- change ups
One Big-Time Partnership
Two regional giants in their respective fields have joined forces to build a new $25 million Class A office structure in the Glenwood Hills Office Park in Cascade Township.
Rockford Companies of Grand Rapids, the region’s largest commercial builder, and The Hinman Co. of Portage, a sizeable developer and property management firm in its own right, are partners in a project for the first time ever. But the idea for the joint venture didn’t get brewed overnight. It actually began simmering several years ago.
“I met Roger (Hinman) a couple of years ago and he has a place in the Florida Keys by mine. He was looking to share some transportation back and forth. We were talking about how we get down to the Keys and both love fishing and other things. And one thing led to another,” said John Wheeler, co-founder, CEO, and chairman of Rockford Cos., the parent firm of Rockford Development Group and Rockford Construction Co.
What happened next was The Hinman Co. invited Rockford Cos. to a social event the firm hosted at its home office in Portage.
“I put my management team together and we went down to Kalamazoo and had a fun night together with all of his people. We started talking about synergies, and Roger said, ‘We don’t own a construction arm and you don’t own a property-management arm. Are you guys thinking that maybe someday we’d want to partner-up on something?’ I said, ‘Sure, that would be great,’” said Wheeler.
But the opportunity to work together didn’t surface until Rockford converted the former Steketee building in downtown Grand Rapids into a new home for Blue Cross Blue Shield of Western Michigan three years ago. As part of that deal, Rockford Cos. purchased the Blue Cross building in the Glenwood Hills Office Park and then moved into it. The firm also bought the last six acres of vacant land in the office park with an eye toward putting up another office building on the property someday.
When that someday arrived, Wheeler said he contacted Hinman about the project.
“They said, ‘This is right up our alley. This is exactly what we like to do.’ So we formed a 50-50 joint venture,” said Wheeler.
The Hinman Co. bought half of the land from Rockford and the firms are planning to put up 150,000 square feet of Class A office space on the site, which is near I-96 and the M-6 junction. At press time, the companies were deciding whether to build a single 150,000-square-foot building or a pair of 75,000-square-foot buildings. But both concluded that their pooled investment would total $25 million, regardless of how the square footage gets distributed.
“We’re looking for a couple of key tenants. There are some people that are kicking the tires, both from in town and from out of town. They’re looking for highway frontage and exposure. The amenities that we have with our big wetlands and all the wildlife out here — I’m looking at it right now; it is beautiful,” said Wheeler.
When CQ asked Wheeler what impressed him the most about The Hinman Co., he quickly answered it was the firm’s integrity and honesty.
“You sit down with them for five minutes and you’re overwhelmed by their openness in how they do things. And they made it clear that their clients are their No. 1 priority. They hit all the buttons on how I try to run my company. It was cool,” he said.
“(Roger) focuses on the tenant after the project is built. We focus on the tenant during and before the project is built. So it’s a cool handoff to think that we have a partner that really understands on-site property management. We don’t do any of that stuff; that’s not our forte. We build and design and get them done right and create some economic value in the process.”
CEO Roger Hinman founded The Hinman Co. in 1977. The firm has built a diverse portfolio of office, retail and residential properties since then. The company owns and manages more than 2 million square feet of space in Michigan alone, including the former Michigan National Bank building at Monroe Center and Ionia Avenue in Grand Rapids, and has holdings in other states.
Although the firm has its main office in Portage, The Hinman Co. also has offices in Grand Rapids, Muskegon, Battle Creek, East Lansing, South Bend and Bolingbrook, Ill., which is just west of Chicago.
Wheeler started Rockford with construction company president Michael VanGessel in 1987. Rockford Construction earned its reputation as a quality builder by renovating many old structures in downtown Grand Rapids, most notably the former Peck Building and 10 old warehouses and factories that now make up Cherry Street Landing.
Most recently, Rockford partnered with Pepper Construction of Chicago to build the JW Marriott Hotel and the Grand Rapids Art Museum, two new downtown developments that just opened and are worth about $160 million combined.
Even though more decisions need to be made before a groundbreaking can take place on the new office building, Wheeler remains extremely confident that his firm and The Hinman Co. will be working together in the near future.
“It’s going to be market driven, for sure. But there are some tenants that are looking to get out of ‘B’ spaces. There are some tenants that are looking to grow, and there also are some out-of-town people looking at Grand Rapids. I know there are several groups that they’re getting ready to get our artists renderings on the building together to talk to some people that aren’t even here yet,” he said.
“We closed on the land; we own it. This is not a spec deal. We’ve got it and it’s something we’re going to do.” CQX