Ann Arbor Business Monthly December 2015 : Page 1

BUSINESS MONTHLY • ann arbor • chelsea • dexter • manchester • milan • saline • whitmore lake • ypsilanti ann arbor area Volume 11, No. 10 December 2015 $2.00 Commercial Of fi ce Space In High Demand Around Town By Duane Ramsey Of fi ce space is in high demand around Ann Arbor especially downtown where there is little space available for prospective tenants in the commercial real estate market. “The market is pretty strong and we hope it stays that way. It’s mostly tech fi rms that are looking for space now including some U-M spin-offs and other start-ups that recently received funding,” said Jim Chaconas of Colliers International’s Ann Arbor of fi ce. “We’ve had a couple of good years after four bad years. Downtown has seen a great resurgence of demand for of fi ce and retail space,” Chaconas said. “Automotive is strong and interest rates remain low. The population grows by about 4,000 people each year bringing in jobs that are paying higher than average salaries.” The vacancy rate for of fi ce space in the entire Ann Arbor market is about six percent but less than one percent downtown. The only sizable space available downtown is the space Google recently vacated, he reported. “The big empty of fi ce space is south of I-94,” Chaconas said. Avis Farms has vacancies of 50,000 and 30,000 square feet INSIDE: Know The Positives & Pitfalls Of Partnerships – Page 4 Lessons In Communication Learned From Irate Customers – Page 5 Maintain Your Records -It Could Be Vital – Page 7 American Institute of Architects Huron Valley Announced 2016 Honor Awards – Page 9 Small Business & The Internet By Mike Gould “Take Two Tablets” – Page 11 Business Briefs – Pages 12-15 Make Plans Now To Place Your Advertising For 2016 Where Businesses Are Reading–– In the Pages of ann arbor area BUSINESS MONTHLY See Page 8 For 2016 Details with 25,000 and 20,000 square-foot spaces available at Research Park. Thompson-Reuters, one of Washtenaw County’s largest employers, was moving into 75,000 to 80,000 square feet in the former Citibank space in Avis South last month, while leaving that 50,000 square-foot vacancy at Avis Farms. It consolidated about 1,100 employees in its accounting and tax business from locations in Dexter and Pitts fi eld Township into the new space. The Michigan Economic Development Corporation awarded the global information services company a $2.4 million Michigan Business Development Program performance-based grant in 2014 to help support local job creation. The company plans to invest $19.9 million and add at least 300 jobs over the next fi ve years in its expansion. “We have an exceptional workforce and deep roots in the community, so we’re pleased and proud to continue growing in the Ann Arbor area,” stated Jon Baron, managing director of the company’s professional segment. “The economic development support from the state is an important factor in our decision.” One of the largest of fi ce leases signed in Washtenaw County this year was with Truven Health Analytics moving into the former Borders headquarters in the Wick fi eld Center on Phoenix Drive. The 134,927 square-foot space now serves as the headquarters for the company and its 780 local employees previously located at 777 East Eisenhower Parkway. “Our new state-of-the-art space has been designed with a more fl exible and opens fl oor plan that fosters collaboration and team building among our nearly 800 employees who work from our Ann Arbor of fi ce. We look forward to continued growth and prosperity in our new location,” Commercial Of fi ce Space (Continued Page 3) ann arbor area BUSINESS MONTHLY P. O. Box 460 Hamburg, MI 48139-0460 PRSRT STD US POSTAGE PAID ST JOSEPH MI PERMIT #335

Commercial Office Space In High Demand Around Town

Duane Ramsey

Office space is in high demand around Ann Arbor especially downtown where there is little space available for prospective tenants in the commercial real estate market.

“The market is pretty strong and we hope it stays that way. It’s mostly tech firms that are looking for space now including some UM spin-offs and other start-ups that recently received funding,” said Jim Chaconas of Colliers International’s Ann Arbor office.

“We’ve had a couple of good years after four bad years. Downtown has seen a great resurgence of demand for office and retail space,” Chaconas said. “Automotive is strong and interest rates remain low. The population grows by about 4,000 people each year bringing in jobs that are paying higher than average salaries.”

The vacancy rate for office space in the entire Ann Arbor market is about six percent but less than one percent downtown. The only sizable space available downtown is the space Google recently vacated, he reported.

“The big empty office space is south of I-94,” Chaconas said. Avis Farms has vacancies of 50,000 and 30,000 square feet with 25,000 and 20,000 squarefoot spaces available at Research Park.

Thompson-Reuters, one of Washtenaw County’s largest employers, was moving into 75,000 to 80,000 square feet in the former Citibank space in Avis South last month, while leaving that 50,000 square-foot vacancy at Avis Farms. It consolidated about 1,100 employees in its accounting and tax business from locations in Dexter and Pittsfield Township into the new space.

The Michigan Economic Development Corporation awarded the global information services company a $2.4 million Michigan Business Development Program performance-based grant in 2014 to help support local job creation. The company plans to invest $19.9 million and add at least 300 jobs over the next five years in its expansion.

“We have an exceptional workforce and deep roots in the community, so we’re pleased and proud to continue growing in the Ann Arbor area,” stated Jon Baron, managing director of the company’s professional segment. “The economic development support from the state is an important factor in our decision.”

One of the largest office leases signed in Washtenaw County this year was with Truven Health Analytics moving into the former Borders headquarters in the Wickfield Center on Phoenix Drive. The 134,927 square-foot space now serves as the headquarters for the company and its 780 local employees previously located at 777 East Eisenhower Parkway.

