Ashley Capital Closes On Steelcase's 4M SF

GRAND RAPIDS, MI-Ashley Capital is expected to spend up to $80 million as part of the purchase and upgrade of more than four million sf of manufacturing space at the 200-acre-plus Steelcase headquarters here. Almost a year after signing a non-binding letter of intent, in May 2006, the company closed on the sale on Friday. While the New York City-based industrial broker/developer was mum on costs, it is believed to have spent less than $30 million for 18 buildings on the property, though some say the price was closer to $20 million, said a local industrial market source.

Steelcase, the world's largest office furniture maker, announced plans in March 2005 to close three factories in Grand Rapids and lay off 600 workers. The move was a huge blow to central and western Michigan, which relies on the prosperity of college towns, such as University of Michigan in Ann Arbor and Michigan State University in East Lansing, and major industry such as Kellogg in Battle Creek and Steelcase.

Now, Ashley Capital appears to be the savior for Grand Rapids. This is the firm's first ownership of western Michigan property, but the company has a solid reputation in the Motor City.

The source tells GlobeSt.com that about half of the property is obsolete, leaving it to probably go for much less than $10 per sf. Lori Roth, vice president at Ashley Capital, agrees that some of the smaller buildings are outmoded. The company will spend $50 million on redevelopment of the site, she says. "We're still formulating what we're planning to do, probably a combination of demolishing some buildings, renovation of other industrial buildings and the creation of retail development," Roth tells GlobeSt.com. "We're also going to do a central utility system, so there will be submetered for different tenants." She says she can't comment on the sales price.

She says the company has been talking with several industrial and office tenants in the 200,000-sf, and more, need range. The company is also talking with several retailers to put in big-box stores on the property. Steelcase will remain on the property, retaining the 370,000-sf world headquarters office building and a 750,000-sf learning center, though half of the center will be demolished.

Dave Konyndyk, an industrial adviser with Grubb & Ellis Paramount Commerce, represents the Ashley Capital in the new leasing with John Kuiper. Konyndyk says his company was hired after Steelcase realized it would be better to hire a real estate company to find a developer for the site. He says the deal is huge for the city. "They're going to put in some new infrastructure, roads, make a nice industrial park. This will clean that area up," Konyndyk tells GlobeSt.com. He also says he can't comment on the purchase price.