Ann Arbor's 777 building on Eisenhower sold to national real estate investment trust
The 777 Building - officially known as Eisenhower Plaza and now bearing the Thomson Reuters name - has a distinctive presence at the I-94/State Street entrance to the city.
File photo | AnnArbor.com
A landmark Ann Arbor office building is moving back into public ownership following its sale last week to HRPT Properties Trust.
The 10-story tower at State Street and Eisenhower Parkway - long known as the 777 Building, due to its address - was sold along with its neighboring structure, 789 E. Eisenhower Pkwy. Combined, the two buildings are about 400,000 square feet.
City records show an assessed value for the property of $26.6 million, representing an estimated market value of $53.2 million.
A report of the sale surfaced Friday, but the parties involved in the deal still won't comment on specifics.
HRPT [NYSE: HRP] spokeswoman Carlynn Finn said the company will not discuss acquisitions or dispositions until it holds its second-quarter conference call for investors in early August.
In the meantime, the company won't release any other details, including information on who will manage the property.
The buildings have been owned since 2004 by Transwestern Great Lakes L.P., based in Chicago, with a management division in Oakland County.
A Transwestern-related entity bought the building in 2004 as part of a deal to acquire much of the former Great Lakes Real Estate Investment Trust profile. That deal included five office buildings in Metro Detroit, 15 in Chicago, five in Ohio and one in Denver.
Mortgage records from Illinois with copies on file in Washtenaw County show that the Great Lakes deal's original loan for $193 million was modified to a $213 million debt in 2005. Part of that was paid off, leaving a new modified debt as of early this year of $91 million. Several insurance companies joined the Transwestern-related entities in the financing, with Aegon USA Realty Advisors as the master servicer of the loan.
Unclear is how much of that loan covers the purchase price for the 777 building. Great Lakes bought the building for $21.9 million in 1995, then Transwestern added the building at 789 E. Eisenhower Pkwy. to the campus.
Today, the 789 building is fully leased to Proquest. The 777 building is about 90 percent leased, with Thomson Reuters taking much of the space and acquiring the naming rights to the building.
In 2004, when Great Lakes REIT sold itself to Transwestern, the building was at about 60 percent occupancy as former key tenant ABN AMRO - now part of Bank of America - moved to a new building in Avis Farms South.
Transwestern officials said in 2006 that their vision for the building was to reposition it in the market, add value, then sell it. It's been listed for sale twice since 2008.
Meanwhile, HRP's name will change July 1, when it becomes CommonWealth REIT, trading under the symbol CWH.
According to the company's website, HRP owned 518 properties with approximately 66.8 million square feet in more than 60 markets in 34 states and Washington, D.C., representing total investments of $6.6 billion.
HRP stock was trading at $6.83 this afternoon, representing a market capitalization of $1.76 billion.
Comments
kelsey
Wed, Jun 23, 2010 : 10:35 p.m.
I remember the terrific view from Bechtel's sixth floor wherein I had a window all to myself. A tornado came through one time and we were all herded down to the basement to ride it out. When we emerged, the building was still pristine. Next door Wolverine Tower had a few windows blown out. I had heard the building was built with San Francisco earthquake specifications, but I didn't know if that was true. Bechtel was a man's world back then, and any women who attempted to go beyond the level of secretary were subjected to a lot of comment. Indian engineers also got to hear a common epithet. I didn't have any complaints about the building, though. It was rock solid and comfortable.
Paula Gardner
Tue, Jun 22, 2010 : 7:33 a.m.
Tremendous detail on Bechtel! Thank you so much for sharing this part of Ann Arbor's history.
racerx
Tue, Jun 22, 2010 : 1:07 a.m.
To continue, I think Bechtel also built the five Bay Bridges in Northern California (Bay Bridge, San Mateo, San Raphael, etc..). It's one time president was Geogre Schultz who was former President Regan's Secty of State. And, if I recall correctly, Bechtel was also instrumental in building the oil fields in Saudi Arabia.
Ralph Katz
Mon, Jun 21, 2010 : 10:23 p.m.
