Fisher, Albert Kahn buildings in Detroit up for auction
Detroit — The landmark Fisher and Albert Kahn buildings in Detroit's New Center area are going up for public auction June 22-24 to be sold as a package.
The financial struggles of the historic buildings that led to the auction in some ways reflect the struggles of the New Center neighborhood, just north of Wayne State University campus along Woodward Avenue. The area is still waiting to be part of the accelerating revival of downtown and Midtown, several commercial real estate analysts said.
"Let's hope that auction is a big spark," said John LaTessa, senior managing director of CBRE, a commercial real estate firm. "At this point, the area hasn't seen the resurgence of Midtown and downtown."
The two buildings will be offered for sale on the website auction.com. A minimum bid has not yet been set, said Barry Swatsenbarg, national director of investment for Friedman Integrated Real Estate Solutions, which now manages the buildings for the Miami company.
The Fisher Building, built in 1928, is at 3011 W. Grand Boulevard in the heart of New Center. Its golden tower is one of the best known images in the city's skyline. The ornate, 30-story building is designed in an Art Deco style, which is evident in its lobby finished with mosaics, frescoes, marble and a three-story atrium. The building is home to the Fisher Theatre, which has the designation of national historic landmark.
The Fisher Building has 635,000 square feet of space and is 82 percent occupied, according to CoStar, a commercial real estate database. The WJR radio station is based there and boasts of broadcasting from the building's golden tower. Other major tenants include the Girl Scouts of Southeastern Michigan and New Detroit Inc. In 2002, the Detroit Public Schools bought five floors of office condo space and about 7,000 square feet of concourse space in the Fisher Building for $24.1 million. Any potential sale of the building will not affect that ownership, said DPS spokeswoman Michelle Zdrodowski.
The eight-story Albert Kahn Building, at 7430 Second, is 51 percent occupied, according to CoStar. The building's namesake is the famed architect and the firm he established, Albert Kahn Associates, remains one of its key tenants.
New Center was a kind of corporate campus for General Motors for most of the 20th century. The company left in the 1990s, relocating to the Renaissance Center downtown. The old General Motors Building—now called Cadillac Place—is occupied by the State of Michigan.
The economy of the New Center area is dominated by the Henry Ford Health System, the Detroit Public School system, and state employees in Cadillac Place.
The College for Creative Studies also has a large presence in the former Argonaut building.
The auction comes after the owner defaulted on a $27 million mortgage more than two years ago. The entity that defaulted on the mortgage was FK Acquisition LLC. The registered agent for FK Acquisition is Andy Farbman, who is CEO of real estate firm Farbman Group in Southfield.
After the default, a Miami firm, LNR Property, Inc took the title of the buildings.
With the construction of the M-1 Rail and the growth of Midtown, many analysts say New Center area is ready for a rebound that could lure potential buyers. But many major investors of downtown, such as Dan Gilbert's Bedrock Real Estate Services, haven't ventured into New Center to buy key buildings.
"New Center has struggled, but in the next few years, most expect it to go through the same renaissance that downtown and Midtown is now seeing," said A.J. Weiner, executive vice president in the Detroit office of JLL, a commercial real estate service firm, in a recent Detroit News interview.
The sale of those two buildings comes after a number of iconic downtown buildings have been purchased and are now renovated, Weiner and other commercial real estate analysts said.
"I would say the potential for these buildings may be more positive with the news of a sale and the end of an ownership that ran into financial difficulties," Weiner said.
While it's been reported Packard Plant owner Fernando Palazuelo is among the interested buyers, a representative for the Spanish investor said Wednesday that may no longer be true.
"We are aware of the upcoming auction date," but a decision whether Palazuelo will make a bid hasn't been finalized, said Kari Smith, director of development of the Packard Plant, the former auto facility on the east side.