Ann Arbor News building listed for $9 million
The Ann Arbor News building goes onto the market today, creating a high-profile development opportunity in the form of a rare downtown listing combination that includes two buildable lots and a historic office building.
The listing with the local office of Colliers International sets a price of $9 million for the building, adjacent parking lot and nearby parking lot with Ann Street frontage.
“In my opinion, it’s the largest, most visible listing in downtown Ann Arbor,” said Jim Chaconas, co-listing broker with colleague Mike Giraud.
The 1.3-acre property had been home to the Ann Arbor News until it ceased publication in July.
Since then, limited staff has been in the building, winding down operations and preparing it for listing.
David Sharp, a former publisher of The News, has led the building disposition for its owner, The Herald Publishing Co. LLC.
Herald Publishing is an entity tied to Advance Publications Inc., which published the Ann Arbor News until it closed in July. The company also owns AnnArbor.com, and a related Internet company runs Ann Arbor-based MLive.com.
With the listing taking effect, “we’re just hoping it’ll sell and hoping the right customer will see the value in it,” Sharp said.
Initial pricing discussions set a listing range from $7 million to $15 million, Sharp said, before extensive analysis and proposals from other brokerages helped narrow the price.
The listing price is about $1.6 million less than the property’s estimated market value based on city assessments: $10 million for the building and adjacent lot, and almost $600,000 for the 1/3-acre Ann Street lot.
But tight credit markets and a lack of demand for redevelopment projects downtown resulting from the national recession are likely to limit the pool of potential buyers, at least in coming months.
Local developers also have said renovations could be complex and expensive, factors that likely played into the pricing for a property that had been built for - and used for decades - by a single specialty occupant.
“All of the (listing) proposals were cautious, reining in expectations about what the business climate was like today, even in Ann Arbor, and (telling us) not to expect a quick sale,” Sharp said.
Still, Chaconas said the flexibility of the site and his national marketing platform could pull a buyer into the city.
“We’ve already talked to some people who are talking about doing a downtown conference center and hotel,” Chaconas said. “They could keep the (existing) structure and build in the parking lot.”
The building, designed by Albert Kahn, is about 90,000 square feet covering three above-grade floors, including a former pressroom in the lower level of one half of the building.
Much of the building underwent renovations in recent years, and Chaconas said one potential use could be to turn it into a multi-tenant facility. The large floorplates will fill a void in the downtown market, he said, since offices of 15,000 to 18,000 square feet find few options for a single floor of office space.
Despite the visibility of the building on the corner of Huron and Division, it’s the property’s frontage on three key downtown thoroughfares - and its parking lot, which is presumed development property - that’s likely to drive a purchase.
The Ann Arbor News property comes onto the market 4 Â½ years after McKinley Inc. purchased the McKinley Towne Centre at 401 E. Liberty in a landmark $17 million deal. The purchase included the former TCF Bank building that stretches along South Division corner-to-corner from Liberty to Washington, and the two other corners at South Division and East Washington.
McKinley turned the building into a multi-tenant building - luring tenants like Google - and dubbed the area “Midtown," boosting the blocks’ downtown profile as a shopping and office hub between Main Street and State Street.
Josesph Freed & Associates recently completed construction of Four Eleven Lofts on the northeast corner, and McKinley sold its interest in the southwest corner to an entity run by the Illinois-based First Hospitality Group.
Meanwhile, the area continues to evolve into blocks that bridge Ann Arbor’s traditional business district with the campus-oriented storefronts, Chaconas said, with more changes coming when the University of Michigan completes construction on North Quad.
The resulting pedestrian traffic could drive the eventual use. Chaconas even floats the idea of an outdoor cafÃ© in the former press space and loading dock on the southern edge of the building.
The presses can be removed for about $30,000, Chaconas said, a price he said should be low enough to not be a barrier to redevelopment of the property.
As marketing begins, the building won't fall into disrepair until a buyer is found, Sharp said.
“We’re going to keep the builldng maintained, heated and so forth,” he said.