12:00 PM
Newmark Grubb Knight Frank (NGKF) Capital Markets announced it has completed the sale of the Travelers Tower I & II buildings in Southfield, the Detroit metro area’s largest office submarket. An investor group led by Time Equities Inc. of New York purchased the 790,000-square-foot, Class A office complex from an affiliate of Lehman Brothers Holdings Inc. (Lehman) after winning out over a number of competing bidders.
“This is a gateway event signaling that out-of-town capital is once again interested in Detroit,” said Larry Emmons, a senior managing director in NGKF’s Capital Markets Group in Detroit. “We took the buildings to market right around Thanksgiving, and received nine offers within weeks.”
NGKF offices in New York and Detroit collaborated to secure the listing from Lehman and then market the trophy asset. In Detroit, Mr. Emmons worked with Senior Managing Director Patrick Shannon of the Capital Markets Group, Daniel Canvasser, a senior managing director in office leasing and sales, and Fred Liesveld, managing director of NGKF’s regional office. NGKF President Jimmy Kuhn led a team in Manhattan that included directors David Colen and Bill Lee.
Mr. Canvasser headed leasing of the Travelers buildings for Lehman, increasing occupancy from 30 to 50 percent in a 24-month period with 230,000 square feet in new leases and tenant expansions.
“A primary selling point for the Travelers towers is their prominent, central location off the Walter P. Reuther Freeway,” Mr. Canvasser said. “Lehman has invested more than $10 million in this project since it took over the property in 2010, and companies have responded by moving here in a flight to quality and value.”
Southfield has enjoyed several consecutive quarters of growth in its office tenant base, fueled by an influx of technology companies and expansions within the automotive industry. As the third largest Class A office project in the area, the Travelers buildings will continue to increase occupancy as the market recovers, Mr. Canvasser predicts.
“The Travelers towers acquisition is a great opportunity for us to expand our presence in the submarkets of Michigan. We have experience working with office properties like this one in multiple markets across the nation and know we are in a position to add value and stabilize the property,” said Francis Greenburger, chairman of Time Equities Inc. “We plan to make improvements as necessary to preserve the long term usefulness of the property and maintain its Class A office status.”
“We have a very stable owner buying this property that can make competitive deals,” Mr. Canvasser said.
NGKF’s Capital Markets Group took the asset to market without an asking price, letting the market guide the bidding, according to Mr. Shannon.
The transaction underscores the effectiveness of NGKF’s large and collaborative structure, Mr. Emmons observed. In light of the great leasing gains at the property, Mr. Canvasser brought in the New York-based Capital Markets team to pursue the sales listing with Lehman, which it was awarded in October 2012.
“This was a great example of the way NGKF teams collaborate across the country,” Mr. Kuhn said, referring to a unique platform that gives clients access to local expertise in tandem with some of the top marketers and capital strategists in the industry. “In this instance, teaming the Detroit office up with our New York Institutional Investment Group proffered the optimal results.”
Chief tenants in Travelers Tower I, at 26555 Evergreen Road, include automotive firm Faurecia and Fox Sports. In Tower II, at 26533 Evergreen Road, major tenants include the corporate headquarters of R.L. Polk & Co., and Action Benefits.
About Newmark Grubb Knight Frank
Newmark Grubb Knight Frank is one of the world’s leading commercial real estate advisory firms. Together with its affiliates and London-based partner Knight Frank, Newmark Grubb Knight Frank employs more than 11,000 professionals, operating from more than 340 offices in established and emerging property markets on five continents.
With roots dating back to 1929, Newmark Grubb Knight Frank’s strong foundation makes it one of the most trusted names in commercial real estate. Its integrated services platform includes leasing advisory, global corporate services, investment sales and capital markets, consulting, program and project management, property and facilities management, and valuation services. A major force in the real estate marketplace, Newmark Grubb Knight Frank serves the local and global property requirements of tenants, landlords, investors and developers worldwide. For further information, visit www.newmarkkf.com.
Newmark Grubb Knight Frank is a part of BGC Partners, Inc. (NASDAQ: BGCP), a leading global brokerage company primarily servicing the wholesale financial and real estate markets. For further information, visit www.bgcpartners.com.
About Time Equities Inc.
Founded in 1966, privately-held Time Equities Inc. (TEI) has been in the real estate investment, development and asset & property management business for more than 40 years. With properties in 26 states, four Canadian provinces and Germany, the TEI portfolio consists of approximately 23.4 million square feet of residential, industrial, office and retail property. For further information visit www.timeequities.com.