After securing ownership of the eight-story building at 277 Gratiot, Stewart Beal decided to employ an unusual tactic to boost occupancy rates: offer 10% equity in the building to tenants who lease an entire floor.
Beal hopes that the concept is successful and could potentially see it
replicated. "A
lot of people have empty office space in Detroit, and this might be an
attractive way to get people to work together," says Beal. "Anyone would rather own
than rent, but that is often impossible. So if you were an existing business and renting, why not move
into my building? It's a great office space, and we make you our partner."
A company would have to pass an evaluation to qualify for the equity. The lease rate ranges from $16 to $18 per square foot and the floorplate is 3,400 square feet. "Basically, you sign a lease, pay a security deposit and the first month rent and you get 10% of the building," says Beal. "On day one, you would see no benefit, but in five to 10 years it would be a tremendous value." He estimates that in today's market, the equity would be valued at $50,000 to $100,000.
Two of the building's current tenants — Leamon Sowell & Associates and Schooner Consulting — already lease an entire floor and have been offered the deal. Additional tenants include
Blumz,
Liberty Title and Econo Home LLC.
There is a 10-car parking lot adjacent to the property. Beal Properties LLC obtained the building when its previous owners defaulted on its obligations to
JC Beal Construction, an affiliated
company that had recently done work in the building.
Source: Stewart Beal, Beal Properties, LLC
Writer: Kelli B. Kavanaugh