NYX Signs Lease, Auto Suppliers Exhale

Gregg Loichinger, Peter Rogers, Randall Allman, Chuck Ginster and Joe Hauska with CB Richard Ellis represented the landlord, KIN Properties Inc., in the lease. The building had been a parts supply depot for GM, but the company had vacated the property, prompting the city to help KIN with incentives to find a new tenant. The lease is long-term, Loichinger says. He could not divulge the exact rate for this deal, but says the average rate for the area is $4, triple net. The group is also representing the property owner in 10 acres of land next to the building, available for up to 200,000 square feet of build-to-suit.

Detroit area industrial space has had a rough time, as local experts say activity pretty much dried up while the US auto companies tried for loans and examined bankruptcy options. The auto companies mostly dominate the industrial market, and suppliers, unsure of the future, halted most deals. Since Pres. Bush announced bailout funds for GM and Chrysler (Ford has said it does not yet need help), Loichinger tells GlobeSt.com that area property owners have breathed a (small) sigh of relief. "It's allowed people to get their color back," he says. "We're still cautiously optimistic, we'll be watching what happens in the next 90 days. Hopefully the Big Three will get on the right track, versus filing bankruptcy."

However, tenants and buyers are still in the driver's seat, Loichinger says. "Buildings that are being sold are going for way below market value. As a tenant, you can pretty much drive deals in your favor based on lower rental rates. Asking rates don't even really matter anymore, we can ask whatever we want, but the tenant is wielding the hammer right now," he says.