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Sunday, 22 November 2015 22:53

Fifth Third Bank explores sale of downtown Grand Rapids campus

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Fifth Third Bank has quietly started looking for a buyer for its long-time campus in downtown Grand Rapids, which was built in the 1960s. The banking and financial services firm issued a request for proposals to select developers earlier this year. The site’s major tenant, law firm Warner Norcross & Judd, announced it planned to move out by 2019. Fifth Third Bank has quietly started looking for a buyer for its long-time campus in downtown Grand Rapids, which was built in the 1960s. The banking and financial services firm issued a request for proposals to select developers earlier this year. The site’s major tenant, law firm Warner Norcross & Judd, announced it planned to move out by 2019. PHOTO: Joe Boomgaar

GRAND RAPIDS — Fifth Third Bancorp. has quietly put its longtime home in downtown Grand Rapids on the market, the sale of which could reshape the city’s central business district, MiBiz has learned.

Executives at the bank — West Michigan’s largest regional bank — stopped short of saying a sale is imminent, but multiple sources said developers have started looking at the campus along Lyon Street between Monroe and Ottawa avenues.

Situated at the gateway to the downtown Grand Rapids business district, the site consists of two buildings — a 10-story tower and a squat five-story building — constructed in the 1960s as the headquarters of the former Old Kent Bank, which Fifth Third acquired in 2000. The site also includes a large surface parking lot with additional below-ground parking.

“We’re exploring opportunities for what this campus could be for the community, but we’re still up in the air,” said John Zimmerman, a senior vice president and affiliate market director at Fifth Third Bank. “The campus has such great potential to be a destination hub to drive growth in downtown.”

While Fifth Third Bank may sell its property in downtown Grand Rapids, the banking and financial services firm plans to remain as a tenant under any new ownership, Zimmerman said.

The news that Fifth Third Bank could sell its property comes on the heels of an announcement earlier this month that the largest tenant in the bank’s building at 111 Lyon St. NW is moving out.

In the next few years, law firm Warner Norcross & Judd LLP intends to vacate its space in Fifth Third Center and move into a new twin-tower development proposed by Orion Construction Inc. at the southeast corner of Ottawa Avenue and Lyon Street in downtown Grand Rapids.

The law firm will be the anchor tenant in the proposed mixed-use project, which isn’t expected to be completed until 2019, the same time its lease in Fifth Third Center is set to expire.

Zimmerman said Fifth Third gave Warner Norcross the option to renew its lease. Executives at the law firm declined to comment for this report.

Earlier this year, Fifth Third Bank sent out a request for proposals (RFP) to approximately six developers to explore a sale of the building.

Included in the list of companies asked to submit proposals for the site were CWD Real Estate Investment, Franklin Partners LLC and SIBSCO LLC, according to sources.

Two of the three developers declined to offer any specifics on their intentions to submit proposals, but told MiBiz they had some degree of interest in acquiring the property.

When asked whether he was looking to purchase the Fifth Third Bank site, CWD Managing Partner Sam Cummings simply said, “Maybe.”

Cummings added that CWD keeps private its acquisitions and its strategy for purchasing assets until a deal is completed. The company owns the adjacent 10-story Calder Plaza Building, which it purchased late last year for an undisclosed sum and is in the early stages of renovating.

Likewise, Don Shoemaker, a principal at Franklin Partners, a Naperville, Ill.-based developer with office and industrial holdings in the Grand Rapids area, said the Fifth Third site fits in with his firm’s other downtown properties.

“We like to find buildings that need to be repositioned for the next life,” Shoemaker said, also stopping short of indicating any firm intention to submit a proposal for the property. “We’ll look at any value-add opportunity.”

However, Grand Rapids-based SIBSCO LLC will be submitting a proposal for the site, said Charlie Secchia, principal at the Secchia family development company.

Specific details on future uses of the site remain scarce, but commercial real estate sources said the buildings would most likely remain as offices after renovations, with increased ground-floor retail or restaurant uses. A new building could also be built on top of the surface lot, sources said.

As they stand, the buildings — considered Class B office space in today’s market — would probably sell for between $60 and $90 per square foot, according to industry insiders.

“The value in that campus is more in the land than buying old buildings,” Secchia said.

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