Among other things, Bechtel built Hoover Dam, BART in San Francisco, the Washington Metro, King Fahd Internation Airport, the Greenwood and Bell River fossile electric plants for Detroit Edison, and Boston's "Big Dig". They were the world's largest privately owned construction and engineering company (I cannot say if this is still true.) Over many reorganizations, the entity at 777 was SF Power Division - Ann Arbor Office, Ann Arbor Power Division, Bechtel Power Corporation - Ann Arbor Office, and maybe more. Other Bectel entities lived there at various times, such as Bechtel Associates Professional Corporation. The Midland project was supposed to cost $350 million, a surprisingly lowball figure for that time. The Ann Arbor Office had about 600 employees by 1976, and 3 or 4 floors had never been completed. An environmental group sued and had Midland construction halted for over a year, and Bechtel downsized Ann Arbor to about 350. When construction restarted, employment ramped up to 2200, ultimately filling the 777 Building, and overflowing to the Wolverine Building across the street. Phones were linked with a cable under Eisenhower Parkway. These were turbulent times, and contractors had pretty much continuous work, building and remodelling spaces as requirements changed. A full-time painter kept the old and new walls painted all the same color. But, the Midland project was not going well. It had taken so long to build, that new NRC requirements caused space issues. There was no space for additional cabling and equipment. The site was built on fill, but the fill was only compacted where there were expected to be structures. So, when extensions were built onto the Controls building to house newly-required equipment, it sank. The radical solution involved freezing the soil (to prevent water coming in from the cooling pond), and shoring up the sinking portions of the controls building from below. Construction costs had soared to $4Billion. All the part-time and contract employees were let go, Bechtel's portion of the Wolverine building was vacated, and employment fell to 1600. When the Midland project was terminated, employment dropped all at once to 350. A major project office had become a small project office. VP Howard Wall put his house on the market for the incredible (then) sum of $450,000, and it took quite a while to move. "For Sale" signs erupted throughout Georgetown. After downsizing, Bechtel sold the building to Eric Yale Lutz Associates, renting a couple of floors (7 & 8 I think.) With attrition and transfers, by 1987, Bechtel employed 87 people in Ann Arbor. But they proved tenacious, selling engineering studies, and working on small projects, so that by 1991 employment rose to 150 people, and was predicted to hit 200 again by the end of the year. In early April of 1991, all the employees were brought into the cafeteria to announce that the office would close in 3 months. The closure date of their "permanent Ann Arbor Office" was not surprisingly at the end of their current building lease, and also marked the point at which their 1800-line Nortel SL-1 phone switch was fully depreciated. Their computer networking hardware went to a short-lived office in Naperville, IL. The SL-1 was sold and hauled away. The 3-meter SBS satellite dish on the roof was dark by then, but remained on the roof, a high-tech relic, for a number of years.
AlphaAlpha
Mon, Jun 21, 2010 : 9:20 p.m.
To one Eric Yale Lutz...
a2grateful
Mon, Jun 21, 2010 : 8:16 p.m.
777 was the site of Bechtel's Ann Arbor Power Division. At the time of 777's construction, Bechtel was the world's largest engineering and construction company, specializing in power plants. The Ann Arbor Power Division was involved with Fermi II nuclear, Midland nuclear, Belle River coal, Monroe coal handling, Palisades nuclear upgrade, and others. After the Three Mile Island incident, the nuclear industry was subjected to intense new regulation, resulting in triple backup systems at nuclear plants. This meant that nuclear power plants in construction phase had to meet the new standards. The structures were not designed for all of the extra piping, related seismic attachments, and other related equipment. Construction completion was complicated to an extent that plants were no longer viable. For example, the Midland nuclear plant was never brought online, being converted to a different power source for steam generation. In fact, the new regulations were so stringent, that no new nuclear power plants have been built since. The power plant engineering and construction industry collapsed in the mid 1980s. Bechtel's Ann Arbor Power Division closed, costing Ann Arbor about 1,800 jobs. Bechtel sold 777 shortly thereafter.
Paula Gardner
Mon, Jun 21, 2010 : 5:11 p.m.
The 10-story building was constructed in 1973, according to city records. If any readers recall details on Bechtel, please share.
Sally
Mon, Jun 21, 2010 : 5:01 p.m.
Gee. No mention of Bechtel Power Corp, which (I believe) built the building and certainly inhabited it for so many years?
nowayjose
Mon, Jun 21, 2010 : 3:55 p.m.
At leaset UofM didn't buy it.