The Keeler Building at 56 N. Division Ave. is Franklin Partners’ latest project in Grand Rapids. Courtesy Franklin Partners
When Franklin Partners sold off two prized downtown buildings in late February, it was not to abandon the Grand Rapids market but to reinvest in new projects.
The properties, at 99 Monroe Ave. NW and 25 Ottawa Ave. SW, weren’t on the market, but enticing offers entered the office of Franklin Partners’ managing partner Don Shoemaker, and he couldn’t refuse.
“We have investors in our properties that are looking for a return on making a speculative investment,” Shoemaker said. “When we’re finished and the tenants are moved in, we evaluate whether we hold it long term or sell it.”
In both cases, two separate real estate companies were interested in the properties and approached Franklin Partners through its partnership with Colliers International|West Michigan.
The newly launched Vision Real Estate Investment purchased the 12-story 99 Monroe building, while Kalamazoo-based Catalyst Development Co. bought its first major Grand Rapids building in the six-story 25 Ottawa structure.
With the real estate market in a good place and a few capital-intensive projects in the pipeline, Shoemaker said the deals were too good to pass up. Franklin Partners purchased 99 Monroe for $11.8 million in 2012 and 25 Ottawa for $6.1 million in 2014, according to city records.
While the sale prices were not disclosed and city records have not been updated, Shoemaker said the deals made money.
“We liked (the companies), and it just made sense for investors,” Shoemaker said. “We find a building that needs a new vision, and what we have fun doing is transforming a building and creating something new.”
On the heels of the sales announcements, Franklin Partners announced its plans for a building it purchased in January — the historic Keeler Building at 56 N. Division Ave. The seven-story, 170,000-square-foot building has been mostly empty for nearly two decades.
Working with Grand Rapids firm Concept Design, the newest Franklin Partners redevelopment project will transform the century-old structure into a modern office building that potentially 1,200 workers could call home.
The redevelopment will include complete overhauls of the plumbing, heating, elevator, electrical and mechanical systems, as well as new windows. The exterior of the building also will be updated with refurbished stone façade and streetscaping.
Along with a new two-story lobby on the corner of North Division Avenue and Fountain Street, retail storefronts will be emphasized.
“This will basically be a brand-new building once we are done,” Shoemaker said.
Since acquiring 99 Monroe in 2012, Franklin Partners has renovated and leased more than 300,000 square feet of space in the downtown area.
Among the tenants in the projects is Spectrum Health’s IT department, which houses 500 employees on the second through sixth floors of 25 Ottawa, demonstrating the desire of Franklin Partners to attract large employee groups to downtown.
“We pay attention to office trends and what’s happening in cities like Chicago, Boston and New York,” Shoemaker said. “We push our team to educate themselves so we are providing the very best working environments, in the hopes of attracting new talent to downtown Grand Rapids.”
While some might see Grand Rapids as running out of space, Nick Koster, CWD Real Estate Investment vice president of operations, said that’s not true and the Keeler Building is a prime example, along with its 300 Ottawa, 50 Monroe and Calder Plaza buildings.
Koster said the value-add Franklin Partners offers on renovation projects in Grand Rapids is a positive tactic that will continue to keep investors happy in Grand Rapids to help revitalize underutilized buildings in the city.
“For Franklin to come here from Chicago and invest their capital in Grand Rapids is a real statement about the growth and optimism in our city, which the local business and philanthropic community has been nurturing now for more than 30 years,” Koster said. “It’s also nice to see these key assets now transition back to local hands to be operated by local groups with an interest in developing long-term relationships with their tenants and in keeping the profits here in Grand Rapids.”
Despite being a firm from outside the market, the Chicago-area-based Franklin Partners likes the outlook for Grand Rapids’ future and enjoys being a part of the community, Shoemaker said.
He said having visionary leaders in the community such as Orion Construction’s John Wheeler, Downtown Grand Rapids Inc.’s Kris Larson and Mayor Rosalynn Bliss are a good sign the city will continue on its current path. Along with the Keeler Building and 1340 Monroe Ave. NW, Shoemaker said Franklin Partners is pursuing other downtown properties.
“We love the city and we just want to do some more projects here,” Shoemaker said. “It’s a very bullish market, very good place to do business, and I think the growth is going to continue.”