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Tuesday, 04 August 2015 08:00

Coldwater investor group acquires 7 West Michigan office properties

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Bridge Point Office Park Bridge Point Office Park COURTESY PHOTO

GRAND RAPIDS — A Southwest Michigan developer sees a business opportunity in the tightening inventory of office space in the downtown Grand Rapids market.

That’s why his company decided to invest in the suburbs.

Coldwater-based Prime Office Equities LLC acquired six office buildings in suburban Grand Rapids and a medical office building in Holland from Belfry Development Corp. of Grand Rapids in a deal that closed last month.

The deal included six buildings in an office park on Grand Rapids’ southeast side, near Lake Drive and Sparks Drive, as well as a building at 844 South Washington Ave. in Holland. The seven buildings total more than 300,000 square feet of office space.

Occupancy for the properties stands at approximately 70 percent, according to Blake Rosekrans, an associate at CBRE | Grand Rapids who represented the buyers.

Rick Gates, president of Prime Office Equities told MiBiz that he and his two partners, Tom Kolassa of Battle Creek and Gary Hart of Coldwater, liked the properties’ overall location and the quality of the buildings on the sites.

He also cited the properties’ additional leasing opportunities as an added attraction in the deal.

“We think this property is uniquely positioned,” said Gates, who intends to invest around $1 million in the various buildings. “With prices rising downtown, we think we will pull some people to the suburbs. We have some great property to show them.”

Gates also serves as president of Gates Prime Commercial Group, the firm that will manage the properties.

Upgrades to the buildings will include new art and improvements to the common areas. An exact acquisition price was not disclosed, but Rosekrans said it was in excess of $10 million. Lease rates for the buildings range from $12.50 and $15.50 per square foot.

The Grand Rapids properties will be rebranded as Bridge Pointe Office Park. Existing tenants in the various buildings include URS Corp. and HarperCollins Publishing. The lakeshore location serves as a medical office building for Holland Hospital.

According to CBRE’s office market report for the second half of 2014, vacancy in the Grand Rapids area stood at 17.5 percent and positive net absorption for the period stood at 86,624 square feet.

The Grand Rapids office of brokerage firm Colliers International had the overall vacancy rate for the end the second quarter 2015 at 19.5 percent.

Gates said he owns office properties in four different states but sees a great deal of upside in the West Michigan market.

“We’re very high on the overall Grand Rapids market,” Gates said. “We think the absorption rate will be high for a number of years.”

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