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Lansing-Based Developer Contracts the Linda Dresner Building

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Ron Boji, head of the Lansing-based Boji Group, has put the Linda Dresner Building in Birmingham under contract for an undisclosed amount. Boji has letters of intent from two national retailers. Although he isn’t disclosing who the retailers are, one of them will occupy the first floor of the Dresner building and the other will occupy the Maplewood Building he purchased last year. Boji Group will relocate its headquarters to the second floor of the Dresner building while continuing to maintain a presence in Lansing.

Hard Rock Affiliated Hotel is Coming to Kalamazoo

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The former Gibson Mandolin-Guitar Manufacturing site is being redeveloped under the REVERB by Hard Rock brand. Plaza Corp. Realty Advisors, Inc. and Dora Hotel Co. are partnering to bring the new hotel to the site at 225 Parsons St. in Kalamazoo. With a long history of respecting historical elements during  its redevelopments and renovations, Plaza Corp. will maintain some historic parts of the 103-year-old property. The new hotel will include a gym, bar, brewery, restaurant, banquet facility, auditorium and museum. Construction and renovation are expected to be complete in fall 2023.

A $150 Million Asking Price For Detroit Parcels . . . Stunning

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Three properties on the Detroit Riverfront have been listed for a total of $150 million, 15 times the price the owner paid in 2015 and 2016 when he purchased them. Owner Michael Shaya arrived at the price based on the properties’ “potential,” stating that “The price is commensurate the scale and size that can be built on these properties, which is in the millions of square feet.” Experts are skeptical that he will get his asking price.

Houghton Rezoning Requests Meet Different Results

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The Houghton City Council considered two rezoning requests along the Houghton Canal Road. The council approved a request from JRG Development to rezone Houghton Canal Road property from single family residential to community business. However, they denied a similar request by Isle Royale Seaplanes. Council members and residents have concerns about noise pollution, and interruption to and accidents with residential recreation vehicles in the canal. Environmental concerns were also cited.

Weekly Brief – March 1, 2021

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This week’s discussion is about change. Although it is hopelessly cliche, the only constant in the real estate marketplace is change.

In past weeks, I have discussed the change that will be caused by the decline of bricks and mortar retail (especially malls), the rise of cannabis-related uses, the decline of video stores, and the long-term impact of electric and autonomous vehicles.

This week brings several stories about further changes. In Farmington Hills, we see a brand new hotel development quickly pivoting to senior housing. Also in Farmington Hills, we see vacant industrial space being redeveloped into multifamily housing.

At the national level, we see L Brands shifting its Bath & Body Works store mix away from mall locations. L Brands is also continuing to see its store count for Victoria’s Secret, another mall retailer, decline. And near Kalamazoo, we have another mall that is about to fail. All of these mall locations will be the subject of reuse.

Change is constant in real estate.

 

Farmington Hills Hotel Pivots Due To The Pandemic

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The Farmington Hills’ Holiday Inn and Suites, NW Detroit, is shifting its focus. Due to the pandemic, hospitality and restaurants have taken a beating. Southfield-based Group 10 Management is converting the hotel (which was opened in 2018) into senior independent living quarters. 76 apartment units would be created from 133 hotel rooms in the current hotel layout. The company has kept two other properties in the same location open as hotels as there is a need for extended-stay facilities.

Crossroads Mall in Portage $77M Underwater, Deed-In-Lieu Possible

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The Crossroads Mall in Portage, Michigan (near Kalamazoo) has recently been valued at $22.6M. Unfortunately, the mall has $100M in mortgage debt. The owner is currently in discussions with its lender about a deed-in-lieu. Although stories about the decline of the regional mall are all too common, the decline of Crossroads has been stunning, as it was valued at $152M as recently as 2013.

In addition to the square footage covered by the mortgage, the mall is home to a (vacant) Sears store, as well as JC Penney and Macy’s anchors.

As mentioned in a recent Weekly Brief, the mall is dead.

Bath & Body Works Shifting Stores To Off-Mall Locations

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Retailer Bath & Body Works, which saw a surge in sales due to the COVID-19 pandemic, is planning to simultaneously open 49 off-mall locations, while closing 40 mall locations, in 2021. This will essentially keep the store count level but will shift stores away from malls to freestanding locations.

Mall Retailer Victoria’s Secret Closing Up To Fifty Stores In 2021

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Victoria’s Secret, a brand of L Brands, intends to close up to 50 stores in 2021. This is after the closure of 250 stores in 2020. L Brands continues to look for a solution to its Victoria’s Secret problem, including spinning the brand off to a private equity firm.

Old Detroit Lions Offices Make Way for Godfrey Hotel

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The old Detroit Lions’ administrative offices, located at in Detroit’s Corktown neighborhood on Michigan Avenue, will be demolished to make way for a Godfrey Hotel. The 227-room, $74 million project will be the 5th Godfrey Hotel in the country. The hotel will contain a restaurant, bar, ballroom, and rooftop café. Construction is expected to take 18 to 20 months and is a joint venture of Oxford Capital Group and Hunter Pasteur Homes.