Spectrum inks $5 million, two-property deal with Third Coast Development COURTESY PHOTO

Spectrum inks $5 million, two-property deal with Third Coast Development

BY Sunday, November 11, 2018 09:34pm

GRAND RAPIDS — Spectrum Health is the new owner of two more properties along the Michigan Street corridor. 

An affiliate of the health care system recently purchased the two properties at 1697 and 1701 Michigan Street from Grand Rapids-based Third Coast Development LLC for $5 million. 

According to property records, Third Coast purchased both properties in 2008 for roughly $1.3 million. 

For Spectrum, the deal continues the institution’s investment along Medical Mile. A spokesperson for the health system said the purchase decision was purely economical and that there are no development plans for the properties, one of which is a surface parking lot. 

The other property, 1697 Michigan St., is where Spectrum currently operates its childcare facility. 

According to a statement the organization provided to MiBiz, “Spectrum Health purchased property it has rented long-term on Michigan Street. … No changes are planned at the site. The purchase was made after a fiscal analysis determined it was more advantageous to own the property than to rent it.” 

While it’s a straightforward deal on the surface, any changes or improvements have the potential to tie in with Spectrum’s previously announced increased investment in The Rapid for free and more frequent bus service along Michigan Street in that area.

Third Coast also owns a nearby parcel at 1503 Michigan St., which Spectrum Health uses as its “East Michigan” commuter parking lot. 

Third Coast Principal Max Benedict, whose firm partnered in a new $90 million REIT late this summer, confirmed the deal, but declined to comment further on the details of sale. Benedict said the property was acquired before he joined the firm, but noted these properties had at one point been a “legacy project” for Third Coast’s founding principals, Dave Levitt and Brad Rosely. 

Benedict added that his firm has a good relationship with Spectrum Health and said the deal was a result of that history. 

Benedict did not comment on the company’s intentions for the proceeds from the sale.

Third Coast has been an active developer along Michigan Street. In one of its most recent projects, the firm developed the mixed-use Diamond Place project, which includes a Gordon Food Service grocery store. 

As MiBiz reported in August, executives from Third Coast formed a new partnership with Grand Rapids-based Blue Pointe Equities LLC to focus on targeting local deals and attracting new investors to the West Michigan market. At the time, Levitt said the new partnership offers many possibilities for attracting new investors to Third Coast’s existing projects, many of which could be rolled into Blue Pointe’s fund. It also could help identify other acquisitions and provide an exit for Third Coast’s existing investors.

CONTINUED GROWTH

For Spectrum Health, the investment in the properties just west of Plymouth Avenue provides an eastern bookend to its Michigan Street holdings, which are concentrated around its Butterworth Hospital campus to the west. 

The health system also owns a nearby commuter parking lot at 522 Plymouth Ave., just north of Michigan Street. 

Currently, Spectrum is partnering with Grand Valley State University to develop a 420,000-square-foot, 1,220-space parking ramp at 335 Michigan Street for students at the expanding Cook DeVos Center for Health Sciences and Spectrum Health employees. 

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