- change ups
Ashley Makes A Mark
GRAND RAPIDS — Last February, Ashley Capital closed on its purchase of 206 southeast-side acres from Steelcase Inc. Shortly after the closing, the New York-based real estate developer named the property the Grand Rapids Commerce Center and began its redevelopment plan, which includes all 206 acres and creates spaces for light industrial, office and retail uses.
It is one of the biggest commercial real estate transactions of 2007, and its job-creation potential is mind boggling: up to 4,000 new jobs could come from the redevelopment project over the next few years.
So far, it's off to a good start.
Ashley Capital Vice President of Leasing Kevin Hegg, who operates out of the firm's suburban Detroit office, said the Commerce Center already has two tenants, including Bata Plastics, the first firm to commit to the site. Bata, an industrial plastics recycler and a leading member of the local sustainable business community, leased a 120,000-square-foot building and a 10-acre piece of property on the north side of the campus last summer and holds an option to purchase both.
In November, Diversified Distributions Systems LLC announced it would move into a 950,000-square-foot building on the site. The Minneapolis-based distributor of retail packaging supplies will invest $1.5 million in its location and add 150 new jobs to the city's work force. DDS also has an option to buy.
Interest in the development has been so strong that it has altered the center's layout. At first, Ashley Capital planned to demolish six of the property's 18 buildings. But because there were so many inquiries about the project and because business owners in the region like to own their facilities, Hegg said only two buildings would have a date with the wrecking ball. A small, obsolete structure was razed, as was a portion of a larger building.
"We knew coming in that western Michigan has a higher level of owner occupancy. As a result, quite a bit of the interest we've received has been from buyers, and we are not opposed to selling. We have several other interested buyers that we're speaking to at present. So we don't have a hard-and-fast rule that we'll only lease," he said.
That interest has also altered the initial redevelopment plan. Ashley Capital had targeted big-box retail and housing units for a portion of the center, but has since moved its focus to industrial, office and smaller retail shops. Just as well, Hegg told the Business Journal, because demand in the retail and residential markets is down.
"Those plans will continue to evolve and change over time as we get feedback from the market as to what the market demands," said Hegg.
The company hopes to complete the project by 2011.
Ashley Capital Vice President Lori Roth said the firm would invest at least $50 million to redevelop the 4.7-million-square-foot Commerce Center, which is situated between 44th Street and Eastern Avenue SE. The company, whose specialty is redeveloping industrial sites, has a portfolio of 25 million square feet, 17 million square feet of which are in Michigan.
"Ashley Capital has an incredible track record in the successful redevelopment of projects this size," said Dave Konyndyk, who is managing the redevelopment work.
Ashley Capital has regional offices in the Atlanta, Chicago and Detroit metro areas.
Local commercial realtor Grubb & Ellis|Paramount Commerce brokered the sale and is handling the leasing and sales effort. GE|PC CEO Duke Suwyn said the Commerce Center has high-quality facilities and infrastructure, and he credited Steelcase with taking good care of both.
"You're in an area of industrial buildings that are being completely redeveloped," he said. "As a vision of resurgence of an industrial area, this is certainly fitting the bill."