Free Press Building Back up for Sale -- for $16 million!

[Lowell]

They gotta be dreaming on this one [The Fisher and Kahn were bought for less] but one has to give snarky kudos to Shanghai-based DDI for snapping this and the Stott up in 2013, not putting a penny in either plus leaving the Stott destroyed and tenantless].

The are already up nearly $4mil over what they paid for both from flipping the Stott to Gilbert. They must feel they are in no hurry.

Anybody know what the Chinese for chutzpah is?

Former Detroit Free Press HQ building, owned by Chinese investment group, hits market for $16 million

DDI Group paid $4.2 million at auction for the 302,000-square-foot building on West Lafayette in 2013

[SpartanDawg]

these guys are the WORST and hope the city council bans that company from ever buying a building downtown again.

gilbert has said in the past he will buy buildings to keep them out of the hands of bad owners... wouldn't be surprised if he does the same here

[Danny]

Buy that building now Dan Gilbert buy buy buy!!!

[DetroitBoy]

The Chinese are smart business people and the US has handed them the keys to the kingdom. They devalued the yuan to make their goods less expensive and imports more expensive.

Not surprised they announced this right at the beginning of the 2015 Homecoming. Maybe someone attending will buy it? Maybe Donald Trump will buy it and it can become the Trump Tower Detroit!

[Junjie]

They gotta be dreaming on this one [The Fisher and Kahn were bought for less] but one has to give snarky kudos to Shanghai-based DDI for snapping this and the Stott up in 2013, not putting a penny in either plus leaving the Stott destroyed and tenantless].

The are already up nearly $4mil over what they paid for both from flipping the Stott to Gilbert. They must feel they are in no hurry.

Anybody know what the Chinese for chutzpah is?

Former Detroit Free Press HQ building, owned by Chinese investment group, hits market for $16 million

DDI Group paid $4.2 million at auction for the 302,000-square-foot building on West Lafayette in 2013

Really too bad. Hoped [[perhaps unrealistically) at the time DDI bought it that this showed others were starting to see value in investing in the city. But at this point I think we can count it as a win just to get the building out of their hands.

Since you asked, the phrase you're looking for is "tamen de danzi hen da / 他们的胆子很大". They have a lot of gall.

[MSUguy]

At a little over $50/sq. ft. they might be able to pull that off. The Wurlitzer sold for around $30, Gilbert paid $58 for the Book Tower. They're probably aiming a little high, but it's not unreasonable.

[3WC]

If those people get a dollar more than they paid for the Free Press building it will be evidence of the greater fool theory at work.

There is no way that Gilbert paid $18 million for the Stott, or worse, $30 million for the Book. Nonsense. Don't believe everything [[or, anything?) you read or hear when it comes to downtown Detroit real estate sales.

[[Gilbert dropped out of the auction.com bidding for the Stott at $9 million. Public record. If he'd had wanted the building he's have bought it. He knew the identity of the other bidder and wanted to bid them up to the point where the price was uneconomical under any scenario. I believe he knew they'd dump it eventually and he'd pick it up for a fraction of what they paid. That's what he did but that's sure not the story on the street regardless of who put the story [fairy tale] out there.)

[Hypestyles]

Bizarre. There need to be contracts that bind buyers to at least keep up maintenance on properties when they buy, and not just let them deteriorate. That's not good stewardship, regardless of whatever free-market ideology some folks love to worship.

[mikeg19]

I love how the article states that "they were really close to starting work on the building but the market was just too hot not to sell." Eat my dic*. This was a plan all along, not drop a penny on these buildings and sell for a profit.

It pisses me off that they swooped in and outbid Gilbert on both the Stott and Freep buildings initially, reportedly for not much more than he offered. Two years pass, and they sell the Stott to him at a profit [[after putting no money into it and barely keeping it open). Now they're gonna do the same thing and try to rip him off again. We all know he will swoop in and save the day, but it's ridiculous.

As much as I'd like to see outside/international investors come in and contribute to the revitalization efforts, if were gonna have to deal with this crap, it's not worth it. If Gilbert had won these two buildings two years ago, they'd almost assuredly be completely renovated and occupied right now. Two years wasted.

