Blue Cross to Sell Jefferson Ave Offices

[Allan]

Friday, January 7, 2005

The Blues will sell Jefferson Ave. office

The insurer wants $20 million for the site; 500 workers there will move to its HQ.

By R.J. King / The Detroit News

DETROIT -- Blue Cross Blue Shield of Michigan is selling a seven-story office building in downtown Detroit across from General Motors Corp.'s world headquarters at the Renaissance Center.

The asking price: $20 million.

Blue Cross said it's selling the 156,100-square-foot office building at 441 E. Jefferson Ave. to save money and boost its efficiency. The 500 employees at the East Jefferson building will join more than 2,000 other workers at the insurer's headquarters on a 13.5-acre campus at Interstate 375 and Lafayette Boulevard, near Greektown.

"We have a sizable block of vacant space at our main campus, so we plan to take advantage of that and get everyone working together," said Helen Stojic, Blue Cross Blue Shield's media relations director.

The glass office building was renovated three years ago and includes an adjacent 457-space parking deck built in 1997 and 22,300 square feet of storage space.

Office experts say Blue Cross Blue Shield may be hard-pressed to fetch $20 million for the building and parking garage, given the 16 percent office vacancy rate in the region. With so much space for rent, landlords have been offering large incentives to lure tenants, including one year of free rent on a 10-year lease.

"We haven't seen very good prices on office building sales in recent years, so Blue Cross Blue Shield may not get top dollar for their property," said Dennis J. Dilworth, leasing expert at Colliers International, a real estate firm in Southfield. "But the building has a great location and an adjacent parking deck, which are major advantages."

Potential buyers could include an automotive supplier affiliated with GM, a large company looking to relocate downtown or an investor seeking to lease the office building to multiple tenants, said Andrew Farbman, president of Farbman Group, a Southfield real estate.

"The best of all worlds would be for a corporate user to come in and make that their headquarters, but those deals are fairly rare," Farbman said.

You can reach R.J. King at (313) 222-2504 or [email protected].