The Detroit-based auto supplier has been looking for a buyer for the complex for more than a year. (Detroit News file photo)
American Axle & Manufacturing Inc. said Friday that it has sold its former 108-acre Detroit manufacturing complex to California-based Industrial Realty Group LLC, which plans to redevelop the land for “industrial purposes.”
An entity comprised of owners Industrial Realty Group and Industrial Commerce Ltd. in Ohio bought the property for an undisclosed amount, said Stuart Lichter, president and chairman of Industrial Realty Group, a real estate development and investment firm that buys, develops and manages commercial and industrial real estate property. It has more than 100 properties in 25 states and owns more than 80 million square feet of space, according to Industrial Realty Group’s website.
“We hope to build it into a thriving little industrial park,” Lichter said in an interview. “We think it’s a wonderful location and a good market. Hopefully in the short-term you’ll see buildings going up.”
The Detroit-based auto supplier has been looking for a buyer for the complex for more than a year. American Axle said as part of its sales agreement, finalized Thursday, it will continue to demolish about 1.9 million square feet of manufacturing space in Detroit and Hamtramck. Demolition began last summer and is expected to wrap up mid year.
American Axle said it will keep about 360,000 square feet of manufacturing space near its headquarters, which will remain. American Axle’s Director of Investor Relations Chris Son said in an email that the company is developing plans for that old manufacturing space but has not made a final decision. Currently that space is being used for storage.
“We are proud of the massive economic redevelopment AAM has accomplished on the DMC site since our company was founded in 1994,” American Axle said in a statement. “We look forward to successfully transitioning the property to IRG for the benefit of all community stakeholders and welcoming whichever companies/organizations join us in the city of Detroit.”
Lichter said the purchased property includes two buildings that will remain — one leased by American Axle and another by a logistics firm.
Industrial Realty Group owns leased industrial properties in Detroit and in other Michigan locations. He said he thinks something manufacturing related will end up on the former American Axle site, which he said has a lot of possibilities given its location.
“We’re getting a lot of interest,” he said. “We are talking to people already.”
The property and buildings originally were listed for sale for $18.5 million. Colliers International represented the seller in the transaction.
American Axle closed its manufacturing part of its Detroit campus in February 2012, affecting a few hundred workers. In 2008, that facility housed about 2,000 workers and was the location of an 87-day strike that ended when the union agreed to wage cuts.
The auto parts supplier said it remains “steadfastly committed” to keeping its world headquarters in Detroit — the glass structure just east of the Chrysler Freeway — and the six manufacturing and engineering facilities it operates in Michigan. The supplier, founded in 1994 when investors bought five General Motors plants, employs more than 2,000 people in Michigan, with about half in metro Detroit.
Some of the manufacturing space being razed dates to 1917, when General Motors Corp. built Detroit Gear & Axle Plant 2 for Cadillac. That site was first used to produce airplane parts during World War I and eventually housed nine separate auto plants.
Last summer, American Axle said it believed the property was suited for a “state-of-the-art logistics facility” and that it planned to keep 540,000 square feet of manufacturing space in two plants, which it used for storage and leased to a logistics company.