When the University of Michigan and Urban Land Institute convene their Real Estate Forum this week at the Amway Grand Plaza Hotel, one of the many event highlights will be the awards presentations. The honors are highly coveted by those in the commercial field because winning one engraves a lasting mark of industry excellence on an effort few awards can match.
One of the winners this year is Colliers International of West Michigan, long one of the region’s top commercial real estate firms. UM/ULI is honoring Colliers with its West Michigan Sale/Lease-of-the-Year Award for an intricate deal that involved both a sale and a lease that is adding about 200 jobs to the local economy.
But as is typical with Colliers International, President and CEO Duke Suwyn downplayed the firm’s role in the award-winning industrial transaction, saying instead the honor signifies the company is fortunate to work with a host of astonishing clients. In this particular case, those clients were Franklin Partners and Plasan Carbon Composites.
“At the end of the day, it’s just been that we’ve been blessed to work with some great clients. We have some clients that have been very creative and very active in the market, whether it’s an up market, down market or a sideways market, in trying to meet the needs of the market,” said Suwyn.
“At the end of the day, that’s just what it is.”
The transaction involved an industrial building at 3195 N. Wilson Ave. in Walker with 198,000 square feet of space in a build-to-suit mode that also offered plenty of office space and many of the amenities a manufacturer needs, such as high ceilings and a substantial power system.
“It’s a beautiful building and is greatly maintained. It’s really a very clean building and has about 26,000 square feet of beautiful office (space). It provides for a great corporate presence,” said John Kuiper, a vice president with Colliers International who specializes in the industrial field.
The structure was home to McGraw-Hill and served as a distribution center for the publishing company until the firm left. It was owned then by an investment group that wanted to dissolve, but couldn’t until it could sell the building. So the investors approached Colliers about finding a buyer.
“They didn’t have an appetite to own it. Their directive to us was to get it sold. They said they had a good history with it, but they wanted to get it off their books and get it sold quickly,” said Suwyn. “And we wanted somebody who could move quickly, understands industrial and has a high probability to close.”
Colliers turned to Donald Shoemaker, whose Naperville, Ill., firm, Franklin Partners LLC, has been very active, innovative and successful in the region as an industrial player. Shoemaker and his crew already had completed eight transactions in the area — even one that literally involved raising a roof to make a deal — and he was ready for a ninth.
“Don saw the strengths of the building, and we moved quickly to get it under contract and sold,” said Suwyn.
Once Franklin Partners took possession of the building, which has a 2012 state equalized value of $2.5 million, Colliers International Vice President Steve Marcusse entered the picture. Marcusse had been researching a company called Plasan Carbon Composites. PCC emerged from parent firm Plasan Sasa, an Israeli-based maker of military products such as body armor, in 2006 when it purchased the assets of Vermont Composites Industries.
VCI made carbon fiber for the medical and aerospace industries, but in 2004, it landed a contract with General Motors to produce the front fenders for the 2005 Chevrolet Corvette. That connection led PCC into the automotive field, where it is now a Tier I supplier to OEMs and has produced carbon-fiber products for the Corvette, Viper and Shelby GT.
Marcusse found it was looking to locate near the automakers.
“They wanted to have a place that had capabilities because they needed the power. But what they particularly needed was a highly skilled work force. They preferred the west side of Michigan,” said Suwyn.
“A big part of it was taking this process to manufacture carbon fiber and shorten the timeframe to do that,” said Kuiper.
Kuiper said PCC had developed a carbon-fiber-making process that produces parts much faster than had been done in the past, which allowed the company to meet the automakers’ schedules and their need to make lighter cars with better fuel mileage.
“They’ve done it on prototyping, on R&D, and now in mainstream production,” he said. “They’re world-class innovators who wanted, at the end of the day, to be in a place like West Michigan,” said Suwyn.
Suwyn explained that when PCC entered the real estate market here, company officials thought they were going to find an abundance of available facilities and be able to pick one up for a song. But that wasn’t the case, as the market for the type of building it needed was scarce, as most that met its requirements already were occupied.
“They said, ‘This is not what we expected.’ So they stepped back and took another look at their situation and the whole market, and they expanded their search rather dramatically to a wider geographic area,” said Suwyn.
But Colliers convinced PCC that the Wilson Avenue building was likely the only one that would meet its needs, and the firm moved in last spring after it signed an eight-year lease with Franklin Partners. “They realized this was the best building in the market. They cut a good deal. They’re putting an enormous amount of infrastructure in that building — an enormous amount of infrastructure,” emphasized Suwyn. “The dollar amount of the infrastructure greatly exceeds the value of the real estate.”
Suwyn, Kuiper and Marcusse will be honored by UM/ULI this week for finding an innovative buyer and then finding a leading high-tech manufacturer as a tenant that not only made the purchase more than a worthwhile investment but also strengthened the economy. When asked to rank the transaction on a scale from one to 10 for satisfaction, Suwyn and Kuiper pegged it at nine.
“It’s world class that we end up with this in West Michigan, I think. It’s critical, it’s important. It’s not something that is subsidized. It’s not something that is being incentivized as a new technology,” said Suwyn. “This is market driven and it will stand the test of time.”