“Exclusively Representing Tenants and Buyers of Commercial Real Estate”
Joyful Tots Childcare & Learning Center
Joyful Totes Childcare (JT) owns several childcare facilities. However, it can be challenging to find buildings that meet the State of Michigan’s stringent requirements for daycares. A non-profit approached JT and asked them to lease space adjacent to their space to provide childcare for their clients. This created a win-win situation for both organizations. Lynn Drake was hired because of her background in childcare facilities to negotiate lease terms on the tenant’s behalf.
THE COMPASS COMMERCIAL SOLUTION
The location in Warren was an old retail center that had recently been purchased and was in the process of being updated. Retail centers typically provide their tenants with a white box, which includes dry wall, minimal electricity, a drop ceiling, lights, and bathrooms. We toured the space with several inspectors and discovered that the entire space, which included two ceilings (one with asbestos tiles) and a leaking roof, needed to be gutted. The negotiations centered on how the landlord and tenant could work together to get the space up to state requirements for a daycare facility.
Detailed negotiations allowed the tenant and landlord to work together on the build out. A rental rate below market was negotiated
“Lynn’s assistance was instrumental in helping us work with the landlord to lease this location.”
Joyful Tots Childcare – Doctor T. Jefferson
Hostetler Fontaine & Associates
Farmington Hills, MI
Hostetler Fontaine & Associates had been in the same building for 20 years, during the last term of their lease, ownership of the building changed. The previous landlord was very experienced and known for offering a great customer experience. Unfortunately, while the new landlord had good intentions, their lack of experience in owning commercial real estate buildings led to a less-than-stellar customer experience. Thus, Compass Commercial was hired to help the team find a new location.
THE COMPASS COMMERCIAL SOLUTION
The process started with a review of the current lease to identify concerns. Several issues were found. The landlord held 2 months’ rent as a security deposit for the entire 20 years, the lease terms contradicted itself, and the rent was significantly higher than the market rate.
The tenant used the Compass Commercial space calculator to determine how many square feet they needed. The client completed our search questionnaire, which considers amenities, culture, location, budget, and type of building.
Based on this process, Compass Commercial identified over 15 properties that met the client’s requirements. The client’s team decided to tour 5 of the 15 sites. Requests for proposals (RFPs) were sent out to 3 buildings selected after the initial tour. The tenant requested a RFP sent to their current landlord. Upon receipt of the proposals, Compass prepared financial summaries for each location. These included lease costs, terms, and tenant improvement contributions offered by the landlords.
Compass Commercial was able to negotiate a turnkey buildout at no cost to the tenant with 5 months of free rent. In addition, the rent was reduced by 18.5% from their previous rent, for a total savings of 25% over the lease term.
“We reduced our rent and moved into a nicer building. Lynn Drake did a great job of walking us through the process to make sure we were happy with the terms of the lease and the overall building.”
Emily A. Izzo – Corporate Office Manager
William Beaumont Hospital
William Beaumont Hospital came to Compass Commercial with a dilemma: the hospital’s current location wouldn’t accommodate
the hospital’s planned growth of the next few years.
Compass put together a careful analysis of the current space and surrounding spaces, and quickly determined that the hospital was overpaying for the rent in their current space.
Several buildings were identified within a five-mile radius of the current space, and requests for proposals were sent to three locations. The team focused its efforts on negotiations with two
buildings in the immediate area.
In the end, the more expensive option was chosen, simply because other, more important factors came into place. Cost savings were still significant for the hospital;
- the lease rate was reduced by $6.00/square foot on a tenyear deal
- Total negotiated savings of $3.5 million over the course of the lease.
The hospital was also given the right of first refusal to expand space at any time during the lease term should they grow.
Thanks to a more prominent new location, William Beaumont Hospital now enjoys signage that is more easily viewed by more people, bringing more visitors into the hospital.
We never expected to get a $3.5m reduction in rent. Lynn and her team not only saved us money but also time by managing the process and protecting our interests.