[davewindsor]

If those people get a dollar more than they paid for the Free Press building it will be evidence of the greater fool theory at work.

There is no way that Gilbert paid $18 million for the Stott, or worse, $30 million for the Book. Nonsense. Don't believe everything [[or, anything?) you read or hear when it comes to downtown Detroit real estate sales.

[[Gilbert dropped out of the auction.com bidding for the Stott at $9 million. Public record. If he'd had wanted the building he's have bought it. He knew the identity of the other bidder and wanted to bid them up to the point where the price was uneconomical under any scenario. I believe he knew they'd dump it eventually and he'd pick it up for a fraction of what they paid. That's what he did but that's sure not the story on the street regardless of who put the story [fairy tale] out there.)

Gilbert dropped out of the Stott auction at $9m probably because he thought he was getting into a bidding war with a phantom bidders like Palazuelo did with the crazy doctor from Texas and Bill Hults from Chicago [[who lost his $200K deposit) to upbid the Packard auction. The crazy doctor would have probably just kept bidding the price up if anyone countered, even though Palazuelo was the only serious bidder. If Palazuelo really "wanted" the Packard, he could have spent $10m buying the Packard, but Palazuelo didn't want to get into a bidding war even though he may thought it was worth more than the $400K he paid for it. Palazuelo was right.

Same with the Stott. Gilbert could have spent a lot more than $18m getting into a bidding war with the Chinese investors if he really "wanted" the Stott. It doesn't mean the Chinese investors wouldn't forfeit their bid at $18m+ like the crazy doctor did over the Packard did if Gilbert got into a bidding war and they ended up with it. It makes more sense to give the other bidder who's starting a bidding war the difference after the auction is over for two reasons 1) they don't bid it up anymore and 2) there may be several phantom bidders that get cancelled and the winning bid goes to the next serious bidder, which could have been Gilbert at $9m.

Gilbert took at chance stopping at $9m that higher bidders might get cancelled. The Chinese investors had the money. But, then again, Gilbert could have been stuck paying a lot more than $18m if he got into a bidding war with the Chinese investors. The $18m paid is a matter of public record. That's what he paid for it. Call the tax assessors office if you don't believe it because the new property taxes are virtually always assessed at the new purchase price if they are higher than the previous assessment, so the tax assessment office will know how much was paid.

[MSUguy]

If those people get a dollar more than they paid for the Free Press building it will be evidence of the greater fool theory at work.

There is no way that Gilbert paid $18 million for the Stott, or worse, $30 million for the Book. Nonsense. Don't believe everything [[or, anything?) you read or hear when it comes to downtown Detroit real estate sales.

[[Gilbert dropped out of the auction.com bidding for the Stott at $9 million. Public record. If he'd had wanted the building he's have bought it. He knew the identity of the other bidder and wanted to bid them up to the point where the price was uneconomical under any scenario. I believe he knew they'd dump it eventually and he'd pick it up for a fraction of what they paid. That's what he did but that's sure not the story on the street regardless of who put the story [fairy tale] out there.)

So we shouldn't believe county land records? FYI land sales are a public record. You can believe the sky is green that doesn't make it true.

How much difference can a year and a half make in downtown Detroit real estate when it comes to property values? Sometimes, as much as $6 million.
Dan Gilbert paid about 50 percent more for the David Stott Building and Clark Lofts Building in May than their previous owner, a Chinese investment firm, did in fall 2013, according to Wayne County land records.Shanghai-based DDI Group spent $12.05 million buying the buildings: the 210,000-square-foot David Stott at 1150 Griswold St. for $9.4 million and the 36,000-square-foot Clark Lofts for $2.65 million at 35 W. Grand River Ave. in separate online auctions.

hat translates into $48.98 per square foot.
Gilbert, founder and chairman of Detroit-based Quicken Loans Inc. and Rock Ventures LLC, paid $18 million total for the two buildings, which are in need of substantial renovations.
The David Stott cost Gilbert $14.9 million while the Clark Lofts cost $3.1 million, or $73.17 per square foot, according to warranty deeds filed with Wayne County.
http://www.crainsdetroit.com/article/20150722/BLOG016/150729976/gilbert-pays-18-million-for-david-stott-clark-lofts-buildings

[Zads07]

I'll bet Gilbert buys it, but not the asking price and the city council needs to ban DDI from ever buying a property in Detroit again.

