Gilbert buys Detroit's Compuware Building
- Compuware stays; Meridian Health plans to relocate 400 employees by spring
- Real estate analyst: Buy "hallmark purchase" for Gilbert
Quicken Loans Inc. chairman Dan Gilbert has agreed to become co-owner of the building housing his Detroit company's headquarters with Meridian Health, giving him another landmark downtown property while supplying cash to the building's former owner Compuware Corp.
Gilbert's Bedrock Real Estate Services and Detroit-based Meridian Health snapped up the 15-story, one million-square-foot Compuware Building for an undisclosed sum in a purchase agreement announced Monday.
The sale is believed to be in the $100 million to $150 million range by some commercial real estate analysts, and it ensures a smooth transition for one of the downtown's most high-profile buildings.
The sale follows the September sale of the Detroit technology firm Compuware to a San Francisco private equity firm.
Bedrock said in a statement Monday that it plans to partner with Meridian Health, a health maintenance organization and pharmacy benefits manager, on the acquisition of the wedge-shape, glass-wall structure next to Campus Martius.
Compuware headquarters is expected to occupy about 130,000 square feet while Meridian launches its new corporate headquarters there, taking five floors across about 330,000 square feet, Bedrock said Monday. Meridian plans to relocate 400 employees in Detroit by spring and expand to 2,000 by 2019, according to a statement.
"The Compuware building has served as the nucleus for 21st century Detroit for more than a decade thanks to the vision of Peter Karmanos and the Compuware team's commitment to transform downtown Detroit into a dynamic, high-tech corridor," Gilbert said in a statement. "We look forward to partnering with Meridian and the Cotton family, who are significant stakeholders in Detroit's ongoing resurgence, to ensure that two of Michigan's fastest growing and new economy companies will remain and grow their employee bases in downtown Detroit for the long-term future."
Sean Cotton, chief administrative officer at Meridian Health, added: "This partnership made the most economic sense of any opportunity we explored. The Compuware building is the perfect setting for our employees to work together under one roof. The central business district provides exactly the kind of family-oriented work environment we were looking for."
Gilbert has been buying up Detroit buildings for the past three years. Among the largest structures is the One Woodward building, where Fifth Third Bank is moving its regional headquarters from Southfield.
It made sense for Gilbert to buy the Compuware building, where he has his own office, especially considering the significant number of buildings he has purchased in Detroit in recent years, said Frederick Liesveld, managing director of the Detroit office of commercial real estate firm Newmark Grubb Knight Frank.
"It is probably his finest building," Liesveld said Monday night. "And it is right in the center of everything he has purchased in downtown Detroit. It is the most modern building he has bought. It is a great development."
Compuware's new owner is capitalizing on its real estate holding, and now the Compuware building is with its rightful owner, he said.
"It is a hallmark purchase," Liesveld said, "and one that Gilbert needed to make."
Compuware, which moved into its Detroit headquarters in 2003, has played a prominent role in downtown revitalization. Karmanos, who co-founded Compuware in 1973 and was its former chairman and CEO, was a major supporter in moving the company headquarters from Farmington Hills.
Compuware employs about 1,200 workers in Detroit and about 3,000 worldwide.
CEO Bob Paul stressed Monday that the building sale was to "best leverage our assets in achieving sustainable, long-term success for our company" and "in no way diminishes our current or future commitment to the city of Detroit and its revival. ... We're extremely proud of the leading role we have played in Detroit's ongoing turnaround. Looking forward, we will continue to support the community and invest in the city's rebirth, including the M1 rail project and other important initiatives."
Quicken Loans will occupy an additional floor and add 60,000 square feet. Bedrock will oversee management, leasing and daily operations of the building.
The Plante Moran firm recently opened an office on the third floor of the Compuware building, which also has eight restaurants, retail shops, a fitness center and a daycare facility. Other tenants include Huntington Bank and Detroit Medical Center.
The building was constructed at the former site of Kern's department store south of the old Hudson's.