– Jim Barrett – Facilities Director Beaumont
Lovin Touch Learning Center
We were referred to the owner of Lovin Touch Learning Center in mid-October 2021. She was under the impression that she had leased a space with a one-year lease and a one-year renewal option. As soon as we reviewed the contract, we saw there were a number of issues. The lease should have been labeled a “sublease,” and it was not. Unfortunately, it also stated that the landlord could give her a 30-day written notice to cancel the lease at any time. Our client worked out an agreement to stay until the end of December, which meant we had less than 45 days to find a location. Given the Christmas holidays, it was really about a month. In addition, daycares are managed by the state and require a number of inspections, as well as several extra items that must meet code.
THE COMPASS COMMERCIAL SOLUTION
Frankly, I was not overly optimistic about finding a location that met the state’s requirements. Since we were in the middle of Covid, getting workers and construction supplies was an issue. After researching over 50 sites in Detroit, we found one.
We identified a larger medical building with a 27% vacancy rate. The building was extremely well cared for so I knew the State of Michigan would not find any issues with the structure. Since the daycare provider worked with children under 3 years old, she was required to be on the first floor, and it just so happened that there was an excellent location on the first floor. The space required a build out and a fence added directly behind it to contain the kids in the outdoor play area. The landlord saw this use as a benefit for the doctors and nurses who worked in the building. The building is in an excellent location, and it is an easy in and out for the parents of the kids who don’t work in the building as well.
Knowing that the construction couldn’t be completed over the holiday, we located another space on the third floor that didn’t require any improvements. The client had to get both locations approved for daycare operations.
The property owner provided a full build-out, including a kitchenette, and created three rooms for the children in different age groups, a door to the rear of the building, and a fence so the kids could play outside safely. We negotiated the right to expand to the adjoining suite if the daycare reaches capacity. The rent for a medical building in Detroit was 15% below market in comparison to similar buildings in Detroit. Additionally, we were able to negotiate a 65-month lease with 5 months of free rent. She was able to get her final approvals to run the daycare out of the building and move into it on January 1, 2022.
“Lynn is a real estate guru and can figure out how to solve any real estate problem.”
– Kelly Bishaw – Owner, Lovin Touch Learning Center
Vivid Millwork & Co.
Sterling Heights, MI
The owner of Vivid Millwork & Company was referred to Compass Commercial by their banker.
Prior to working with Compass Commercial, the owner had looked at a few properties. He had his agent make offers, which, unfortunately, weren’t accepted for various reasons. Like many tenants, he had been in the same building for many years and was on a month-to-month lease. His current building had two halves, and the adjacent tenant wanted to take over the entire building. Since his business was growing, it made sense to find a bigger space.
Our client had started the pre-approval process with their bank, which made our job much easier. We were given a good budget to work with. We spent a fair amount of time reviewing the buildings he had already looked at and discussing why the offers weren’t accepted. Then, we reviewed recent sales comps in the area before starting the search. This search began in the middle of the Covid-19 pandemic, when the vacancy rate for industrial space was less than 4%. This meant that if we found a building for sale, we needed to go and see it within 48 hours of the building being listed and make an immediate offer.
THE COMPASS COMMERCIAL SOLUTION
Compass found 7 sites for sale. Of the 7, there was only one the client was interested in seeing. It was priced correctly, and the building appeared to be in good condition. At the showing, the property manager shared details about the upkeep of the building and what needed to be replaced. We were told right away that there was a timing issue with selling the building, because the building next to it was also owned by the same company and they shared one lot. We would need to wait for the property owner to finish splitting the lot before it could be sold. The building was fairly priced, so less than a week after seeing the building, a Letter of Intent to buy the building was prepared. Less than a week later, we had a signed Letter of Intent, and the attorneys worked out a Purchase Agreement that satisfied both sides.
Due to the lot split, the purchase actually took 8 months. The good news is that industrial real estate was rising in value so quickly at the time the building was actually worth $10/s.f. more than the buyer paid for it by the time the purchase was completed.