“Our new state-of-the-art space has been designed with a more flexible and opens floor plan that fosters collaboration and team building among our nearly 800 employees who work from our Ann Arbor office. We look forward to continued growth and prosperity in our new location,” stated Jon Newpol, executive vice president and chief operating officer, Government Services at Truven Health Analytics.

“The City of Ann Arbor has been our company’s home base for more than three decades and we are thrilled to be re-inventing our physical presence in this one-of- a-kind hub of business, culture and learning,” he stated.

The company’s vision is “to improve the quality and lower the cost of healthcare through the better use of data and analytics.”

Truven Health Analytics delivers answers that clients need to improve healthcare quality and access while reducing costs. It provides performance improvement solutions built on data integrity and empirical truth, according to the company.

For nearly 40 years, the firm’s insights and solutions have been providing hospitals and clinicians, employers and health plans, state and federal government agencies, life sciences firms and policymakers with the facts they need to make more confident decisions that directly affect the health and well-being of people and organizations across the U.S. and around the world.

Colliers’ offices in Ann Arbor and New York handled the lease of the new space for Truven. The company was located on multiple floors at 777 East Eisenhower and consolidated its operations by moving onto two floors at the Wickfield Center, reported Chaconas.

There is now 185,742 square feet of Class A office space available at 777 East Eisenhower listed at $25 per square foot with Casey Powell of CBRE.

In other leases of office space by Colliers this year, Keller-Williams Realty leased 8,000 square feet at 789 West Ann Arbor Trail and office space at 2090 South Main leased to the Ann Arbor Credit Bureau. Sky Specs LLC, a drone technology firm, leased 3,400 square feet at 116 North Fourth Avenue downtown.

SkySpecs deploys autonomous drones as an aerial workforce to conduct safe, affordable, and automated infrastructure inspections. The company launched by engineering students at U-M in 2012, like all commercial drone makers, is awaiting regulation of the industry by the Federal Aviation Administration.

Colliers handled the sale of 68.86 acres of vacant land at Jackson and South Staebler Roads to developer HC Investment Holdings, a privately held restaurant development company specializing in the development of the Genghis Grill brand. The land, one of the last large vacant parcels in the Ann Arbor School District, had been listed with Colliers since 2002.

The firm also handled the sale of 1.74 acres at 3850 Research Park in Ann Arbor to IP Development, LLC for redevelopment, of offices at 1300 South Main to WIC1300, LLC; offices at 307-311 North Main to Wickfield Investment; and offices at 302 South Liberty to Matthew Krichbaum.

Colliers has a listing of 26,640 square feet of office space at 2301 Platt Road for lease at $12-$24 per square foot or for sale listed at $3.2 million.

Colliers International became an Independent Public Company listed on the NASDAQ Stock Market and the Toronto Stock Exchange in 2015. It established Colliers as one of the leading publicly traded commercial real estate firms in the world, according to the company.

For companies looking for smaller office space downtown, The Shaffran Companies is the largest owner of small user loft-style spaces in downtown Ann Arbor, according to its owner Ed Shaffran, known to many as “Mr. Downtown.”

“The market is hot, simply on fire like it was in 2004 and 2005,” Shaffran said. “We’re always close to 100 occupied and even small vacancies of 250 and 400 square feet don’t last long. It’s the same for our loft apartments and retail space downtown.”

Shaffran specializes in historic buildings with architectural beauty modernized into highly usable spaces with efficient spatial design for today’s small businesses. The firm represents uncommon office spaces ranging from 200 to 5,000 square feet that feature large open spaces, up to 20-foot ceilings, exposed brick masonry and ductwork, original plaster walls, hardwood floors and other natural materials in locations such as the Goodyear Building and Pretzel Bell Building.

“We’re getting phone calls all the time with some people even offering to buy tenants out of their lease but we don’t go down that road,” Shaffran said.

Outside downtown Ann Arbor, there is some office space available through other commercial real estate firms such as Swisher Commercial.

There are three office spaces available at the Concord Center at 455 East Eisenhower ranging from 1,472 to 3,772 square feet listed with Bart Wise of Swisher. The firm also has listings for office space with 1,200 to 7,500 square feet at 4343 Concourse Drive; 527 to 1,939 square feet at 2245 South State Street; 375 to 1,436 square feet at 2500 Packard Road; and 1,000 to 4,000 square feet at 3025 Boardwalk.

First Martin Corporation has numerous listings for office space including 10,000 to 22,000 square feet of office/research space with overhead door and truck dock located in Plymouth Park at 2311 Green Road ; 3,444 square feet at 2100 Commonwealth; and 9,770 square feet at 2910 Huron Parkway in the Traverwood Business Park.

Some companies have moved to space in the surrounding communities to get what they need for their business.

Akervall Technologies Inc., an Ann Arbor SPARK business accelerator client, expanded into a 15,000 square-foot facility in Saline in 2014 that includes a wet lab for research and development, offices for management and sales, and a manufacturing area.

“Moving to a new facility where we can move confidently towards commercialization and production of the SISU products is a huge milestone for Akervall Technologies,” stated Sassa Akervall, company co-founder and president.

Akervall makes the SISU Mouth Guard and SISU SOVA Night Guard for athletic use. Since the invention of the original SISU mouth guard, it is gaining momentum in the athletic and night grinding mouth guard markets.

Read the full article at http://digitaleditions.walsworthprintgroup.com/article/Commercial+Office+Space+In+High+Demand+Around+Town/2339749/283568/article.html.

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