Commercial rents in Detroit on are the rise for a variety of reasons – inflation, rebounding reputation, and recovering city services post-bankruptcy. In response these increasing costs, businesses are looking to the suburbs, specifically Southfield Michigan, to offer more affordable office space in newer buildings.
A recent article by the Detroit Free Press highlighted Ally Financial’s potential move to the Southfield Town Center. Southfield’s suburban location and massive amount of available office space makes it ideal for businesses looking cost effective work space.
Detroit-based Ally Financial, formerly known as the GMAC finance arm of General Motors, is considering a move into Southfield that could potentially affect hundreds of jobs currently situated in downtown Detroit.
Ally is close to signing a lease for about 300,000 square-feet of space in Southfield Town Center, according to Steve Morris, managing partner at Axis Advisors in Farmington Hills, who is not involved in the potential deal, but has been briefed about it.
The company is currently headquartered in Tower 200 of the Renaissance Center in downtown Detroit, where it has about 700 employees.
The Renaissance Center is also world headquarters for GM. GMAC stopped being a part of GM in 2006.
Gina Proia, a spokeswoman for Ally Financial, would not directly comment on whether the company has additional plans for Southfield.
Proia did say that Ally has about 1,300 employees spread across five locations in southeast Michigan, and “has implemented a diligent process to evaluate facilities in the Southeast Michigan area that can best accommodate our needs.”
Some of those employees are already in Southfield, at Southfield Town Center and the Galleria Officentre.
Calls to leasing representatives for Southfield Town Center and the Renaissance Center were not immediately returned. A city of Southfield spokesman said “there is nothing official to share at this time.”
As office space rents have gradually increased in Detroit, a few companies such as technology firm Covisint and Marsh & Mercer, a consulting firm and insurance brokerage, have recently made or announced forthcoming moves to Southfield, where there are still some deals to be had.
A Southfield address also generally offers companies much cheaper parking and freedom from Detroit’s 1.2% income tax on nonresidents and 2% on corporations.
On the flip side, companies including Fifth Third Bank and Benzinga, a fast-growing financial news service, have announced forthcoming moves from Southfield to downtown Detroit.
The Renaissance Center and Southfield Town Center are both considered “Class A” office space and have similar asking rents in the low $20s per square foot gross. However, parking at Southfield Town Center is free.
Ally Financial is now in the business of auto financing to dealers and their consumers, as well as corporate financing and online banking.
Until late 2008 Ally was known as GMAC, the finance arm of GM. Amid the financial crisis, it transformed into a bank holding company to become eligible for a government bailout via the Troubled Asset Relief Program that ultimately reached $17.2 billion in size.
The company has since renamed itself, sold assets, put its subprime mortgage arm ResCap through bankruptcy, and last April completed an initial public offering.
Detroit Free Press: http://www.freep.com/story/money/business/michigan/2015/01/26/ally-financial-southfield-detroit/22352413/