“Lynn was very professional, courteous and helpful throughout the entire process. She helped me find a building for my growing business and I would highly recommend her services if you’re looking to lease or buy commercial real estate.”
– Fareed Yousif – Owner, Vivid Millwork & Co.
Compass Commercial was initially hired to help Thumbprint Fulfillment find an industrial building to purchase. There was about two years left on Thumbprint’s lease. This was ideal timing, as it gave us time to find the right building and then upgrade the building as needed.
One day, out of the blue, a woman showed up and told them that she had bought the building where they currently were and they needed to move immediately. She didn’t care if they had a lease, and she threatened to make their lives miserable if their company was not out of the space in a few months. She threw in a few extra threats as well. Rather than fight the inevitable, our client agreed to relocate in 90 days provided the property owner paid for the relocation.
THE COMPASS COMMERCIAL SOLUTION
This is an all-women company, so we needed a location where the women would feel comfortable on a day-to-day basis, which further reduced the number of potential locations. We went through the private and public databases to identify spaces for lease. We sent an email to all of the commercial agents looking for a pocket listing. A few days before the Christmas break, we found a great space that met our client’s criteria. However, the lease wasn’t sent over until the 1st of January, and our client had less than 30 days to move.
The new space had a month-to-month tenant who had to be relocated to another location in the building before Thumbprint could occupy the space. Luckily, Thumbprints staff had hired a moving company before the holiday break. Since it was the middle of January, the movers were able to move the adjacent tenant out. The landlord sent over their cleaning crew to clean up the space, and Thumbprint actually got in on time! Less than 90 days, and they were moved into their new industrial building in the City of Detroit, MI.
“Lynn Drake was very attentive to our needs through our entire search. We initially were looking to purchase a building and she was very resourceful in showing us a variety of options. We then decided that leasing might be our best option. Lynn was able to switch gears and find us the perfect location that met our needs. I’d highly recommend Lynn. Very professional and well connected with resources beyond commercial real estate!”
– Becky Riess – Co Owner, Thumbprint Fulfillment
JFM Consulting Group
In early 2021, during the stay-at-home orders from Michigan’s governor, JFM Consulting Group contacted Compass Commercial about renewing their lease. At this point, there was less than 120 days remaining in their lease term. The client was understandably upset when the landlord sent a request to increase the rent by $5.40/s.f. and increase their parking spaces. This seemed particularly odd when many landlords were losing their tenants due to Covid.
THE COMPASS COMMERCIAL SOLUTION
The client had spent a great deal of money improving their space and it is frankly an amazing suite. She didn’t want to lose her initial investment in the suite. Compass identified 3 buildings which were similar in architecture and amenities. We were able to tour 3 buildings within 2 weeks of being hired. Requests for Proposals were sent out on 2 of the locations. We knew we were going to see a big reduction in rent but were very surprised to see other landlords in the market were willing to make some amazing concessions. In fact, the favorite alternative was $184,000 less over a five-year period.
Before getting out to tour we sent an rfp response to the landlord and frankly their response was very disappointing. Once we had the two rfp responses back from the other two landlords, Lynn Drake contacted the landlord’s agent and shared that we had negotiated another transaction.
Total negotiated savings over a 62-month lease equaled: $94,456
“When my landlord sent me the notice of how much money they were going to raise my rent I was shocked. We were in the middle of Covid and people were moving out of office buildings every where. Lynn Drake had called me to ask if she could help me with the renewal process. I had never used a commercial agent so I was hesitant at first. She provided me with some references and off we went. I can’t thank her enough for her time and dedication to getting my rent significantly reduced.”
– Jane Morgan Owner, JFM Consulting Group
Brendel’s Septic Tank Service
The owner of Brendels contacted Compass Commercial for help with a difficult industrial requirement. They had worked with another agent for close to a year and weren’t able to find any suitable locations. The site requirements were difficult because most cities limit this use for various reasons. To complicate matters, the size requirement of the yard was significantly larger than most of the sites identified. Simultaneously, the vacancy rate in metro Detroit was less than 4%, placing a huge demand on these types of requirements.
