Intercontinental Buys MXD Office for $38M

BIRMINGHAM, MI-Boston-based Intercontinental Real Estate Corp. has purchased the 325 N. Old Woodward building, a mixed-use property constructed over the site of the site of the former Jacobson’s department store in the Downtown. The property, which includes 74,000 sf of office space and 39,000 sf of retail space, was sold for just less than $38 million by Burton-Katzman Development Co.

The deal, for just less than $376 per sf, is one of the highest ever paid for a property in the Detroit area, says John Gordy, SVP and principal with Signature Associates. The company handled the leasing in the building. Gordy says he brought Intercontinental to the table. “They were looking at several other assets in the area, and I presented the building before it was available,” he tells GlobeSt.com. “It’s arguably the best trophy building of its size in the entire marketplace; as it is only one year old, mixed use and in one of the top markets in the region.”

The tenant mix also had a large part to play, Gordy says. The building’s first floor is retail, which includes a coffee shop and a Fleming’s Steak House, and two floors of office space, occupied by finance firms UBS, Oppenheimer and Raymond James. Google also recently agreed to lease 20,000 sf, resulting in the office space being 97% leased. The top floor is condominiums, with 16 units atop the building, but these were not included in the sale. The property also includes a 48-space underground parking garage.

Gordy wouldn’t detail the office lease rate in the building, but says the tenants are “paying the highest rents in the marketplace.” The average class A office rate is $30.75 in the Birmingham market, according to a third-quarter market report by Grubb & Ellis.

Burton-Katzman usually holds onto its properties, but the company felt it had maximized the property, Gordy says. “They leased it up to outstanding credit tenants, and were able to cash in on the efforts,” he says. Downtown Birmingham, about eight miles north of the northern Detroit border, is one of the most popular office and retail locations in the state.