It’s not just Dan Gilbert’s Bedrock that wants to buy big downtown buildings. A top-notch skyscraper on West Jefferson near Cobo Center was just bought by a national developer headquartered in Southfield. The empty Free Press building is under contract by a group led by a local entrepreneur. The neo-gothic Buhl Building is believed to be under contract by an out-of-state firm.
The three structures are among the dwindling number of big buildings currently for sale in Detroit’s central business district — “big” as in at least 100,000 square feet of space. If the trio of sales go through, it leaves only three other big downtown buildings on the market. In fact, the total number of downtown buildings of any size on the market is a dozen, according to CoStar Group Inc., a national commercial real estate database.
That is a dramatic turnaround, and the low number can be attributed to the arrival of billionaire Dan Gilbert in 2010. That’s when Gilbert, founder of Quicken Loans Inc., moved the online mortgage firm downtown from Livonia. Since then, Gilbert’s Bedrock has gone on an uninterrupted shopping spree of downtown real estate, accumulating more than 90 properties, the vast majority in the central business district.
“Before Dan arrived, you had a whole lot of choice downtown, there were a lot of assets for sale,” said Howard Schwartz, who owns Howard Schwartz Commercial Real Estate in Farmington Hills.
“Now, there is a modest amount of inventory downtown, and it’s getting more finite. It’s an incredible accomplishment,’’ the veteran of Metro Detroit development said. “But there’s always been more than one major player in the downtown property scene, and the latest sale and potential sales proves that.”
The sale that is now official is the purchase of 150 W. Jefferson, a 25-story “Class A” structure just west of Cobo Center. The building’s main tenant is the law firm Miller Canfield. Southfield-based Redico purchased it for an undisclosed price. In 2003, the building sold for $93.8 million, according to public records.
A Redico spokeswoman said the company wouldn’t comment on the sale until Wednesday. Redico is a national real estate development, construction and property management firm. In 2006, Redico built One Kennedy Square, a mixed-use commercial building at Campus Martius.
Beyond downtown, Redico was also behind the Gateway Marketplace at Eight Mile and Woodward. That retail project attracted the first Meijer store to Detroit.
The other two downtown deals — for the former Free Press and the Buhl Building — have not been sealed, according to several sources familiar with the potential sales.
Earlier this year, the Shanghai-based owners of the Free Press building accepted an offer to sell for an undisclosed price. The former newspaper building at 321 W. Lafayette is “under contract,” according to CoStar. “Under contract” means the owners have agreed to sell, but the contract has not been finalized. The historic structure has been vacant since 1998. The potential buyer is a Metro Detroit-based entrepreneur who has the backing of several other investors, according to sources familiar with the discussions.
In an earlier interview with The Detroit News, Bedrock co-founder and CEO James Ketai said the Buhl Building, at 535 Griswold, was under contract to be sold and that Bedrock was not involved.
The Buhl is on the southwest corner of Griswold and Congress, near the Penobscot and Guardian buildings. The Buhl’s main tenant is SMART, the suburban bus system. It has a total of 89 tenants, according to CoStar.
The 27-story building, and an adjacent 652-space parking garage, is currently owned by an entity linked to Heico Co. in Chicago. The owners had no comment. In 1998, the owners bought the Buhl and the parking garage for $34.5 million, according to public records.