THE COMPASS COMMERCIAL
To begin, we contacted several municipalities to discuss where within their cities the use was allowed. Then, we sent emails to all the agents in the area to see if they had any information on sites that were not listed for sale. We identified buildings that could work and then reached out to their owners to determine if they would lease or sell. We set up tours at several locations only to find out an offer had been received the same day as our tour – the client had found a property before bringing us on. The site was less than ideal, and it was only to be used as a last resort. So, we helped the client through the lease negotiations for this site while continuing to look for a better location.
Eventually, one of the client’s staff members noticed a building with a moving truck in front of it. Compass was given the address to research the owner. Identifying the owner took less than 5 minutes; however, finding a contact in their massive corporation was another issue. We looked on LinkedIn and identified a single person in corporate real estate. Immediately, we contacted someone from the firms’ service department, and also reached out to our ITRA Global team to see if they had any contacts within the organization. Sure enough, Brandi MacDonald, our Houston Affiliate, provided me with a name and phone number. Off we went!
I called the contact and explained that my client would like to walk through the property within the next 24 hours. The property had not been listed yet, so it would potentially save the company a significant amount of money if they only had one agent involved in the transaction. An appointment was quickly scheduled. Upon review, the entire team agreed it was the ideal facility for their use. We had already been collecting sales comparisons and came up with a valuation range based upon this data. The day following the tour, we placed an offer on the property at the lower end of the valuation. Our Letter of Intent was accepted within a couple of days, and within two weeks we were under contract with a short due diligence time. Eight short weeks later, my client purchased the property which exceeded all of her requirements.
“No one knows the process, potential challenges and solutions in how to find an industrial building better than Lynn Drake. She started our search for a contractor yard by identifying which cities and zoning allowed this type of use. Then she found us our ideal building to purchase. Lynn is a commercial agent you can trust with your firms real estate needs.”
– Susan Armstrong Owner, Brendel’s Septic Tank Service
Bianchi Public Relations
When Bianchi approached Compass Commercial to assist them with a relocation of their offices, they had been a tenant in the same building for 14 years. In their last round of negotiations, they used an agent who called himself a “tenant representative”. The last agent, who typically worked as a landlord representation, renegotiated a lease above the market rate for the building at that time. This meant that when Bianchi Public Relations asked Compass to assist them, they were paying substantial over the market rate for space in the area. A clause in the lease stated that the tenant had a right to extend the term of the lease for 5 years at market but not below the current rate being paid. No attorneys had ever been used in negotiating the final lease language and the previous tenant representatives could not have read the lease based upon Compass’s review of the agreement.
WHAT WE DID
Compass started the transaction by completing a lease abstract which gives a review of the lease. Several issues were uncovered in the current lease that was completely focused on the landlord’s rights. After the initial review, a list of potential locations were identified and then toured. The three locations were identified as good alternatives and requests for proposals were sent out. Upon receipt of the rfp’ s and review of the financials Compass went to the current landlord to renegotiate the lease.
Bianchi Public Relations decided to renew in place since Compass was able to renegotiate their lease terms while reducing their costs in their current location.
The following concessions were made:
- The rental rate was reduced by $4.00/s.f.
- The reduced rent would start 6 months before the original lease expiration saving the client $8,000 in rent immediately
- 2 free parking spaces were negotiated
- The base year for common area maintenance was reset to 2015
- The $20,000 security deposit held by landlord for 14 years was returned to Bianchi
- The landlord replaced all the flooring with upgraded carpet tiles and wood flooring and painted the suite
- Holdover fees of 200% were reduced to 125%
- The original lease called for the landlord to have 30 days to approve a sublease and the time-line was negotiated down to 10 days which is a normal timeline for this type of approval
- Overall savings on this transaction was over $135,000 on 3,000 s.f. which equates to a 26% reduction in rent over the term of the lease. Plus, Bianchi saved a substantial amount of money by not having to relocate his firm.
