General Motors is expected to announce Monday afternoon that it is moving its global headquarters in downtown Detroit from the Renaissance Center on Detroit’s waterfront to Detroit’s Hudson Building.
This is confirmed by a person close to the project who insisted on anonymity because they are not authorized to speak publicly.
The Hudson site on Woodward Avenue is the new 1.5 million-square-foot development by Bedrock, the real estate company of Dan Gilbert, president of mortgage lender Rocket Companies Inc. The project’s high-rise topped out last week at just over 681 feet, making it the second tallest building in Detroit, behind the central tower of the Renaissance Center.
More:Detroit’s RenCen History Dates Back to 1977: Key Facts About GM’s Downtown Headquarters
GM spokesman Kevin Kelly declined to comment on the expected news, as first reported by Bloomberg and the Associated Press earlier Monday.
GM CEO Mary Barra and Gilbert will hold a news conference in the building at 4:30 p.m., when they are expected to announce that GM will vacate its space in the Renaissance Center office tower, where it has been headquartered since 1996. That’s when the automaker purchased five of the seven towers there for $73 million, according to the Detroit Historical Society. Farmington Hills-based Friedman Real Estate said it purchased RenCen Towers 500 and 600 in December for an undisclosed price from a New Jersey utility company that had owned them for years.
The AP reported that GM and Gilbert plan to study how to redevelop GM’s RenCen headquarters, but the plan does not involve selling the RenCen. This was confirmed by the Free Press source close to the project.
More:The Hudson Site skyscraper reaches full height and is the second tallest building in Detroit
GM Mandate Helped RenCen Companies
The Hudson site consists of two side-by-side buildings: an 11- or 12-story “office building” with more than 500,000 square feet of office, retail and event space, and a 49-story skyscraper which should house an ultra-luxurious hotel. Edition Hotel and approximately 100 condos and apartments. The Hudson site project began in December 2017 and the buildings could be largely completed by the end of this year.
Since the COVID-19 pandemic, the daily number of workers at RenCen has declined as many GM employees who once occupied the offices there have been working from home. Earlier this year, GM asked its employees to come in on Tuesday, Wednesday and Thursday each week, which helped increase foot traffic in the RenCen to help restaurants and other businesses that rely on office workers for their daily activities.
Steve Ali, owner of Salsarita’s Fresh Mexican Grill located in the RenCen food court on the lower level, said Monday that reports that GM planned to leave the RenCen were “a shock to say the least.”
Last month, Ali and other restaurateurs at the food court told the Detroit Free Press that business had slowly started to pick up thanks to GM’s mandate that people work in the office three times a week.
“I was hoping to see a gradual improvement over the year with the number of tenants there,” Ali told the Free Press on Monday. “I didn’t see it coming. That doesn’t put us in a very good position. This is very shocking and disappointing. I don’t know where this will leave us: even if they revamp it, it will be a long time before it becomes a viable four-tower again.
Reduced number of workers at RenCen
But exactly how many GM employees are assigned to RenCen these days is unclear and GM isn’t saying. As of October 2022, the Free Press reported that approximately 5,000 employees were assigned to RenCen, although many continued to work remotely.
GM’s website indicated in early March that 857 employees worked at RenCen. At the time, GM spokeswoman Tara Kuhnen said that figure had not been updated to reflect increases since the rollback policy was implemented in January, but she declined to provide an updated figure. According to a screenshot of GM’s website dated October 3, 2023, obtained by Free Press, GM then listed 1,320 employees assigned to RenCen.
More:Repeated fires at GM EV factory prompt Detroit firefighters to demand change
Kuhnen confirmed that a “small number” of employees have been transferred to other locations in Southeast Michigan in recent years as commercial and hybrid work arrangements have evolved, but she declined to provide figures accurate.
The vacancy rate in Detroit
Steve Morris, a partner at Axios Advisors in Farmington Hills, said GM’s move to the Hudson Building “leaves a tremendous amount of space for lease” downtown and “increases the vacancy rate.”
Morris, whose firm represents tenants in real estate transactions, wondered who would occupy that space. He said he doesn’t see businesses moving into downtown Detroit from the suburbs, current tenants aren’t expanding and even downsizing, and construction costs for the renovation of existing offices were on the rise.
The downtown vacancy rate was 19% in the third quarter of last year, up from about 14% a year earlier, according to a report from commercial real estate services firm CBRE. Some notable recent moves have been the departures of Meridian Health and BMC Compuware from downtown’s One Campus Martius building (formerly the Compuware Building), which left 130,000 square feet of office space to fill, according to the CBRE report .
More:Detroit’s RenCen is at a crossroads – and only GM knows what’s next
Reporter Jennifer Dixon contributed to this article.
Contact Jamie L. LaReau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Learn more about General Motors and sign up for our automotive newsletter. Become a subscriber.
News Source : www.freep.com
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