For Redico, it would be another prominent downtown property in its portfolio, as well. The company developed, owns and manages Detroit's newest skyscraper, the 246,000-square-foot One Kennedy Square that was built in 2006.
I reported in November that iStar began marketing One Detroit Center, downtown’s third-tallest office tower, in which the Detroit Police and Fire Retirement System has a 10 percent ownership stake.
The retirement system was first offered the property for more than $100 million, an offer that was declined, leaving iStar and its broker, Eastdil Secured LLC, searching for other buyers.
As part of the acquisition, the buyer would receive all revenue from the building and parking deck and pay iStar and the retirement system annual rent on a long-term ground lease on the land on which One Detroit Center and its parking deck sit, Greg Camia, senior vice president of iStar, said last fall.
I’ve emailed Camia for comment; Redico CEO Dale Watchowski declined to comment.
Robin Schwartz, public relations director for Bedrock, said the company does not “comment on rumors and speculation."
One Detroit Center is at 500 Woodward Ave. between Congress and Larned streets.
It is third in size only to the Compuware Corp. headquarters (1.1 million square feet), jointly owned by Gilbert’s Bedrock Real Estate Services LLC and Meridian Health; and the Penobscot Building at 645 Griswold St. (996,000 square feet), which is owned by Triple Properties Detroit LLC, an American arm of Toronto-based Triple Properties Inc.
It looks like the assumption in real estate circles that an out-of-state investor would buy One Detroit Center downtown was the wrong prediction.
That’s because three prospective buyers, all local, are the remaining finalists in the “best and final” offer stage.
Who appears to be coming out on top?
Souces in the real estate community say Dan Gilbert, the founder and chairman of Quicken Loans Inc. and Rock Ventures LLC, is the frontrunner to buy the 957,000-square-foot skyscraper and an attached 2,070-space parking deck for about $100 million.
The other two locals making it to the final round: Southfield-based Redico LLC and Troy-based The Hayman Co., sources said.
Andrew Hayman, president of The Hayman Co., confirmed that his company offered about $100 million for One Detroit Center.
Let's be clear: The deal has not yet closed. Any number of things could happen.
I’m hearing that anywhere from six to 15 offers for the property, which is majority-owned by New York City-based iStar Financial Inc., were received. Those offers were then narrowed down to Gilbert’s Bedrock Real Estate Services LLC, Redico and Hayman.
Here’s why Gilbert wanting to buy One Detroit Center makes sense: he owns Two Detroit Center, a 1,100-space deck that he bought for $10.5 million in 2011 directly east of the deck attached to the skyscraper, according to CoStar Group Inc., a Washington, D.C.-based real estate information service.
Extell Development Company has relinquished the reins of 212 Fifth Ave. to the joint venture of Madison Equities, Building and Land Technology, and Thor Equities for $260 million.
The deal involving the 24-story, 220,000-square-foot office building, at 26th Street near Madison Square Park, was finalized at the end of last month. The property was coined the "Crown Jewel" of the Ring portfolio, when the Ring brothers owned the building that was one of a group of 13 Midtown South properties.
iStar Financial Inc. provided financing for the purchase amount as well as for a $275 million construction loan.
Jennifer Schwartz, of counsel at Polsinelli in New York, and shareholder Clay Hagedorn in Kansas City, Mo., represented the seller.
Reports said the joint venture also acquired a $275 million construction loan toward a gut renovation for the creation of a 48-unit residential building and will include more than 3,800 square feet of commercial space on the ground floor.
The new owners declined to comment on any details and timeframe.
Madison Equities, the real estate development group, was founded in the mid 1960s by Kenneth and Lucille Gladstone, who began in the building industry as contractors more than 60 years ago. The company has developed high quality office, retail, residential, hotel and mixed-use buildings in New York City.
Thomas Kearns, a partner at Olshan Frome Wolosky, and associate Carolyn Sha represented Madison Equities on the purchase and the loan.
Joshua Kamin, a partner at King & Spalding, and associate Gautam Huded, both in Atlanta, represented Building and Land Technology.
Lee Parks, a partner at Fried, Frank, Harris, Shriver & Jacobson, and associate Patrick Greeley represented Thor Equities in the joint venture.
Christine Murphy, a partner at Katten Muchin Rosenman, and associate Scott Hovanyetz represented the lende
Magnum, CIM Close Loan for Lower Manhattan Verizon Building Condo Conversion
BY GUELDA VOIEN 2/05 2:15PM
100 Barclay Street
A partnership of Ben Shaoul and Los Angeles-based CIM Group closed on $390 million they will use to convert a Lower Manhattan office building into fancy condominiums, Mortgage Observer has learned.
A source said the pair obtained capital from New York-based iStar Financial and Stamford-based H/2 Capital to facilitate the construction of 166 residential condos atop retail and offices at 140 West Street, which has been rebranded as 100 Barclay Street.
The units will be built in the top 22 floors of the 31-story building, which sits at the corner of Vesey Street about a block from 1 World Trade Center.
The three-year loan is Libor-based, the source said.
Mr. Shaoul’s Magnum Real Estate bought the building for $274 million in 2013, according to previous reports, and later picked up the retail in the base of the building for $40 million, in late 2014.
Units start at $2 million and sales began last September, according to a report from Bloomberg News. The two-, three-, four- and five-bedroom units will feature large living spaces and two duplex penthouse units will crown the building.
Plans call for a pool, gym, lounge and wine bar, Bloomberg said.
Verizon will continue to operate offices in 10 lower floors at the building. The firm has been spinning off its real estate in recent years as part of a cost-cutting measure, reports show.
Aaron Appel and Michael Diaz of JLL handled the transaction, the source said. A representative for JLL was not available for comment.
Mr. Shaoul confirmed that the deal closed but declined to provide further details. iStar and CIM Group representatives did not return calls and H/2 declined to comment on the deal.