MAVD News: 2005

Ann Arbor Business Review

December 22-28, 2005, Vol. 3, Issue 51

Acquisition adds building to South State Commons

By Paula Gardner
pgardner@mbizreview.com

A 40,000-square-foot acquisition by MAV Development Co. positions the Ann Arbor company to add to its high-tech South State Commons campus. MAV bought the property at 1000 Campus Drive in mid-December, said company president Rob Aldrich.

The building is south of MAV's South State Commons, a pair of office buildings – including the Michigan Information Technology Center – that total 220,000 square feet on State north of Eisenhower.

With the purchase of the contiguous 3.49-acre property, the company gains control of a third office building in an area that's had strong activity in recent years.

In addition to the 100-percent leased MITC, the area is home to Eisenhower Plaza, known as the 777 building, which is building a 110,000-square-foot addition for ProQuest Co.

Renovations to the campus Drive building are planned Aldrich said, "to bring it into the same design family."

MAV bought the building from JFK Investment Co. LLC of Bloomfield Hills. Negotiations began more than a year ago, but the timing wasn't right, Aldrich said.

However, negotiations later resumed and the deal fell into place by fall.

Aldrich would not disclose the sale price. However, he described the deal as a repositioning play.

"We've traditionally be ground-up developers," Aldrich said. "But this is a value-add where one plus one equals three."

The property's key tenant had been Creative Solutions, until it moved to new offices in Avis Farms in early 2005. That left a 6,000-square-foot office as the only occupied space in the building.

"Our job is to renovate the building, improve its presence on State Street and re-lease it," Aldrich said.

In addition to landscaping and building improvements, the parking lot will be reconfigured to add spaces and improve the traffic flow among the three buildings.

Aldrich will boost its presence from the road, possibly by building a parapet to make it more visible.

He also wants it to have a State Street mailing address. The building's name will be changed to South State Commons III.

"We can improve its presence by doing simple things," Aldrich said.

In the future, Aldrich said, there's the possibility of adding space to the building or adding to the site.

Potential tenants may be a single-user or multiple offices, he said: "We're going to consider both."

A benefit to the site is access to the high-tech infrastructure already in use at the other South State Commons buildings, Aldrich added.

JFK acquired the building from Metropolitan Life Insurance in 1997 for $3.3 million, according to Ann Arbor records. The building's original owner was an entity controlled by Eric Yale Lutz of Birmingham.

Its 2005 assessed value was $2.5 million.

Paula Gardner can be contacted at (734) 302-1715 or pgardner@mbizreview.com

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