Teams look north to fill downtown office space
By Daniel Duggan

Businesses in the suburbs should be expecting more calls from a 313 area code.

New leasing teams at three Detroit office buildings are all launching campaigns to fill vacant office space with suburban companies willing to bring their businesses across Eight Mile Road.

A three-broker team from Southfield-based Signature Associates takes over the leasing assignment today for the 1 million-square-foot Comerica Tower in Detroit.

Sam Munaco, Garrett Keais and David Miller plan to fill the nearly 400,000 square feet of vacant space though an aggressive push into the suburbs.

While Munaco is a Detroit office specialist, Miller and Keais are suburban specialists who intend to use their top-level contacts to "educate" suburban businesses about the idea of going downtown.

"In a lot of markets, it might be something that they're not thinking about," Miller said. "Five years ago, even three years ago, this is something that people wouldn't do. But people are comfortable with the concept that the city is coming alive again."

Suburban tenants will be pursued not just by the Signature team.

Steve Eisenshtadt, a vice president with Farmington Hills-based Friedman Real Estate Group, was named leasing representative for 1001 Woodward Ave. last week, and the Detroit office of Jones Lang LaSalle was named leasing representative for the Chase Tower at 611 Woodward Ave. in January.

Brokers at all three buildings say the time is right to urge suburban businesses to be downtown.

Eisenshtadt, a longtime Detroit office broker, said the key is in the employees being coveted.

"There was a time when the employers wanted to be near their homes in the suburbs," he said. "But you have a bulk of employees 25 to 30 years old who want more of an urban environment."

Downtown brokers hope to ride the momentum from the recent announcement by Quicken Loans to move from Livonia to Detroit. At One Kennedy Square, Marketing Associates moved from Bloomfield Hills to Detroit, and Health Plan of Michigan moved from Southfield.

Key in hiring Signature Associates was the ability to team Munaco's Detroit experience with Keais' and Miller's deep lists of suburban contacts, said W. Emery Matthews, chief investment officer with Detroit-based Mayfield Gentry Realty Advisors L.L.C. Mayfield Gentry made the decision in conjunction with the building's majority investor, New York-based iStar Financial.

Mathews said Signature seemed a better fit than Grubb & Ellis, which was hired for the assignment in July. Grubb & Ellis confirmed it lost the listing and declined to comment further.

Given the new exuberance, challenges abound to fill Detroit space.

The Detroit office vacancy is 27.9 percent compared with 25.3 percent for the overall market, according to a fourth-quarter report by the Southfield office of CB Richard Ellis.

Most of the absorption in Detroit has been through companies expanding or moving from the suburbs; and the tenants rumored to be looking for space, such as Deloitte & Touche USA L.L.P. and Bank of America, aren't new to the area.

Attempts to bring suburban tenants to Detroit in recent years have failed when the employees of companies were eager to move to the city but top-level executives weren't as eager, said A.J. Weiner, a vice president with Jones Lang LaSalle.

Weiner and the leasing team for the Chase Tower consider suburban tenants to be among the targets.

"We have a targeted suburban strategy, looking at the users we feel most likely to be part of the revitalization," he said. "Because it has to start at the top, if the leaders don't want to make the move, you won't have the motivation you need."