These are just rumors, said Michael Deighan of Rockwood Realty, which hasbeen providing real estate consulting and management for Kmart's facilities.
"They are not looking for a new headquarters," Deighan told GlobeSt.com."There's been a lot of speculation. I've personally seen two sets ofdrawings by developers over what could go on the site. But they have nointentions on moving out."
The complex includes 25 buildings, connected by walkways and towers. Theentire complex is probably worth up to $30 million, Deighan said.
Tuesday, the company officially emerged from Chapter 11 bankruptcy throughthe U.S. Bankruptcy Court for the Northern District of Illinois. The companyclosed on its $2 billion of exit financing provided by a syndicate led by GECorporate Financial Services, Fleet Retail Finance Inc. and Bank of America.The company closed 316 stores and sold the property, or gave up the lease.It also sold an office building it was using, Deighan said. However, there are no plans to sell the headquarters complex.
"It's about 70 to 80% occupied," he said. "It would be very difficultto move into a new facility, and very costly. Plus, the company has its DataCenter on the property, which houses all central computers for Kmart. Movingwould require significant long-distance charges to hook up into the system."
Plus, Kmart couldn't sell the headquarters even if it wanted to. As part of thebankruptcy, the company agreed to a trade vendor lien on the property,Deighan said.
"If the company were to sell the building, the proceeds would go into atrust to pay the vendors," he said. "Then, there'd be no funds to even payrent somewhere else. No, they have no reason to get out of their complex."
He said the property is not conducive to use as multi-tenant office, thepredominant property use on the Troy's Billion Dollar Mile along Big BeaverRoad.
"It could be used as a headquarters, or maybe a college campus, that's it,"Deighan said. "Other than that, it would have to be torn down to the dirt."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.