[Richard]

I'll bet Gilbert buys it, but not the asking price and the city council needs to ban DDI from ever buying a property in Detroit again.

What are they doing different that has not been already going on with speculation in the city for the last 20 years anyways ?

Any kind of ban would have to be across the board which would include many locals also.

[Zads07]

What are they doing different that has not been already going on with speculation in the city for the last 20 years anyways ?

Any kind of ban would have to be across the board which would include many locals also.

Detroit is undergoing a revival, a renaissance, and Dan Gilbert is leading the way. The last 20 years are different from the last five years, since Gilbert moved into the city. It's clear that their intentions were to buy, sit and sell, not revitalize. This is a new Detroit, where things should be bought to be renovated. I don't think I'm alone in believing this.

[mikeg19]

Detroit is undergoing a revival, a renaissance, and Dan Gilbert is leading the way. The last 20 years are different from the last five years, since Gilbert moved into the city. It's clear that their intentions were to buy, sit and sell, not revitalize. This is a new Detroit, where things should be bought to be renovated. I don't think I'm alone in believing this.

I do agree that the landscape has changed from 20 years ago with regard to investment. You'd be hard pressed to find many international or national investors wanting to put up capital in Detroit, even downtown, knowing the return on investment might be several decades away. Fast forward to the past couple years and it's much different, with investment coming in from many directions. I think the main difference is that 25 years ago, nobody even realized when someone bought a building in Detroit. With the amount of pub Gilbert has garnered since coming downtown, even the littlest transactions are dissected.

But any kind of ban on DDI, or any other entity for that matter, purchasing buildings would be impossible. It would be nice to see a clause in purchase agreements that required an investment in the property within a certain time frame or a forfeiture of the property. I'm not sure if that's even a legal option, but something to think about.

[Richard]

I do agree that the landscape has changed from 20 years ago with regard to investment. You'd be hard pressed to find many international or national investors wanting to put up capital in Detroit, even downtown, knowing the return on investment might be several decades away. Fast forward to the past couple years and it's much different, with investment coming in from many directions. I think the main difference is that 25 years ago, nobody even realized when someone bought a building in Detroit. With the amount of pub Gilbert has garnered since coming downtown, even the littlest transactions are dissected.

But any kind of ban on DDI, or any other entity for that matter, purchasing buildings would be impossible. It would be nice to see a clause in purchase agreements that required an investment in the property within a certain time frame or a forfeiture of the property. I'm not sure if that's even a legal option, but something to think about.

City could not really do any kind of ban on the private transaction.

But there is a tax credit use deadline as outlined here.

http://www.freep.com/story/money/201...ings/26195987/

If you look at the history of this transaction the previous owner applied and was approved for the grandfathered tax credits,he then maybe misrepresented the sale or it was a miscommunication on the buyers part that he did not include the credits in the sale.

If you have a building and receive tax credits for it normally they are used as a incentive or extra carrot to dangle in front of the potential buyer,or it makes the property worth more or easier to sell.

Then he sues the buyer for a dysfunctional elevator that he knew was bad to begin with.

It was a clusteruck from the start.Plenty of blame to go around.

In a city that is hard to pull comps from it may be better to up bids in a auction because a higher sales price increases values of other properties.Its a game but you just need to be able to purchase if you lose it.

[rex]

interesting. Friend of mine works at Quicken and Sunday night she told me her group was moving into the Old Free Press building sometime this week.
Plan must have changed

[Richard]

That's a plus,its a shame that for a city that has so many historic examples of buildings that are so abused.

[ndavies]

interesting. Friend of mine works at Quicken and Sunday night she told me her group was moving into the Old Free Press building sometime this week.
Plan must have changed

The Quicken people are moving into the Old Detroit News building , Not the Free Press building.

