DETROIT—Few properties in the metro area are as recognizable as the 2.15-million-square-foot Southfield Town Center, a collection of five towers and a retail pavilion in suburban Southfield. But the suburban office market has hit a rough patch as many corporations have decided to migrate downtown, and tenants now occupy only 67% of the center. But New York-based 601W Cos. has decided to take a chance, and recently closed a $177.5 million purchase of the complex, and plans to spend around $40 or $50 million on upgrades to boost its desirability.
Meridian Capital Group, LLC, also of New York, helped close the deal by arranging a $142 million mortgage for the purchase. The 10-year loan features three years of interest-only payments and was provided by Deutsche Bank. This transaction was completed by Meridian Capital Group managing director, Rael Gervis.
“Meridian leveraged its strong position with CMBS lenders to efficiently make a market for financing this unique asset and structure highly accretive long-term financing at 80% of the purchase price, despite the property’s 67% occupancy rate,” said Gervis in a prepared statement. He was not available for further comment. “Meridian was able to get the lender comfortable with the transaction based on an acquisition price that is substantially below replacement cost, the iconic status of the asset and, most importantly, the strength and experience of the sponsorship,” he added.