Comerica leaving Tower to consolidate at 411 W Lafayette

[downtownguy]

From today's Crain's...

Comerica Inc. moving out of Comerica Tower; building’s naming rights in play

By Daniel Duggan
Comerica Inc. will move its remaining Detroit employees out of the building on Woodward that bears its name, taking on a project to renovate a building it owns on Lafayette Avenue in Detroit.

The move is a blow to the Comerica Tower at 500 Woodward Ave., where Comerica occupies 285,000 square feet, but it also puts the naming rights for the building in play. Losing that space will put the building at 71 percent vacant.

Comerica, which moved its headquarters from Detroit to Dallas in 2007, said it will spend $18 million to renovate the 550,000-square-foot building at 441 W. Lafayette and move to the building by 2012.

Of the roughly 1,500 employees in Detroit, roughly 800 are in 411 W. Lafayette and the rest at 500 Woodward, said Thomas Odgen, president of Comerica-Michigan.

In 2007, the company had 2,500 employees in both buildings, according to past Crain’s reports.

Ogden said the move is a chance to invest in a downtown building, consolidate employees in one place, and save money.

“We’ve had multiple facilities in Detroit for a long time, so this is a chance to bring all the employees into one building,� he said. “Through that we expect internal efficiencies, better communication and a lot of improvement.�

The building opened in 1971 for Manufacturer’s Bank, which Comerica acquired.

Given its older layout, Ogden said Comerica will complete a new layout of the building, renovate the offices and purchase new furniture. Architecture and construction firms have not been selected yet, he said, but the goal is to use local firms.

Moving employees out of leased space and into a company owned building is a perfect real estate play, said Steve Morris, executive managing director and principal in the Farmington Hills office of Newmark Knight Frank.

Comerica said it will spend $18 million to build-out the 550,000 square feet, which works out to $32 per square foot, he said, which is the typical cost for a tenant to improve its space for a new lease.

“That’s a no-brainer,� Morris said. “They’re spending zero for the space since they own the building and then spending the typical amount for tenant improvements. Plus they’re putting money into an older building, which is good for the city.�

The move is a blow to the Comerica Tower building at 500 Woodward, also called One Detroit Center.

The 957,000-square-foot building is currently 41-percent occupied according to Bethesda, Md.-based CoStar Group.

The building was completely occupied when it opened in 1991, and had relatively stable occupancy until 2002 when it was rocked by the downfall of consulting firm Arthur Andersen, which left its 100,000 square foot office in the building in August 2002.

Also in 2002, the Michigan Supreme Court left the building and 25,000 square feet vacant, but in 2005, the Boston-based law firm Foley & Lardner LLP leased 40,000 square feet.

The biggest exodus, however, started at the end of 2006 when accounting firm Ernst & Young gave up 85,000 square feet to move to One Kennedy Square. Advertising firm J. Walter Thompson then gave up 150,000 square feet to move to Dearborn.

The building is majority owned by New York-based iStar Finanical. A message was by left by Crain’s for the firm’s public relations department, but that message was not returned.

If there is any positive effect of the move, it is that questions are now answered about whether the naming rights for the building will be available said Sam Munaco, a member of the leasing team for the building and an associate broker and principal with Southfield-based Signature Associates.

Naming rights to a building are sometimes included with the building’s largest lease.

“A positive effect is that it frees up the naming rights for a large prospective tenant in the future,� he said. “We are currently talking to a number of prospective tenants that have been asking about the naming rights, and until now, we weren’t able to give them an answer.�

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This could be a good thing. 411 gets filled up with what remaining Comerica employees they have in Deroit, and the Comerica Tower/One Detroit Center could attract a new tenant looking for a impressive signature building. Also, for those of us that were afraid Comerica would drop the other shoe and move out entirely, an investment of this magnitude may suggest otherwise.

[Lorax]

I hope they don't destroy the mid-century modern design of the 411 space- it's massing, exterior decorative concrete panels, the amazing bird sculpture in front of the lobby window, etc, define this space as the architect intended.

Do what they may to the office space and mechanicals, just leave the exterior and lobby intact, and it will be a win/win.

[Patrick]

Been in the works for a while now. I have some excellent photos of the construction of 411 and its panels. The lobby sucks and was ruined years ago.

[Lorax]

Been in the works for a while now. I have some excellent photos of the construction of 411 and its panels. The lobby sucks and was ruined years ago.

Patrick, can you post them? I was in town three weeks ago and noticed the bird sculpture was still hanging in the front window, is it still there?

[Matt]

Well, Channel 7 fucked it up. They reported the story but the entire time, they were showing pictures of the Lafayette Building.

