 80's look, like in a Dallas soap opera episode?

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Well put. I have always dubbed that complex as Southfield's Naissance Center. [They were too young to have a Re-naissance. In this case the naissance or birth was pretty much doomed in the cradle. The dehumanizing feel of that place was somewhere between barren and creepy, especially on weekends when the parking lots emptied out.

At the time it was seen as further dooming downtown office occupancy, much like the nearby Northland had earlier been attributed to the demise of downtown retail.

They did not foresee the changing generational attitudes would turn things to their disadvantage.

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"The downside, potentially, is that the newer culture, the younger technology-based firms are looking for that warehouse/potentially downtown-like setting that gives them walkability," Farrell said.

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The interior reminds me of Logan's Run... near brutalist, not quite as bad as the Ren Cen, but not quite as nice as Fairlane.

I agree that the accessibility is not good for neither car, nor ped, or bus user. But I disagree on the area being sketchy unless that is a veiled reference to all of the wanna-be architects across the freeway. :)

I don't think it is a possibly up for sale, you don't get 4 bids on something unless you want a competition. It also tells me that these building may not be as bad as some of you are portraying them. Someone wants them; just not you.

Tear that shite down!!!

I don't get it, I had an office in 2000 until 2 years ago. Rent increases got insane - you couldn't talk to those people. That place was always SPOTLESS and it ran like a Swiss watch. I really liked it there, I was sorry to leave the place.

Softailrider, Southfield in general is decent if you want quality office space and don't care about your surroundings. The issue for developments like Southfield Town Center is how to do you stop the slow decay that sets in the second you build up just about any location in Metro Detroit? The owner has to be worried about the noticeable difficulties many of the office buildings along 9 Mile are currently facing. You don't think that rot will continue to spread?

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Originally Posted by nain rouge

Softailrider, Southfield in general is decent if you want quality office space and don't care about your surroundings. The issue for developments like Southfield Town Center is how to do you stop the slow decay that sets in the second you build up just about any location in Metro Detroit? The owner has to be worried about the noticeable difficulties many of the office buildings along 9 Mile are currently facing. You don't think that rot will continue to spread?

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The thing about those buildings is that they were built in Southfields growth and beginning prime which was between mid 70's to late 80's. Mind you Northland area was fine during those times too.

OK, shiny new stuff was successful when shiny and new. I'm not sure what you're getting at. Expand.

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Originally Posted by nain rouge

OK, shiny new stuff was successful when shiny and new. I'm not sure what you're getting at. Expand.

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You were just talking about decay right after development. I was just saying they built it [[applies to Troy too) expecting that the suburbs will continue to be the dominant models of the future.

Of course. You'd be hard-pressed to find a neighborhood that was originally planned for obsolesce in a few decades. Even the homes in Brightmoor last a very long time if properly maintained.

Most assume the trend of the moment is the wave of the future. That's the problem.

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Originally Posted by nain rouge

Of course. You'd be hard-pressed to find a neighborhood that was originally planned for obsolesce in a few decades. Even the homes in Brightmoor last a very long time if properly maintained.

Most assume the trend of the moment is the wave of the future. That's the problem.

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True. It will be interesting to see what the metro area will look like in 30 years.