“A TRUSTED PARTNER. In almost 30 years of owning a PR agency, I’ve signed several office leases. Unfortunately, I did the first few leases with a broker who basically checked the boxes, and I ended up stuck with less-than ideal deals. Through her thought-provoking posts in the Troy Chamber of Commerce’s social media outlets, I learned about Lynn Drake. After meeting her, I realized that she was not just another tenant rep, but is a trusted tenant advisor and partner with amazing knowledge of the local market, landlords, buildings and nuances. She works hard to understand your specific needs and then to find you the best possible solution at the best possible terms. Even for a small space like ours (3,000 sq. ft.), Lynn went all out on our behalf. And after analyzing the lease we were going to renew, she was not only able negotiate an immediate refund of our large security deposit, but she was also able to negotiate suite upgrades and significant savings. Her acumen and efforts saved us more than $135,000 over the term of the renewed lease – pretty fantastic for a small space like ours! – while getting us some new perks like reserved covered parking. And even after our deals were done, Lynn has been there for us for the past 10 years – answering our questions and offering guidance when landlord or building issues arose. Most recently, during the COVID lockdown, she assisted us with assigning our space to another tenant, allowing us to exit our lease a year early at considerable savings (AGAIN!), and helped us find a new, more cost-effective location that fits our new remote/hybrid work model where our facility costs are a mere fraction of the previous rent. She’s thorough, honest, and efficient … and makes the process as easy, comfortable and pleasant as possible. So, I highly recommend Lynn Drake and Compass Commercial for your commercial real estate needs.”
– Jim Bianchi, President, Bianchi Public Relations
BSB Communications, Inc
Their current building was being sold
A long-time client of Compass Commercial, BSB contacted us when they received a request to sign
an estoppel certificate. An estoppel certificate is a legal document often requested by the buyer of a
commercial building. It lists the terms of the current lease, and the tenant must sign it stating that
the information is correct. Estoppel certificates are often used to clarify rental arrangements when a
commercial property is under contract. In this case, this was the first indication our client had that
the building where their business was located was being sold. They asked us to review the estoppel
certificate to make sure it was correct before they signed it.
The tenant’s leased premises was a combination of office and warehouse space with a drive-in bay,
all of which is commonly referred to as “flex space.”
This requested change in ownership of the building occurred in mid-2020, when non-essential
companies in Michigan were not allowed to go to their business locations due to Covid. As many
organizations soon realized, not everyone needed to come into the office anymore. BSB didn’t think
they would need as much office space in the future. With two years left on their lease and a new
building owner who the tenant had not met yet, we were asked to renegotiate their lease agreement
with the new owner.
WHAT WE DID
They still needed the warehouse; however, based on business changes, they needed to cut down on
their office space. We met with the management team to review the shift in space requirements.
Then, we set up an appointment with the new landlord to meet and discuss possible space options.
Longer term leases increase the value of a building. Even though the tenant needed less space,
renegotiating the lease was in the landlord’s best interest due to our client’s willingness to extend
their lease term. We negotiated a decrease in the square footage of the space by 21% while
extending the lease term. Total savings negotiated on the client’s behalf: $131,400.
“BSB prides itself on being focused on telecommunications and leveraging our expertise to deliver results for our clients. We quickly realized that working with Compass Commercial and Lynn Drake, was going to produce results for BSB. As someone
that focuses on tenant representation, it was clear that Lynn was representing our interests.
And, her market knowledge and expertise provided us with a high degree of confidence. At all times, we felt Lynn and Compass Commercial had our back. What could have been a far more stressful process turned out to be successful move to a new location we are proud to call our new
– Steve Klenner, Parter, BSB Communications, Inc.
AVE Office Supplies
Quick turn around on space
Ave Office Supplies’ industrial lease was scheduled to expire in mid-2020. The client’s goal was to combine their office and warehouse space together to be more efficient. Unfortunately, with the Covid pandemic, commercial agents were banned from showing buildings. Once the ban was lifted by the Governor of Michigan, Ave Office Supplies reached out to Compass Commercial to help them relocate their warehouse with less than ninety days’ notice.
