The sales price of the former Detroit Free Press building was revealed in public records recently and it shows the skyrocketing cost of downtown properties — even one that’s been empty since 1998.
An entity affiliated with Dan Gilbert’s Bedrock Detroit paid $8.4 million for the former newspaper building in August 2016, according to city documents released earlier this month. The massive, historic building at 321 W. Lafayette Blvd. is one of the more recent acquisitions by Bedrock, which has purchased more than 90 downtown properties since 2011.
Comparing the $8.4 million sale of the Free Press building to earlier Bedrock purchases downtown shows the boom now going on in “greater downtown” — a 7.2-square-mile area that includes the central business district.
Bedrock bought the Free Press building from DongDu International Group, or DDI, based in Shanghai, which purchased the building in 2013 for $4.2 million from Florida-based Luke Investments. That Florida group bought the building in 2008 for $1.6 million.
“In the past four years, prices have more than doubled,” said Dennis Bernard, president of Bernard Financial Group Inc., which is one of the state’s largest mortgage banking firms. Since 2011, Bedrock Detroit and its affiliates have accumulated landmark skyscrapers, blocks of Woodward and at least 17,000 parking spaces. They often paid rock-bottom prices.
An early Bedrock purchase was the First National Building, an Albert Kahn-designed structure on the southeast edge of Campus Martius. In 2011, Bedrock paid $8.1 million for the 25-story building, which was struggling with occupancy but was a working building. That price was about $300,000 less than the price of the long-vacant Free Press building. The First National building has more than twice the square footage of the Free Press building, according to CoStar, a commercial real estate database.
Another example of the changing sales scene was the 2012 sale of the 29-story skyscraper, One Woodward, at Woodward and Jefferson that was designed by Minoru Yamasaki, who also designed New York’s World Trade Center. One Woodward’s purchase price — $8.35 million — was slightly less than the Free Press building.
One thing hasn’t changed. Bedrock often spent tens of millions of dollars in renovations after buying a property.
It’s expected to cost $69.6 million to convert the Free Press building into a residential tower with ground-floor retail and two floors of offices. The 276,183-square-foot building is “functionally obsolete,” according to documents prepared by Bedrock officials.
The interior finishes have been stripped, the elevators must be replaced, a new roof is needed and new windows must be installed, Bedrock officials said recently. Construction is expected to begin this summer. The Art Deco gem, designed by famed architect Albert Kahn, could be reopened in 2020.