[Patrick]

yeah or shoot me your email and I will send em...

[DetroitZack]

I would like to see them as well so maybe you could post them on here.

[Traveller1]

Though it's still sad that Comerica is continuing to downsize I suppose that it's the best thing for the company to do at this point. It's not "healthy" for a company to have excess lease space that they aren't even using anymore.

Seeing the Comerica Tower possibly becoming 71% empty would be very tough for Detroit. It actually surprising to hear that Comerica Tower is only 42% occupied today, that seems very low.

It would be nice to see an "outside" company interested in expanding move into the tower.

[wolverine]

I'd rather have that tower suddenly go vacant than any other downtown. It's new class A office space. It will be in demand once the economy bounces back. Better off this be vacant than any other nearby building. I'm not concerned, it will fill back up in time.

[Patrick]

411 needs a makeover bad. I know...I just worked there. However, the floors that I worked on were half full with thousands of feet of space. Parking, like everywhere down there, sucks. Contractors had to pay for their own parking and Comerica didnt even throw them a bone.

[MichMatters]

I'm actually not as put-off by this announcement as I thought I'd be [[I'd always expected Comerica's remaining workers to leave the tower, anyway). Now, instead of leasing space, they'll be in their own building filling an empty half of downtown.

Patrick, we'd all enjoy seeing your pics. It's a very interesting looking modern building.

[K-slice]

+1 for the pics.
And I agree that Comerica Tower [[as its still known) going vacant for a while wouldnt be as bad as any other building down there. Even the worst landlord in the city couldn't afford to let that building fall to the scavengers and urban explorers.

[hudkina]

Could this be the chance Bank of America has of entering the downtown market? They should buy up the naming rights and consolidate a good chunk of their metropolitan offices into this building.

[Johnlodge]

Quicken Tower?

[[ducks)

[MichMatters]

Quicken could have moved in long ago if the occupancy rates stated are true. If they didn't then, I don't see why it'd be more attractive, now.

[Meddle]

Sounds like it's 'back to the future' for Comerica [[Detroit Bank & Trust) who were based in that building for decades.


As for BOA, they need to go belly up and disappear from the world forever.

[Lorax]

BOA, CITI, and Wells Fargo can all go away as far as I'm concerned. Time to return to community banking.

[Detroit500]

Wouldn't it be great to get Flagstar and Bank of America down there?

[313WX]

BOA, CITI, and Wells Fargo can all go away as far as I'm concerned. Time to return to community banking.

They can take Chase with them.

[artds]

41% capacity? yikes! It might actually be in the 30s by the time Comerica moves out in two years

It's scary to think about what the occupancy rate would be if the law firms [[Foley, Dickinson and Clark Hill) hadn't decided to locate there rather than the suburbs like most other industries. They seem to be the only thing keeping that building alive.

If the US government ever decides to move the federal court out of downtown, then Comerica Tower is going to be worth less than the Pontiac Silverdome.

[Patrick]

I'll have to attach some pics later on.

[Meddle]

Wouldn't it be great to get Flagstar and Bank of America down there?

No.


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Are we talking about the old DB&T building/tower or the old Manufacturer's Bank building? There was some kind of fancy cafe in the basement at one time
; might have been called Money Tree?

[Gistok]

Originally 411 W. Fort was the Manufacturers Bank HQ, and then they moved the HQ to Tower 400 of the RenCen in the late 70s. Floors 38 & 39 were the executive offices and Board Room of Manufacturers. Later GM took this space over as their executive offices. Floor 38 has a 2 story atrium [[floors 38 & 39), which I believe is unique to this tower [[among the 4 towers). Manufacturers even had their name atop Tower 400, which was the only "named" tower among the 4.

Then Manufacturers and Comerica merged.

Comerica had their HQ at 211 W. Fort. They then wanted to move to the Ford Auditorium site where Cesar Pelli designed a 30 story office tower for them.... but the city told them NO on that site.... perhaps they learned their lesson on riverfront obstruction with the RenCen.

So the merged Comerica/Manufacturers ended up in One Detroit Center. Now Comerica wants to downsize to the original smaller Manufacturers HQ.

[Meddle]

Some of this is starting to come back to me. It's been 15 years or so since I was down there. The U.S. Bankruptcy Court had just moved into the DB&T building, but I can't remember what else was in there.

GSA and the U.S. Courts wouldn't allow a move out of the city's core; it's an unwritten rule. There was some talk of the U.S District Court taking over the Lafayette building and some talk of building a new courthouse if they could find the property nearby. They even talked about building across the street, but realized they needed the parking lots as well.

[Patrick]

411 Lafayette images....