WHAT WE DID
Compass Commercial worked with the client to determine their needs, which included the following: offices for staff, an air-conditioned warehouse with 14’ ceilings, one drive-in overhead door, and assigned parking for their box trucks in the parking lot.
The vacancy rate for this type of space was less than 3%, so Compass Commercial sent an email to all industrial agents asking if they had any pocket listings. Then, we reviewed public and private multilistings to find additional buildings.
Ultimately, the team toured 3 locations.
The space at 21327 Hilltop in Southfield was chosen because it met all their needs and the landlord was able to negotiate and prepare the building for their use quickly. In addition, the landlord made requested repairs to the space, and the client was able to move into the new location without having to hold over at their current space.
“Compass Commercial did an excellent job of quickly identifying the space we required that met our budget.”
– Carol Kirkland, Owner, AVE Office Supplies
Madison Heights, MI
20,000 Square Feet Industrial Space
Lynn Drake was hired to find an industrial building 20,000 s.f. or larger with cranes in the tri-county area.
WHAT WE DID
After searching the market and making multiple offers the best solution was the purchase of 75 Bart Ave, Warren, MI.
- The building purchased had 10,000 s.f. more than initially required. Today they are using 100% of the building and running 3 shifts.
- The building had three separate areas with a crane in each area.
- The site is significantly bigger than the buildings so there is room for expansion.
The purchase price came in 30% below the appraised value.
“Whenever I think of real estate, I think of Compass Commercial. They helped me find an industrial building in Madison Heights significantly below market!”
– Vinita Gandhi, President, Pioneer Plastics
Pictures from Pioneer Plastics Website
10,000 Square Feet for Purchase
Our client wanted to purchase a minimum 10,000-square-foot building at M-59 and Van Dyke. She had been to the bank and was fully qualified to purchase such a building. Our job was to identify one for purchase.
WHAT WE DID
With the economy pushing prices up, there weren’t a lot of buildings for sale. Most of the ones we found were either 30% to 50% above market price or hadn’t been maintained properly. After looking for several months, we found a building that had recently been reduced in price and didn’t appear to need a lot of work.
We negotiated an inspection period of 30 days to check out the building. Unfortunately (or fortunately, depending on your point of view) the building hadn’t been well maintained and would require over $100,000 in repairs. The sellers weren’t willing to make any adjustment to the sale price, therefore my client walked away, and her deposit was returned. This process of discovery saved her a great deal of money and heartache.
We continued to search the commercial mls and sent all the agents in the area an email asking them whether they had a building for sale. One reached out to us with a building that hadn’t been listed and was located a block from the requested intersection.
- A letter of intent was sent to the listing agent within 24 hours and a purchase agreement was signed within one week.
- The building inspection found only a few minor repairs to be necessary.
- The building had over 20,000 square feet of space total. With the major tenant moving out, freeing up 10,000 square feet, the client had the exact square footage she needed for her business.
- The building had 10 remaining tenants and all of the leases were sent to us for review.
- There were no issues found with the title work or environmental and building maintenance during the due diligence, and the building closed 45 days after the purchase agreement was signed.
“Working with Lynn Drake and the team at Compass Commercial was crucial in finding and getting the building I was looking for. When the realtor for the building we were looking at was non-responsive, Lynn went above and beyond to track down the owner of the property and make him aware we were interested in the building. If you want someone who works to get you what you want at the best price, hire Lynn and her team at Compass Commercial.”
“Thank you so much for your hard work, persistence and the personal care you provided in helping us find the “right” building. Your efforts are much appreciated.”
