“Exclusively Representing Tenants and Buyers of Commercial Real Estate”
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