Franklin Partners With Region

July 21, 2006
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WYOMING To put it as succinctly as possible, Franklin Partners LLC likes West Michigan

And more than one West Michigan public official says the feeling is mutual.

The Chicago-based commercial real estate investment firm recently announced it is in the process of acquiring its sixth property in the region ¡ª fourth in the metro Grand Rapids area ¡ª when it revealed two weeks ago that it will purchase the Dematic Corp. office building and manufacturing facility on

Eastern Avenue
.

The transaction is expected to close in September.

Donald Shoemaker, a partner in Franklin Partners with Martin McCormick, said his firm sees a bright future ahead for the area¡¯s manufacturing sector, a statement that his company backs with its willingness to put its money where its vision is. Part of that optimism is due to the ¡°welcome¡± mats that local elected officials have set out.

¡°If you drew a line and separated West Michigan from the eastern half of the state, I think people would find a vibrant economy where there is a spirit in the communities to be a partner with guys like us who want to redevelop properties,¡± said Shoemaker.

¡°We¡¯ve had a very easy and welcoming experience from Mayor (Richard) Root and the city of Kentwood; they made life easy for us. We feel the same about the city of Wyoming,¡± he added.

Franklin Partners has purchased two large properties in Kentwood. One was the Steelcase facility at

5353 Broadmoor Ave. SE
. The other was the former Bosch plant, at
4700 Broadmoor Ave. SE
.

The former Steelcase building, which the firm bought late last year, offers almost 666,000 square feet of space. The Bosch facility, which Franklin purchased in 2003, was even larger at 915,000 square feet. The company trimmed about 100,000 square feet from that building to make way for a truck court and for the corporate headquarters of X-Rite Inc.

¡°We are encouraged by the wisdom and foresight they bring to the entire area, not just the individual communities involved,¡± said Root of Franklin Partners.

The Dematic property, which has a 96,000-square-foot office building and 320,000 square feet of manufacturing space on 27 acres, is the firm¡¯s second acquisition in Wyoming. Those acres mostly lie in Wyoming, but a portion is in Kentwood. Franklin Partners entered the metro market and Wyoming in 1997 by buying the Kelvinator plant at

500 44th St

¡°Successful redevelopment of this property will allow us to create a center of commerce that will benefit both of our communities,¡± said Wyoming Mayor Carol Sheets about the promise that Franklin¡¯s purchase of the Dematic property holds for her city and for Kentwood.

Shoemaker said the office building was completely renovated a few years ago and the manufacturing facility needs some mechanical improvements made to it. He added that his firm may develop some additional commercial uses for the Dematic site as the property is large enough to accommodate those.

¡°This site is a little different than the others we bought, which have really been state-of-the-art manufacturing facilities. But we think it¡¯s similar for us because it¡¯s a good property and a good value, and we think we can make this thing work,¡± he said.

Price and terms of the deal weren¡¯t disclosed, but the 2006 taxable value of both Dematic buildings comes close to $700,000. Franklin Partners hasn¡¯t set a definitive redevelopment plan yet, but the firm is expected to enlist the same team it used for its other purchases here.

If so, that means Grubb & Ellis©¦Paramount will handle the leasing activity for the site. The firm represented Franklin Partners in the transaction with Dematic, which plans to end production there fairly soon. It will also mean that AJ Veneklasen will direct the construction work, and Fishbeck, Thompson, Carr and Huber will design the project.

¡°We will most likely lease, but all of our properties are always for sale,¡± said Shoemaker.

But the cooperation and assistance that Franklin Partners has received since coming here isn¡¯t the only reason the firm repeatedly returns to make new investments. Shoemaker said his company also sees some strong growth occurring in the region¡¯s manufacturing sector, even though the economic numbers don¡¯t reflect what is slowly happening in the industry.

¡°We have had vacant industrial buildings in West Michigan and really have never had more activity on them from big manufacturers looking for new homes. And we¡¯re seeing some companies who are looking regionally that appear to be focused in on West Michigan for new manufacturing facilities,¡± he said.

One case in point involves X-Rite, a local company that is the worldwide leader in color measurement technology. X-Rite recently purchased a Swiss competitor, Amazys Holding AG, and announced it will move its plant and headquarters from Grandville to the northern portion of the Bosch plant that the firm now owns. Intertek ETL Entela has moved there, too, which means that more than 700,000 of the building¡¯s original 915,000 empty square feet is now filled.

Shoemaker also said interest in the former Steelcase plant on Broadmoor has grown. His firm is halfway through replacing the roof there, is set to install a new power system in the building, and is close to getting new curb cuts on Broadmoor. All the activity has driven Franklin Partners to add a local facilities director to its payroll.

¡°We¡¯ve hired Gary Tamminga, who was in the Steelcase facilities group for 23 years, and is just the best building guy I¡¯ve ever met. He understands buildings and systems and how to get them fixed and how to get them adapted as well as anyone that I¡¯ve ever come across,¡± he said.

Shoemaker, however, said the growth the local industry is experiencing, and will continue to experience, isn¡¯t just coming from local firms. He said he sees the potential for out-of-state businesses to come into Michigan, instead of Michigan businesses going out of state. But he felt that much of that potential is flying below the radar screen right now.

¡°When a plant closes, that¡¯s a newsworthy event. It¡¯s fast, it¡¯s sudden and everyone gets laid off at once ¡ª and that makes the news. Then when companies are growing, that¡¯s more of a process where they¡¯re hiring slowly, and companies can continue growing without being very recognizable to the public until all of a sudden they need a new plant,¡± he said.

¡°That does take a while to build up. It really does lag behind an economic recovery. We think there are a lot of positives here. There are so many Grand Rapids-based companies that are thriving that we¡¯re optimistic on it.¡±     

Franklin Partners LLC

Who: Donald Shoemaker and Martin McCormick, partners

What: An Illinois limited liability company that owns, acquires and manages about 14 million square feet of office and industrial space primarily located in the Midwest

When: Founded in 1995.

Where: Based in Chicago

Why: Has acquired or is acquiring a total of six properties in West Michigan since 1997. Four are in metro Grand Rapids

  • The Dematic property at 4147 and
    4247 Eastern Ave., Wyoming

  • The former Kelvinator plant at
    500 44th St., Wyoming

  • The former Steelcase facility at 5353 Broadmoor, Kentwood

  • The former Bosch plant at 4700 Broadmoor, Kentwood

  • The MeadeBuilding at 4141 Manchester, Kalamazoo

  • The Richard Allen Scientific Building at
    4481 Campus Drive, Kalamazoo
    .

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