45 days into the assignment an investor was secured for the center with a cash closing set for 30 days. During this time the Brokers for TAD were able to secure lease commitments for all but 1200 square feet of the center. The closing was delayed for 60 days, as additional time was needed by the Marshal Service to clear title.

The deal was completed at a $100 per square foot value; nearly double the average sale value for similar properties being closed in this market.

In an email sent Thomas Duke Company and lead broker on the assignment, Brian Campbell, Portfolio Manager for the Marshal Service’ properties, commented,  “This was not an easy transaction and would not have been possible without your expertise and guidance.  Thank you for everything.”

For more information on the above deal, please contact at info@thomasduke.com or 248.476.3700.

We also completed these additional deals in 2011:

•  Patchen Elementary School- 43,000 square foot elementary school.
•  Palmer Crossing- 23,000 square foot four building retail center anchored by CVS.
•  Westgate Plaza- 24,000 square foot in-line retail center.
•  Plymouth Power Sports- 14,000 square foot single user retail building.

For more information on the above deals, please contact at info@thomasduke.com or 248.476.3700.

It was a case of Medicare fraud, seized assets and a man who was sent to jail.

But at the end of the case, someone still has to help clean up the mess. In this case, that meant two brokers had to sell a strip mall seized by the government.

Over the last half-a-year, Terrance Bixler and Steve Valli of Thomas A. Duke Co. helped the U.S. Marshals Service sell a 25,000-square-foot strip center in Canton Township as one of the assets seized in the case.

It was a job that came seemingly out of the blue with a call from the U.S. Marshals, Valli said.

It seemed the government needed to have a building sold and had heard good things about Bixler and Valli in regards to the Canton-Northville area.

“They flew in, met with us and hired us,” Valli said.

Not too concerned with the back story, Bixler and Valli started marketing the building.

It was a rare occasion where commercial real estate needs to be liquidated as part of a fraud case. The past owner was a guy named Ali Makki.

Makki, as it turned out, had been skirting the law when it comes to billing Medicare. In July, 2010, he pled guilty to one count of health care fraud, one count of falsifying an immigration document and one count of falsifying a tax return. Note: he was originally charged with 40 counts, according to the 2006 press release, accused of $500,000 in over billing.

He was sentenced, in October, to two years in prison and a fine of $144,000.

According to court documents filed with U.S. District Court in Detroit, he had been charging the government for health care services not performed or not needed. He was also, according to the charges, signing-off on the documents needed for people to immigrate to the United States without actually seeing the people.

In 2006, the US Immigration and Customs enforcement put out a press release laying out the accusations. Namely, Makki gave a clean bill of health to 512 Green Card applications, when he didn’t test them. He also reported two people did not have syphilis when they had tested positive, according to the press release. Read the press release for yourself here.

And with this money he was making, he also purchased the retail center.

The U.S. Marshals got a court order in June, 2010 in U.S. District Court to have the retail center put under their control as part of a civil case against Makki.

But bad Medicare ethics and government charges were far from Valli and Bixler’s minds. They put up the listing and started doing tours.

And as oddly as they got the listing, they found a buyer as well, five months later.

Out of the blue, again, the phone rang and it was a prospective buyer. He’d driven by, saw the strip center and the sign and made a call.

The buyer, according to CoStar Group LLC, was Haggerty Palmer Associates LLC. According to state records, the owner of the LLC is Doraid Markus.

The properties located at 1735 Haggerty, 1791 Haggerty, 41128 Palmer Rd and 41212-41266 Palmer Rd go as Palmer Crossing.

In this market, they were able to sell the buildings after 5 months of marketing. And while it has CVS as an anchor tenant, the center still has a quarter of the space vacant with more soon-to-be vacant.

Amidst the headwinds, it sold for $2.5 million, or $100 per square foot — double the average price per square foot for a retail building, according to CoStar.

When I spoke with Valli about the deal, he said it was interesting to work on, but dealing with layer after layer of government agency on the sale was a slow process.

