The Penobscot building in Detroit’s downtown financial district is one of the city’s most iconic skyscrapers. Built originally in the 1920, it is actually three buildings that are interconnected. It was the tallest building in Detroit for about 50 years.
The purchase by a Canadian real estate firm is seen as a good sign for the revitalization of downtown by many local market-watchers. This is one of the first major purchases that was not been made by prominent Detroit real estate investor Dan Gilbert, who has recently bought several downtown office towers. He was said to be among the prospective buyers.
The Penobscot is about 50 percent occupied currently, but a spokesperson for the investors say that they plan to offer more competitive rates in order to fill the building.
“By doing that it would hopefully draw some people who either want to switch, move, or come downtown,” the spokesperson said Friday. “The idea is to lure people in with very attractive rental rates and then spend some money to dial up the suites.”
The Penobscot building will require some updates and repair work to the windows and other infrastructure elements.
This overall approach is common as local investors seek to reinvigorate the business district. With many prime properties such as this one holding a relatively low value, this is a good time for long-term investors to purchase in Detroit. Investment is coming from both inside Michigan and from around the world, as evidenced by this purchase by an international company.
Source: Detroit Free Press, “Toronto real estate firm buys historic Penobscot Building for estimated $5 million,” John Gallagher, May 5, 2012.