Packard Plant owner eyes bids for historic downtown buildings

[innercitydoc]

Book Tower and Building included. This will be interesting.


http://www.crainsdetroit.com/article/20150228/NEWS/303019974/to-chase-the-animal-pack

[Scottathew]

So he wants to buy a bunch of buildings that aren't for sale?

I'll be more excited when he can show some real progress at the Packard site and he's trying to buy more stuff that's actually for sale.

Maybe he just wanted some free press?

[Lowell]

So he wants to buy a bunch of buildings that aren't for sale?

I'll be more excited when he can show some real progress at the Packard site and he's trying to buy more stuff that's actually for sale.

Maybe he just wanted some free press?

There's an old business saying. "Everything is for sale always". Those are all troubled properties running overheads, so I would guess the owners would listen to proposals.

I will agree he is great at press attention and having met him briefly, he has a charismatic presence. He could do a stand in for the 'world's most interesting man' guy in those beer ads, right down to the accent. If he can build the backers, who knows.

But I'm with you on the show-me on Packard.

[animatedmartian]

According to that article, construction [[presumably not including the clean up that's already occurred/is going on) won't start until August after he secures financing. This guy already has a proven record in two other countries. He's no Matty Mouron and I'd say just give him the properties already.

[Khorasaurus]

So he wants to buy a bunch of buildings that aren't for sale?

I'll be more excited when he can show some real progress at the Packard site and he's trying to buy more stuff that's actually for sale.

Maybe he just wanted some free press?

The article says the Fisher and Kahn are for sale. The Fisher is an interesting situation, because Detroit Public Schools owns their space within it in as a condo and I'm not sure how much revenue the owners of the rest of the building get from them. Maybe a little money for maintenance. It may be hard to make money on because of that.

I'm sure the owners of the Book would sell, considering it's vacant, and while there have been murmurs of them shopping around for investors for a rehab, they may prefer to have Palazuelo take the lead and maybe they'll stay on as an equity investor/minority owner or something.

And finally, if he offers Apop more than the $5 million he paid for the Penobscot, I'm sure he'll sell in a heartbeat. Apop does't seem to care about the actual building. He'd take the cash and run.

I'm also skeptical about the Packard, but he seems committed to Detroit, and I suspect he would do well with occupied but underperforming buildings like the Penobscot, Fisher, and Kahn, and if he's willing to renovate the freaking Packard Plant, the Book Tower should be a breeze.

Now, if he'd only go after the Stott and get it away from DDI...

[rex]

i think hes batshit crazy for taking on a project like the packard.

[dmike76]

I'm willing to give him more time on the Packard. He's already spent some money cleaning it up and putting security out there. On the Packard Plant Project's FB page, they had a recent post about starting to rehab the executive administration building. It says that they are in the 'pre-development' stage. Whatever that means. It says 'stay tuned for exciting news'.

[davep]

It's certainly better than before and at least something is being done.

[mikeg19]

From the Packard pics, it looks like they are making progress on the cleanup of the area in a big way. But I can't imagine his taking on that project as well as the Book Building and Tower. Those are both ground up rehabs that are going to cost a ton of money and time themselves. I could see a play to go after the Fisher or Penobscot due to the fact that are occupied and he may have renovations in mind, but nothing compared to what his current venture is at the Packard.

But hell, if this guy can wine and dine investors into financing the projects, more power to him. Curious to see where this goes.

P.S. anyone wanna paste the article in this thread? I don't have a subscription to Curbed.

[Dbest]

P.S. anyone wanna paste the article in this thread? I don't have a subscription to Curbed.

I take it you meant Crains? If you Google search the title of any Crains story it will give you a link to the complete story page, no membership necessary. Gistok talked about it once, I tried it, works like a charm..

Here's the title of this story:

Developing a strategy: Packard Plant owner eyes bids for historic downtown buildings

copy and search google to see what I mean...

[ABetterDetroit]

Didn't he need a extension to come up with the 400k for the Packard plant? He can raise millions for these buildings but he wants to live out there in that ruin? Have to wonder what his investors will be thinking when they come to see him at the Packard...

[Jayp213]

--side note-- Whatever happened to that German club mogul that wanted to buy fisher body 21?Lol

[Vic01]

P.S. anyone wanna paste the article in this thread? I don't have a subscription to Curbed.

