Office space in downtown Grand Rapids, Michigan, became more popular during the first six months of 2014. Several buildings were bought and sold, and the owners of some buildings announced remodeling and/or repurposing plans. As a result, downtown Grand Rapids has been experiencing a minor boom and a rise in leasing rates.
According to one real estate firm president who specializes in real estate in the downtown Grand Rapids area, business is better than he has seen it during the whole of his 17-year career. A 2014 mid-year report published by the Alliance of Commercial Realtors indicates that the number of new leases on office space experienced an 11.5 percent jump during the first half of 2014. The report also indicated that sales transactions increased by 45 percent.
According to the real estate executive, the rising lease rates have also caused the value of buildings to increase. An investment group bought one building, called Purple East, for $1.5 million in May. Another two-story building was bought for $925,000. Two more buildings went for $45 million and another one for $10 million. Numerous other multimillion-dollar transactions were made during the first part of this year.
Prior to making Michigan commercial real estate investments, zoning issues and other concerns must be examined before the purchases and sales are completed. Indeed, especially if one plans to repurpose a building to serve a different purpose, one must examine zoning laws for that area. In the event that zoning or another legal deterrent does not allow for the building to be used for the investor’s purpose, though, it is not the end of the world. Legal strategies can be employed to resolve these issues in many cases.
Source: mlive.com, “Downtown office market was a hotbed as big buildings exchanged hands in first half of 2014” Jim Harger, Jul. 14, 2014