United States:Ford seeks new tenants to cut costs
By R.J. King / The Detroit News
DEARBORN -- Ford Motor Co., looking to cut costs and generate revenue during a tough recovery period in the automotive industry, is seeking tenants for up to one million square feet of office space in Dearborn.
The space, spread around 10 to 15 separate buildings, will become available next year when automotive supplier Visteon Corp. moves about 4,000 employees into its $300-million headquarters in Van Buren Township. The one-year move by the No. 2 U.S. auto supplier, which includes about 3,000 workers in Dearborn, is set to begin in summer 2004.
"We are now actively marketing Visteon's space," said Sean McCourt, chairman of Ford Motor Land Development Corp., which oversees the company's worldwide real estate holdings. "We're looking to draw office users from large corporations to small businesses to Fairlane."
In some cases, Ford will look for opportunities to relocate company divisions in Fairlane, a 2,360-acre, master-planned community in Dearborn that developed from land holdings acquired by company founder, Henry Ford, during the 1920s and 1930s, McCourt said.
In addition to housing Visteon offices, Fairlane includes some notable landmarks such as Ford's world headquarters, the Ritz-Carlton Hotel, Fairlane Town Center and TPC of Dearborn, a residential golf community.
Landing new tenants for Fairlane could be difficult given a two-year slowdown in the office market because of corporate cutbacks and the sluggish economy, said Andrew Farbman, co-president of NAI Farbman, a worldwide commercial brokerage firm in Southfield.
The vast amount of space coming on the market over a one-year period could mean potential tenants can land attractive lease rates, Farbman noted. Class A office space in Dearborn leases for between $15 and $22 a square foot.
Dearborn has one of the region's strongest office markets with a nearly 90-percent occupancy level in 2002, according to the Feldman Report, a biannual office report by First Realty Co. in West Bloomfield.
"Ford really has an opportunity to draw more major corporations to Fairlane like Oakwood Hospital and AAA Michigan," Farbman said. "It won't happen overnight, but Fairlane has the best overall office market in the state when you consider freeway access, great hotels, strong residential areas and its close proximity to Detroit Metropolitan Airport (in Romulus)."
Visteon plans to keep about 1,500 of its workers in Dearborn, at its technical center and product assurance center at the Southfield Freeway and Rotunda Drive, said Marge Sorge, Visteon spokeswoman.
Ford also plans to sell its Fairlane Training & Development Center in Dearborn to the University of Michigan-Dearborn for $31.7 million by September, McCourt said. Ford, which used the 294,000-square-foot complex for employee training efforts, will lease back 25 percent of the structure to maintain its educational offerings.
Ed Bagale, vice-chancellor for government relations at U of M-Dearborn, said the 8,800-student university plans to relocate its School of Business and School of Education, roughly 2,500 students, to the Fairlane Training Center later this year. Classes will commence in January following $1.1 million in upgrades this fall.
"U of M-Dearborn was founded (in 1959) by a gift by Ford Motor Co., so we're coming full circle again with Ford to expand our campus," Bagale said. "If we had to build Fairlane Training today on 30 acres of land with 1,000 parking spaces, it would cost us in excess of $100 million."
In other news, the former Ford QMP building, which sits on 78 acres at Southfield and Rotunda, will be demolished next year. The site is being marketed to retail, residential and office developers, McCourt said.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....