“There was a national group, a local group, an agency that acted as a real estate entity,” he said. “It was interesting, but it was a slow process.”

I asked Valli if this was the craziest deal he’s ever worked on.

“Not even close,” he said laughing.

He said I’ll have to read about the rest of the crazy deals when he writes a book someday. If they’re like this one, it’s a book I’d definitely read.

Now, in Southeast Michigan, the market seems to be righting itself. The demand for residential land is picking up as buyers realize incredibly low prices for both improved and unimproved land.

In Wayne County, 34 percent more building permits were issued in 2010 than in 2009. For example, Northville Township and City granted 45 building permits in 2009, but more than double that number—100 permits—in 2010. In Plymouth Township and City, the turnaround was even stronger: In all of 2009 only 4 building permits were granted there, but by the end of 2010, the number had surged to 112.

Oakland County building permits increased by 45 percent between 2009 and 2010. In the city of Novi, the 64 permits granted in 2009 grew to 174 granted in 2010, while in Lyon Township the number grew from 57 to 112.

Watching these numbers closely, we offer the following observations:

Subdivisions left unfinished when the market collapsed now offer builders infill opportunities at bargain prices. Low land costs have helped create margins that make the finished home very affordable and competitive. Plus, historically low mortgage rates are bringing even more buyers to these builders.

The very farmers who sold large parcels to developers during the run-up in pricing are, in some cases, buying back the undeveloped acreage. This land may return to agricultural use for the time being, waiting for the next cycle of development.

While we are unquestionably still in a deep downturn, land is moving from weak hands to strong ones. Substantial gains seem possible in the near future for far-sighted investors and developers.

If you are one of these, we have multiple developed and undeveloped parcels now available at prices not seen in decades. It will be our pleasure to partner with you.

Joe Tuomikoski (jtuomikoski@thomasduke.com)
248.476.3700 ext 1109

Tenants will begin to experience this care and attention immediately as we begin with a first floor renovation. We have all new finishes selected for baths and hallways. Carpets, wall coverings, ceiling tiles and light fixtures will all be new—and environmentally friendly.  This renovation on the first floor will give present and future tenants a picture of what to expect on the floors above.

We also plan to refurbish suite entries and each suite’s interior finishes—floor and wall coverings, ceiling treatments, doors and lighting—as the space is leased, built out, and /or renovated for lease renewals.  Common areas, including the elevator cabs and the parking garage, won’t be overlooked, either. When spring brings warmer weather, expect to see new sidewalks, improved parking areas and refreshed landscaping.

The brokerage community will find it easier to bring new tenants to the building and to negotiate leases. Our history of close cooperation and quick, no-nonsense deal making will help us fill the building and meet our lease-up projections. New tenants will be pleased with their broker’s advice to locate to Powerscourt.

Our investors are also excited about our plans and intentions for Powerscourt. As we better manage its annual expenses, the result will be better vendors, better care and a better bottom line. Its occupancy will increase, and our return on investment is sure to be satisfying. This is an exceptional property, one we are all going to be proud of.  

Thomas Duke (tduke@thomasduke.com)

The Thomas A. Duke Company was recently—and abruptly—awarded the property management contract for two retail centers, one in Farmington Hills and one in Brighton. Our first inspection made it clear that we had our work cut out for us.

Though the properties were reasonably well occupied, there were no up-to-date leases. Rental rates and terms didn’t meet current standards. Structures and surroundings were neglected and maintenance haphazard. Immediately we set about assessing conditions overall and making a first round of recommendations for a quick turnaround—in the middle of which a rooftop HVAC unit failed.

Needless to say, bringing these properties from careless to professional management poses a considerable challenge. Our key steps will include:

• an audit and the development of CAD drawings to ensure that leases reflect correct square footage;
• a complete, competitive rebidding of all vendors and tradesmen associated with the properties to secure the best and lowest possible operating costs;
• a revision and improvement of the owner’s standard lease, then a prompt renewal of each tenant’s lease with uniform terms and accuracy in billable net charges;
• immediate physical upgrades to parking lots, lighting, landscaping, brick and glass, doors, and painted surfaces; signage and overall site visibility will also be improved.