– Misty Delegato, Founder, Relevar Home Care
Photos obtained from Bing Images, realestateone.com
38221 Plymouth Rd, Livonia Mi
5,000-10,000 Square Feet Office Space
Excellerate Associates offers training classes and coaching for businesses. Excellerate leased space on a month-to-month basis in a two-story building in Livonia, where they were a tenant for about 14 years. The building owner ran his business out of the same building. As the building owner’s business grew, he kept reducing Excellerate’s space. In 2017, the building’s owner decided to buy a larger building for his growing business, and he put the entire building that included Excellerate’s space up for lease. The building’s owner somehow forgot to mention this to Excellerate and only gave them two weeks’ notice that they would no longer have a space. Finally, he agreed to give Excellerate an extension through the end of the year, which gave the business’s owner, Lisa Mininni, about 4 months to find and purchase a building. Lisa wanted to expand her business so that she could hold seminars for up to 100 people on site; plus, she wanted to open a coworking space for small business owners.
WHAT WE DID
We asked Lisa to determine her budget and talk to a bank to determine how much of a mortgage she would qualify for. We discussed the ideal location, building size, and parking requirements. We completed a site search on the various multiple listing services and sent an email to all the commercial agents in the market.
Compass identified a substantial number of properties for sale in the requested search area. We toured 4 locations and put in an offer at 38221 Plymouth Livonia. Compass negotiated a 20% sales price reduction, and we provided a timeline showing key dates for the client to follow. The closing was just days before Christmas, which Excellerate got to celebrate in their new, permanent home.
“After leasing for over a decade, it was time to purchase a building to headquarter my business mentoring company as well as expand to a co-working and conference facility. Lynn provided expert advice along the way, like finding the right location, the ideal square footage, and ideas for a mixed-use space. She was there when I walked the building pointing out things to consider and was there when I closed walking me through the process, including a checklist to make sure nothing was missed. Lynn is incredibly caring, savvy, and sharp. I highly recommend her.”
– Lisa Mininni, President, Excellerate Associates
Photos Received from Lisa Mininni, ExcellerateAssociates.com
Art of Custom Framing
10,000-20,000 Square Foot Building
The Art of Custom Framing was leasing a building located in Clawson, Michigan. There was a structural issue with the building, which caused water from below the cement floor to seep through the floor, leaving puddles in the storage area. This was a huge liability for a business that works primarily with paper. Moreover, the Tenant’s business had grown substantially, and they needed to double their space. Their lease was set to expire in a year.
WHAT WE DID
Compass Commercial was hired to find a building to purchase in the same area. Compass asked the client (coincidently, named Art) to go the bank to get preapproved for a commercial mortgage, while we sent out emails to both commercial agents and residential agents in the area looking for buildings for sale between 10,000 and 20,000 s.f.
Compass literally found The Art of Custom Framing the most uniquely ideal building possible. This 20,000 s.f. building on Rochester Rd. in Troy, MI was formerly a racquet ball club. The racquet ball courts were still intact, including the hardwood floors in each court, which turned out to provide the ideal place to feature artists’ work.
The company that had purchased the facility after the club closed had converted the 2nd floor into storage with a wide stairwell and elevator. Half of the second floor was leased out to a company that teaches archery to kids and adults. Compass negotiated a lease for the archery company to take over the entire 2nd floor. This helped significantly reduce Art’s rent. In addition, the archery tenant brought prospective clients into the building who had time to shop while their kids practiced.
Just 2.5 miles north of their old location, The Art of Custom Framing is now on one of the most traveled streets in Oakland County. The number of clients visiting the store skyrocketed due to the new location, which increased the revenue for the building.
“Lynn was very professional, very patient, diligent, and very thorough in the search for a new building for me. If you are looking move or renew your lease you want her on your side.”
– Art Bashi, Owner, The Art of Custom Framing
Girl Scouts of Southeastern Michigan
20,000 Square Feet Office Space
The GS had been in a long-term lease at the “Fischer building “in Detroit, Michigan. Their rent was significantly over market value, and they had more square footage then they needed.
During their occupancy, the GS faced many issues as a tenant in this building. These included the building going into bankruptcy, continual maintenance issues that caused property damage to the space and furniture, and osprey (a protected bird) building nests next to the windows so that the tenants couldn’t use the adjacent space.
