McKinley expands Ann Arbor developmentMarch 2, 2008
McKinley expands Ann Arbor development
By Daniel Duggan
McKinley Inc. is starting the second phase of its McKinley Towne Centre office, retail and multifamily development.
So far, the office component project is fully occupied with anchor tenants Google and Detroit-based law firm Bodman L.L.P.
Bar Louie, a hip restaurant, is one of the retail tenants, and Illinois-based Joseph Freed and Associates L.L.C. is embarking on a 106-unit apartment adjacent to the project on land sold by McKinley.
The development has grown into the type of mixed-use project that often has to start from scratch in other suburbs, said Matthew Mason, director of sales and leasing for Ann Arbor-based McKinley.
"You could call it a nonattached lifestyle center," he said.
Geographically, the project is also a hybrid. University of Michigan students mostly keep to State Street, and the downtown business community sticks to Main Street.
At Division and Liberty streets, McKinley Towne Centre is between both areas but draws businesses to the office space and students to the retail and restaurants.
Mason expects more retail tenants to be drawn to the second phase of the project. Once the headquarters for Borders Group Inc., the one-story building will be redeveloped into a two-story building with retail on the first floor and offices on the second floor. The phase will add 12,000 square feet to the existing 125,000-square-foot Towne Centre.
And there's room to expand.
McKinley has an option to purchase two existing retail buildings between the first and second phases along Liberty Street.
The Ann Arbor central business district posts a vacancy rate of 7.1 percent for office space, according to research by the Southfield office of real estate firm Grubb & Ellis, which lists the overall metro Detroit market at 21.6 percent.
The city has been a bright spot in the local office market, said Dave Hamilton, CEO of the Ann Arbor-based real estate company Swisher Commercial. And the Towne Centre development has been prime office space. The asking rate for office space in the building is $30 per square foot, but it varies based on specific spaces, Mason said. Grubb & Ellis lists the average Class A asking rate for the Ann Arbor CBD at $24 per square foot."It's one of 10 or so sites downtown where someone would say 'I want to be there,' " he said. "The rates are on the higher side, but it's competitive."
Reprinted in full from web Source: Crains Detroit