BY THE NUMBERS

DETROIT—Just a few years ago, this city's CBD seemed in danger of becoming a ghost town. Instead, each year has seen more office buildings renovated and filled with tenants, including many firms that have migrated in from the suburbs. And 2017 has been no different. Newmark Knight Frank just released its third quarter report, and the data show demand for office space at levels never seen in the CBD. The vacancy rate decreased 20 bps to 11.2%, as just over 32,000 square feet was absorbed. Year-to-date, the CBD has posted 237,272 square feet. Since 2012, the CBD has absorbed just over 2.4 million square feet. The level of demand has created a near scarcity of functional modern office space; the vacancy rate for class A space alone is just 7.7%. Furthermore, investments in the downtown—including new sporting venues, retail districts and residential developments— have grown into the billions of dollars. “Since 2012, we've seen a transformation of the Detroit CBD,” says Fred Liesveld, managing director of NKF's Detroit office. “It is great to see that investments and energy continue to pour into the downtown area going into 2018.”

NEWS & NOTABLES

ITASCA, IL—ML Realty Partners' board of directors has appointed Ryan Hesch as president and chief executive officer. Hesch, currently a senior vice president, has also been elected to the board. He joined the company fourteen years ago and was promoted to various positions during his tenure. Mike Luecht, the founding and current and chief executive officer, says he will work carefully with Ryan and the board on a well-planned transition process. Luecht, who is retiring, will remain on the board. “In 2001, when the company was founded, the goal was to become a respected and successful real estate operating company who had their clients and their investors best interests driving the company every day,” Luecht says. “Our leadership team over the years accomplished that for sure as ML Realty Partners has become one of the leading investors and developers of industrial real estate. With Ryan and the rest of the leadership team taking the company forward from here, that same core commitment will be there as well as the continued passion for more growth.”

In addition, the board appointed Nancy Kozinski as the new chief operating officer. Kozinski, who has also been elected to the board, will oversee the operations of the company, which now has more than $1.0 billion in assets. “Nancy has done an exceptional job over the years overseeing our assets,” Mike Luecht says, “and this is a natural expansion of her responsibilities.” She joined the company ten years ago.

LOUISVILLE—Home2 Suites by Hilton, part of Hilton's All Suites portfolio, has just unveiled its newest property, Home2 Suites by Hilton Louisville NuLu Medical District. First Hospitality Group, Inc., in a joint venture with Louisville-based Weyland Ventures, LLC, owns and will manage the 100-suite hotel, which will offer all-suite accommodations with fully equipped kitchens and modular furniture. The hotel will also feature an “Oasis” space lobby designed for guests to lounge socially, communal spaces, and trademark amenities such as Spin2 Cycle, a combined laundry and fitness area, and a complimentary daily breakfast. Guests will also enjoy a heated indoor saline pool and a rooftop lounge. “With the Medical District right in our backyard and the amount of business and leisure travelers that come through the city each day, this property will be the perfect addition to those looking for a 'home away from home' during their visit,” says Robert Habeeb, FHG president and chief executive officer.

DEALTRACKER

INDIANAPOLIS–Officials from HRI Properties said this week that they have financially closed and started construction on the dual-branded Hyatt Place and Hyatt House hotel located in Indianapolis' Wholesale District, directly across from the main entrance to Bankers Life Fieldhouse. Construction began in September, with a targeted opening date in second quarter 2019. HRI Lodging, an affiliate of HRI Properties, will manage the property under franchise agreements from Hyatt Hotels Corp. The dual-branded hotel will consist of a 186-room Hyatt Place Hotel and a 130-room Hyatt House Hotel with amenities including valet parking, more than 6,000 square feet of flexible meeting and event space, rooftop swimming and fitness facilities, a second-floor indoor/outdoor lobby bar that overlooks Pennsylvania St., and more than 13,000 square feet of ground floor retail space. The development will also include construction of a 382-space parking garage for both guests and the general public. This project includes construction financing from Wells Fargo Bank, NA and tax increment bonds issued by the City of Indianapolis which were purchased by Regions Bank, NA. The project team includes Wilhelm Construction Co. as the project's contractor, RATIO Architects as the architect of record, and Getty's One as the interior designer.

KENOSHA, WI—The Chicago offices of CBRE recently represented the buyer and the seller of a 70.91-acre site in Kenosha, WI., a region that has become important to the Chicago region's industrial market. In the transaction, Itasca, IL-based Bridge Acquisitions LLC, a division of Bridge Development Partners, sold the property to Milwaukee-based Towne Realty Inc. The property, located along a full interchange at I-94 and Hwy. 142, and could host a roughly 600,000 square foot cross loaded building, as well as multiple 250,000 square foot single-loaded properties, for a total of more than one million square feet. Whit R. Heitman, Sam Badger, Brad Weiner and Jared Paff of CBRE represented both parties. According to CBRE research, the vacancy rate in the Kenosha area is 4.3% and year-to-date the market has recorded 1.9 million square feet of net absorption. “The Kenosha market continues to be in high demand for users of all types,” says Heitman. “This development site is an ideal location for either speculative or built-to-suit opportunities and should draw plenty of interest from distribution and warehousing users.”

GURNEE, IL—In another deal, the Chicago offices of CBRE recently represented Weiman Products, LLC in a 255,418 square foot lease renewal and expansion at 705 Tri-State Pkwy. in Gurnee, IL. Heitman, Badger, Weiner and Paff also represented Weiman in the transaction. Previously, the firm occupied 155,000 square feet at the property. With the renewal and expansion, Weiman, a home products supplier, now occupies the entire building, which CenterPoint Properties developed in 2008, and offers 30' clear heights and 20 exterior docks. Lake County has experienced 1.38 million square feet of leasing activity year-to-date, for a positive absorption of 427,000 square feet, according to CBRE Research. This activity brings the area vacancy rate to 5%. “Weiman has experienced excellent growth in recent years and this location allowed the firm to conveniently expand to accommodate its increased activity,” says Heitman.

BUILDING BLOCKS

FRANKLIN PARK, IL—CenterPoint Properties has just started construction on its CenterPoint Logistics Center – O'Hare. The company will develop the two speculative warehouse facilities, totaling about 560,000 square feet, on a 33-acre parcel located on the southern edge of Chicago's O'Hare industrial submarket. The two buildings, of 225,891 with 32' clear ceilings, and of 333,696 square feet with 36' clear ceilings, are the largest O'Hare construction projects in 2017. Located at 10601-10701 Seymour Ave. in Franklin Park, these facilities are also near the O'Hare Airport South Cargo gate and have easy access to I-294 via Mannheim Rd. CenterPoint has named Jim Estus, of Colliers International, to market the buildings. “Because of the proximity to the airport and other transportation options, the O'Hare market historically is one of the strongest markets in Chicago,” he says. “With the general lack of new product available in the marketplace, CenterPoint Logistics Center – O'Hare is well-timed to meet the ongoing needs of users.”

Instant Insights /

Middle Market Digest-The Midwest

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