Banker: Penobscot Building in default

[bigtreble]

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.
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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

[Detroitnerd]

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

[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?

[313WX]

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?

[Detroitnerd]

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

[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!

[kraig]

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?

[Detroitnerd]

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

[crawford]

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.

[Detroitnerd]

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

[bailey]

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.

[crawford]

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".

[Detroitnerd]

And then we can call in Adamo! Yay!

[bailey]

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.

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....

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.

[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?

[digitalvision]

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.

[Detroitnerd]

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

[EastSider]

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?

[bailey]

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?

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.

[Bobl]

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!

[Detroitnerd]

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

[bailey]

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.

[EastSider]

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.

[Detroitnerd]

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 ...

[staticstate]

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?