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Sunday, 23 December 2012 23:24

Don Shoemaker, Principal, Franklin Partners

Written by  MiBiz Staff
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Don Shoemaker, Principal, Franklin Partners PHOTO: Katy Batdorff
While his company was initially involved mostly in industrial real estate in West Michigan, Shoemaker and Franklin Partners this year expanded their portfolio to include downtown Grand Rapids properties. With smaller margins and overdevelopment making the Chicagoland market more competitive, Franklin Partners is looking for more opportunity in greater Grand Rapids.

“I would like to invest more in West Michigan because of the dynamics of this market and the boom in manufacturing that has gone on. I’d love to find more in downtown Grand Rapids to buy, but I’m always interested in good industrial buildings. This year, I think we’ll start to see more out-of-town buyers from larger markets come to the area looking for better returns in this secondary market. The lenders are already here, and there are institutional dollars available to borrow from the big banks in Michigan right now.

"There is a lot less equity that is looking here, but the debt is available. I think the biggest question for some is understanding the reality that manufacturing is not dead and it’s thriving in Michigan. As far as new buildings, I don’t really expect any new office construction in the next year, but in 2014, if the economy stays strong, then I think there could be demand for it.

"As soon as you get to where tenants are considering new construction, it’s good for pricing, and rental rates go up across the market. For now I think there is enough inventory out there. In a down real estate market like we’re coming out of in office markets, there is usually a flight to quality. So tenants in a B-class building want to come to a Class A building and pay slightly more rent for the upgrade. However, I do see some potential for more build-to-suit projects in the industrial sector. Typically with manufacturing buildings, we buy them, fix them up, lease them and sell them. But we’re reevaluating our downtown market strategy to be more buy and hold.”

Read 3442 times Last modified on Thursday, 20 December 2012 20:25

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