$1M Lands Vacant Office Asset

When Finelli bought the building, vacant since 2002, in an auction in early 2007, he reportedly said he was going to try to find a single user or a few tenants to fill it. It didn't work, as the bottom of the Southeast Michigan office market, in which Pontiac is definitely in, dropped even further in the past year. The local market is about 30% to 35% vacant, says Robert Pliska with Sperry Van Ness. "But the building is in the heart of Oakland County, and is only a few miles from high-tech areas such as the technology center and Chrysler headquarters in Auburn Hills, MI." Pliska and Michael Dudash with the Hayman Cos. represented Ottawa Tower Ventures, Finelli's holding company for the property. Harry Altick with Greenbrae, CA-based Sperry Van Ness represented the buyer.

Built in 1981, the building is on almost two acres and is connected to the popular Phoenix Center, with a roof-top park and 2,600-car parking garage, in the center of the Downtown. It's one of the largest office buildings in the Downtown. It's also one of the only office buildings in the Downtown, in an urban area known for crime problems and a weak retail main street. It doesn't help matters that the city council is going to lay off 25 police officers to help balance the budget.

Pliska tells GlobeSt.com that the new owner, who he wouldn't name, also hopes to get a single user to take most or all of the building. One user, combined with the low purchase price, would allow an extremely low lease rate, he says. "You could probably lease it up for a couple dollars a sf," Pliska says. "If the tenant pays all expenses, you could do $2 to $5 per sf, triple net, or like $12 to $15 gross." Comparatively, the 10-story Riker Building leases for $14 per sf, and the six-story 761 W. Huron building leases for $12 per sf.