Analysts: Fisher Building sale could revive landmark
Detroit — A potential summer sale of the landmark Fisher building and the nearby Albert Kahn building could be the best thing for the historic buildings, said several commercial real estate analysts.
A sale of the buildings is likely this summer because the owner of the two buildings defaulted on a $27 million mortgage more than two years ago. The loan, taken out in 2005, matures in July. A future sale of the buildings is not out of the question, said a spokeswoman for FK Acquistion LLC, the entity that defaulted on the mortgage.
The group issued a vague statement Wednesday: "It has been an honor to look after the Fisher and Albert Kahn buildings for the past 14 years and we wish the next owner all the best as they care for these iconic assets and their bright future."
The registered agent for FK Acquisition is Andy Farbman, who is CEO of real estate firm Farbman Group in Southfield.
The Detroit Free Press reported Wednesday that both buildings would be put for public auction in June on the online website auction.com. The California-based auction.com didn't return telephone calls or emails Wednesday.
A sale of the two buildings, in whatever form it takes, has much potential in reviving the historic buidlings.
"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.
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.
With the construction of the M-1 Rail and the growth of Midtown, many analysts say the New Center is ready for a rebound that could lure potential buyers.
The Fisher Building, built in 1928, is located at 3011 W. Grand in the heart of the New Center area. 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. 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 effect that ownership, said DPS spokeswoman Michelle Zdrodowski.
"The sale of the Fisher Building wouldn't impact DPS's space because the new owner would still be required to meet and maintain all obligations of the primary condo owner outlined in our condo purchase agreement," said Zdrodowski.
The eight-story Albert Kahn Building, at 7430 Second, is 51 percent occupied, according to CoStar. Key tenants are Albert Kahn Associates Inc. and UAW Legal Services Plan, according to CoStar.