Long article, but here's the key part -
"Over breakfast at the Inn on Ferry Street in Midtown, Fernando Palazuelo slides salt and pepper shakers across the table like chess pieces. They are a representation of his Detroit real estate strategy.

Yes, he says, he's getting ready to make a series of big moves.

The new owner of the 3.5 million-square-foot Packard Plant on the city's east side has much broader ambitions for his portfolio in the city, which first took notice of him in 2013 when he bought the shuttered plant — all 47 buildings, all 40 acres — for a mere $405,000 at a Wayne County tax foreclosure auction.

Palazuelo is a native of Spain who has been developing historic but dilapidated sites in Peru since losing everything in the recession. He said in an interview with Crain's last week that he plans to make offers to buy five of greater downtown's most storied buildings: the 255,000-square-foot Book Tower and adjoining 260,000-square-foot Book Building; the 996,000-square-foot Penobscot Building; and the Albert Kahn Building and Fisher Building in the New Center Area, which total 925,000 square feet.

But whether he's actually successful in buying them is anybody's guess.

While Palazuelo said he has private equity money available to him as investment partners, he's publicly pursuing properties that are mostly not actually for sale.

Only the Kahn and Fisher are on the market. Miami Beach, Fla.-based LNR Properties Inc. took title of the buildings following a default on a $27 million mortgage by the previous owner.

The registered agent of the previous owner, FK Acquisition LLC, is Farbman Group CEO Andy Farbman. Farbman Group had handled property management and leasing, but that contract was awarded to Farmington Hills-based Friedman Integrated Real Estate Solutions LLC last month after the ownership change.
The Book Tower, at 1265 Washington Blvd., and the Book Building, at 1249 Washington, are owned by Milan, Italy-based Akno Enterprises, which purchased them in 2006 for $4 million, according to CoStar Group Inc., a Washington, D.C.-based real estate information service.

Attempts to reach Akno through attorneys with ties to the company were unsuccessful last week.

Toronto-based Triple Properties Inc. bought the Penobscot, at 645 Griswold St., for $4.8 million.

Palazuelo acknowledges a difficult journey ahead. And he has both selling points and some marks against him in his developer résumé, including a corporate bankruptcy in Spain.

"I'm sure that our first offers will not be accepted," he said. "But we are going to chase the animal."

That hunt will be tough for the Penobscot, whose owner says the building is not for sale. Steve Apostolopoulos, co-founder and managing partner of Triple Properties, said the Penobscot is being marketed for leases only.

"We are not considering offers at this time. If he'd like to rent an office from us, he's more than welcome to rent an office," Apostolopoulos said.

Palazuelo said financing for the greater downtown purchases would come in part from a large Lima-based private equity firm. He declined to name the firm but said it has more than $500 million in assets".

[night-timer]

--side note-- Whatever happened to that German club mogul that wanted to buy fisher body 21?Lol

You're talking about Dimitri Hegemann, a German entrepreneur who also created the massive Tresor nightclub in Berlin.

[[Tresor - German for 'treasure')

Detroit and its aesthetic has a real appeal to many music fans, party animals and young folk.

In regards to Packard, I'd buy the Book Tower, the Fisher or the Kahn downtown well before the Packard on the Eastside. Either way, at least Fernando's obviously not a guy looking for a 'quick buck'.

[mikeg19]

I take it you meant Crains? If you Google search the title of any Crains story it will give you a link to the complete story page, no membership necessary. Gistok talked about it once, I tried it, works like a charm..

Here's the title of this story:

Developing a strategy: Packard Plant owner eyes bids for historic downtown buildings


copy and search google to see what I mean...

Much appreciated sir. Thank you.

[mikeg19]

After reading the article, yea, this guy is ambitious, I'll give him that. But I'm skeptical on financing these projects. Maybe he has the right idea by spreading out the massive Packard redevelopment over 10-20 years, going piece by piece rather than going gangbusters and trying to knock it all out at once. But his estimates on that are around $500M. The Book Tower/Building, according to DiRita in the article, might be in the neighborhood of $150-$200M. I don't know how much money charisma can garner, and this guy seems to have a lot of it, but were talking close to a Billion dollars in capital investments for these things to come to fruition. International investments are great, as long as they are willing to act on them [[Looking at you DDI and Triple Properties). Time will tell with this guy, but it's exciting to hear the mention of these other buildings and ideas he has.