HFZ, Redico Run to Detroit’s Rescue
- Jun 29, 2015
Redico and HFZ Capital Group have teamed on the acquisition of the Fisher Building, a 28-story iconic office building in Detroit, and the neighboring Albert Kahn Building, an 11-story commercial property, with a $12.2 million winning bid at an auction.
Both buildings were put up for auction on Auction.com after suffering with vacancies and falling into foreclosure.
The two properties are located in the heart of Detroit’s New Center district and were designed by noted architect Albert Kahn. A corridor connects the two with granite cladding, and decorative metal grille work.
“HFZ has a long standing reputation and expertise in revitalizing historic properties, many of which have been designed by the great architects of their time,” Adam Feldman, who handled the acquisition for HFZ, said in a company statement. “Adding the Fisher Building and the Albert Kahn Building to our portfolio is consistent with our strategy of renovating or repositioning some of the country’s greatest historic landmarks and architectural gems.”
In addition to the two historic buildings, the sale included more than 2,000 parking spaces in two parking structures and three surface lots.
The joint venture plans to transition the buildings into a mixed-use development, with a mix of office, retail, residential, and entertainment uses. It will also maintain its 2,000 seat Fisher Theatre known as the home of “Broadway in Detroit.”
“We are very pleased to have won the auction, along with our partners, and are excited to be a part of Detroit’s continued revitalization,” Dietrich Knoer, Redico’s CIO, told the Detroit Free Press. “With the recent activity Downtown and in Midtown, along with the imminent arrival of the M-1 rail, New Center development is the next step in Detroit’s comeback. We are pleased to have put together a local group of development partners with strong capital support.”
According to Colliers International’s 2015 Q1 Detroit Office Market report, big deals are leading to one of the more healthy Detroit office markets in decades.
The report shows Metro Detroit’s office market began the year on a strong note, with overall positive absorption of 451,713 square feet, a decrease in the vacancy rate from 15.5 percent to 15.3 percent, and a modest rise in quoted rents, from $17.80 to $17.99 per square foot. Throughout the market, a lack of new construction since 2008 has given Metro Detroit’s landlords some breathing room.