Quicken had bought the Detroit news building. They are fixing it up and moving people in. The Free Press had moved into the News building many years ago. Now both the Free Press and the News have Moved out of the old Detroit News Building and into the Old Federal Reserve building.

[3WC]

Believe what you wish about the prices they say Gilbert paid for those buildings.

If you do, then you must also believe that Gilbert doesn't understand the first thing about real estate economics. Believe that he's just going around buying buildings for the fun of it because that's God's way of telling him he's got way too much money.

The headlines should read: "The tulip craze has just hit downtown Detroit real estate."

[southen]

With all of the hard evidence you have provided it is hard not to agree with you....

[Dbest]

Believe what you wish about the prices they say Gilbert paid for those buildings.

If you do, then you must also believe that Gilbert doesn't understand the first thing about real estate economics. Believe that he's just going around buying buildings for the fun of it because that's God's way of telling him he's got way too much money.

The headlines should read: "The tulip craze has just hit downtown Detroit real estate."

So if it's such an easy scam he's pulling, why didn't other movers and shakers in the metro already do it then?

If there's no risk involved the bloodsuckers would have been all over it, IMHO.

If anybody is pulling some scam, it is DDI. Go back to the original thread on here about DDI and you will see they are the ones playing shell games. Ask Canada about DDI and their subsidized pie in the sky promises. FUNNY SHIT.

[mwilbert]

So if it's such an easy scam he's pulling, why didn't other movers and shakers in the metro already do it then?

If there's no risk involved the bloodsuckers would have been all over it, IMHO.

If anybody is pulling some scam, it is DDI. Go back to the original thread on here about DDI and you will see they are the ones playing shell games. Ask Canada about DDI and their subsidized pie in the sky promises. FUNNY SHIT.

3WC isn't saying he is pulling a scam. He's saying that the reported prices are not correct--that if Gilbert paid that much for the buildings he massively overpaid, and he doesn't think Gilbert is an idiot, so he doesn't think he actually paid that much. I don't know if he is right, but $30 million for the Book complex seems awfully high to me.

The counter-argument is that the price recorded with Wayne County for the Stott [[along with the other building included in that deal) was actually $18 million, which was the announced price. I don't know what is correct, but it isn't a scam. At worst, it is hyperbole.

[Gistok]

3WC isn't saying he is pulling a scam. He's saying that the reported prices are not correct--that if Gilbert paid that much for the buildings he massively overpaid, and he doesn't think Gilbert is an idiot, so he doesn't think he actually paid that much. I don't know if he is right, but $30 million for the Book complex seems awfully high to me.

I was thinking the same thing about the Book complex... $30 million?? If the Fisher/Kahn Buildings [[in great shape) only went for $12 million, how can the Book complex go for that high? Especially if [[at least) $70 million needs to be sunk into it to bring it back to usable condition?

These "listed sales" prices seem awfully high....

[erikd]

these guys are the WORST and hope the city council bans that company from ever buying a building downtown again.

gilbert has said in the past he will buy buildings to keep them out of the hands of bad owners... wouldn't be surprised if he does the same here

City council does not, and should not, have the authority to ban certain investors from buying property in the city.

The biggest problem with this type of land speculation is due to a major flaw in the Headlee Amendment.

When a land speculator buys property at rock-bottom prices, their property taxes are forever based on that initial low value, and can only be increased by very small annual percentages. This results in land speculators buying in at very low prices, and then sitting on valuable property for years, even decades, while they pay almost nothing in property taxes, and fail to develop their property and reject reasonable market-rate purchase offers in lieu of holding out for an even bigger windfall.

Michigan needs to revise the Headlee Amendment to exclude speculative investment from normal property tax increases. The Headlee Amendment was created and passed to prevent homeowners from being taxed out of their property due to rising property values. The intent of the Headlee Amendment is valid, and it does protect Michigan homeowners from being taxed out of their homes when property values increase, but it also creates a huge tax loophole for land speculators.