DETROIT-Chase Bank, a subsidiary of JPMorgan Chase, has sold its 598,000-sf Michigan headquarters, Chase Tower, to the locally based Sterling Group in a sale-leaseback deal. The sales price was undisclosed. The bank has signed a 10-year lease to continue to occupy the first eight floors of the landmark building, about 215,000 sf, and Sterling has begun looking for tenants for the rest of the space.

The National Bank of Detroit opened the 14-story building as its headquarters in 1959. In 1998, NBD merged with Bank One, which was bought by Chase in 2004. The building has been up for sale since then, says a company spokeswoman, and the bank employees have been slowly moving materials to just the first eight floors in preparation for leasing the property. “We prefer to be a long-term tenant than own the building ourselves,” the spokeswoman says. “Our expertise is helping people and companies with financial needs, not real estate.” The building’s name will remain as part of the lease deal, she says.

Danny Samson, vice president of the Sterling Group, tells that his firm has confidence in the city. The firm is located across the street from Chase Tower, making it easier to be a responsible landlord, he says. “This building truly represents a great opportunity, similar to our Guardian Building that we own Downtown,” Samson says. “We took that from 6% occupancy to about 50% occupancy in three years. We believe we have the advantages to bring in tenants.”

Samson says the firm is looking to fill the rest of the building with one or two large suburban tenants. “We need to educate them on why Detroit is a great place to do business. They’re out there, and we will have very aggressive rates to bring them in,” he says. The asking lease rates will be in the low teens, he says.

While some say Downtown Detroit is about to hit its resurgence, there’s still more than 26% vacancy for office space, according to a CB Richard Ellis fourth-quarter market report, and no national supermarket has put up shop there. Samson says there’s a lot more people moving Downtown, and much more construction going on in the city. “You’re seeing real mom-and-pop stuff. Yes, you’ve got the mega-million casino additions and the Book Cadillac building being redeveloped, but it can’t make it on just that, we need the mom-and-pop stores and business to get the city rolling again.”

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