Compass was tasked with identifying potential buildings to lease in the Detroit market that didn’t charge for parking.
WHAT WE DID
More than 20 potential buildings were identified. The team toured 7 buildings and made three requests for proposals. One of the buildings under consideration was the “Fischer building”. The building had been purchased out of bankruptcy, and the new landlord was working to catch up on the maintenance. However, while doing site plans for the space, they discovered that there were so many columns in the proposed space that it couldn’t be laid out very efficiently.
Negotiations on the remaining locations
were completed simultaneously. In the end, they chose 1333 Brewery Park. Compass negotiated the following points on the GS’s behalf:
- Total savings per year in the new location: $305,150/year over a 10-year period for an overall reduction of more than $3M.
- Included an annual rental reduction of over 20%.
- Included an annual reduction in expenses of .90/s.f. for water (this charge is not usually a pass-through expense in most office buildings).
- Included an annual reduction of operating expenses by .30/s.f.
- Included a reduction of square footage by 41%, which was due to changing to an open work environment and eliminating several existing columns in the space.
- New landlord contributed $25.00/s.f. toward the build out.
- Tenant signed a 10-year lease with the ability to cancel the lease in the 7th year.
- Fenced in safe campus area with security 24/7.
- Free parking for all employees and visitors.
- Four free designated parking spaces directly in front of the tenant’s new space.
- Four free covered spaces for senior staff.
- Facility includes a loading dock that can be used for loading and unloading cookies.
- New landlord is well respected for integrity and maintains the complex in pristine condition.
“I say, before you go out and start looking to lease office space, talk to Lynn Drake!”
– Denise Dalrymple, CEO, Girl Scouts of Southeastern Michigan
Motor City Dance Factory
14,000 Square Foot Industrial Space
Motor City Dance Factory was in a 5,000 sq. ft, one-story office building in Southfield, Michigan. Their original location did not have high enough ceilings for the dancers and gymnasts. There was not enough parking, and the business had outgrown the space long ago.
WHAT WE DID
Compass Commercial worked with the business owner to help her determine how many square feet the business required, and which zoning codes permitted the use of the space. We reviewed location parameters, identified several potential locations, prepared requests for proposals, and completed financial summaries for each location.
Five locations were identified as possibilities. Requests for proposals were sent out to the top three locations. The client leased a 14,000 sq. ft. space at 21630 Melrose, Southfield, Michigan.
- The first four months were free.
- The landlord delivered a turnkey build out, excluding dance floors.
- The tenant received the right to add signage to the building.
- The space included an exclusive parking area.
- The lease included a renewal option.
- There was a cap of $1,000 on replacement or repair of 4 heating and cooling units.
State of Michigan
2,000-3,000 Square Foot Space
The State of Michigan needed a new location for their Secretary of State office in Roseville, MI, because the location under lease did not have enough parking for their visitors.
The State had outsourced their real estate acquisitions to 5 commercial real estate companies operating in Oakland County, including Compass Commercial. Originally, assigned this project, one of the other outsourced providers was not able to find an acceptable location. Compass Commercial was then asked to find a location within the same search area.
WHAT WE DID
We used three methods to identify potential buildings. First, we completed a search on the commercial multiple listing service called Costar and Cpix; sent an email to all agents plus a list of developers across the metro area; then the search ring was driven. Calls were made to all potential prospects. Zoning was researched to make sure all submitted sites met the city’s zoning criteria.
Compass found 5 buildings that had not been submitted initially when the request for proposal was sent out.
We set up a tour for the State’s team. Two of the 5 submitted sites were visited, and a build-to-suit at 18809 E. Nine Mile, Roseville, Michigan was chosen. The development company, Pattah Development, oversaw the beautiful build to suite of the space you see above for the Secretary of State.
- The new location had twice as much parking as the prior location.
- The building was built to the State’s specs.
- The rental rate was below market rate.
Picture obtained from Pattah Development