Vacant Building Needs Nearby Parking

May 7, 2004
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GRAND RAPIDS — It offers decent views of downtown Grand Rapids and some pretty unique architecture.

But the 15,000-square-foot, five-floor office building at the intersection of Division Avenue at Fountain Street has one main drawback: It lacks designated parking space.

“There are a number of things now happening downtown that will change the area in the near future, but as of right now there is no designated parking with that building,” said Steve DeHaan, principal of G.W. DeHaan Real Estate.

The building is listed at $750,000.

Though its owner, Azar Industries, is not overly anxious to sell the property, it is willing to consider both offers and proposed leasing scenarios, DeHaan said.

It would be up to the buyer or lessee to work out the parking arrangements, he added.

DeHaan figures someone could lease the building’s lower level without having to lease any space on the upper floors, or a potential tenant could chose to lease two or three floors.

Azar has held the property for close to 10 years, over which time there have been various lease arrangements. DeHaan estimates the building is 80 to 90 years old.

The building previously housed some retail ventures and a number of medical offices, he said.

His guess is that the building will go to lofts on the upper levels, retail on the lower level and possibly a floor of offices.

“But then again, it could easily go to offices. It just depends on what happens in that corridor.”

The property owner doesn’t consider himself a developer, DeHaan explained, so has been listening to proposals.

“They’ll look at a wide range of uses for the property, but I’m not sure that’s always going to be the case,” he noted.

“He may well end up developing that particular piece of property.”  

Although the owner has accepted a couple of offers, in both cases the potential buyers were unable to pull together financing packages, he said. 

“You’re probably looking at design build-out, so someone who might want to take a substantial portion of the building would be looking at a longer term lease — I would say no less than five years and probably more like a 10-year design build-out situation.”

A firm that wants to lease space could take on the renovations itself. Or, he said, the building owner could undertake the renovation and then base the lease rate on the cost of the build-out for the particular tenant, their financial strength and how long they intend to occupy the space.

However, if someone wanted to lease out some of the retail space on the first floor, the owner would consider build-out to white box stage and a shorter-term lease.

“When you start talking about more than the first floor, you’re probably talking about redoing the building. I think once you start doing the mechanicals on the individual floors, you’re probably going to have to do the whole building at that point.

“My guess is if they did two floors of that building for somebody, they would white box the remaining floors and have them prepared for other tenants.”

The property is being shown on a regular basis, at least three times a week, DeHaan said.

He said there are a number of different entities that have some level of interest in the building, each of them grappling with different issues in regard to what they need to do to make it work for them in terms of adequate parking and financial backing.

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