 We’re well underway, already finding savings on nearly every line-item expense, including insurance. With over 30 years of property management experience, our respected reputation and service volume allow us to realize serious buying power for our clients.

 In a few short months there will be a marked turnaround of these retail centers. Can we bring the same energy and expertise to your property?

 Sincerely,

Thomas A. Duke

• On University of Michigan campus;
• Site plan approved;
• All utilities on site;

 

 

 

We brought several different offers to the seller from local and national investors. The market may have adjusted, but buildings are still being sold and leased.

Each property has specific needs that must be addressed in order to create a successful closing. We pride ourselves on our ability to market each property as required. With careful planning we design a marketing program that will lead to a successful deal.

The reason for our success is very simple. We have developed & successfully maintained an industry exclusive database of over 30,000 active buyers & sellers. We are in need of more properties to satisfy the appetites of other buyers in the market.

  

FOR MORE INFORMATION ABOUT THIS TRANSACTION OR TO DISCUSS YOUR PROPERTY, PLEASE CONTACT

James Porth, CCIM

jporth@thomasduke.com

T: 248.476.3700

F: 248.476.3560 

One remedy: account for every square foot through a master of the building with all usable and common areas identified. You can do this minimally through a simple field measurement or take-off from the building plans, but optimally through a computer aided design (CAD) drawing. Given today’s technology age, there is little excuse for not accurately calculating the usable and rentable square footage, or correctly charging tenants. The discovery of previously unaccounted for rentable area provides landlords with a fair return for their investment in CAD drawings.

Developing a comprehensive CAD file does not need to be done overnight. Start by creating a new suite drawing for each vacant space marketed online. This practice aides the brokerage community in showing and signing new tenants. All parties gain comfort in professionally drawn and measured suites.

 While we’ve maintained our building plans and suite measurements on CAD for many years, our design firm recently purchased new state-of-the-art CAD software that gives us terrific advantages:

1. Superior ability to tie very accurate suite plans to stacking plans,
2. sorting features on vacancies,
3. 3-D views of suites or entire floors,
4. easily understood square footage calculations.

We can create quick construction material take-offs and benchmark construction pricing for standard materials and finishes. I can’t over emphasize the benefit of the ability to make impressive presentations quickly to tenants and their brokers, as well as make intelligent decisions pertaining to improvement budgets. Simply put, CAD technology and online space plan access help all parties transact business quickly, fairly and creatively. Consistent application of these practices helps my firm earn repeat business.

 Thomas A Duke is a fourth generation building and real estate owner located in southeast Michigan. He operates a full service brokerage firm, with comprehensive asset and property management services, under the name the Thomas A Duke Company. www.thomasduke.com

HIGHLIGHTS

• 15-unit apartment building;
• Close to downtown Ann Arbor;
• On-site parking;

We brought several different offers to the seller from an experienced operator in Ann Arbor. The market may still be down, but buildings are still being sold and leased.

 Each property has specific needs that must be addressed in order to create a successful closing. We pride ourselves on our ability to market each property as required. With careful planning we design a marketing program that will lead to a successful deal.

 The reason for our success is very simple. We have developed & successfully maintained an industry exclusive database of over 30,000 active buyers & sellers. We are in need of more properties to satisfy the appetites of other buyers in the market.

For more information about this transaction or to discuss your property, please contact

James Porth, CCIM  (jporth@thomasduke.com)

Their expansion plans posed several challenges. They would need to move out of two existing buildings, complete nearly $4 million in improvements and secure financing that would leave adequate working capital for expansion into other regions of the country.

The most significant obstacle encountered was with financing and the extremely high equity requirements in today’s commercial lending markets that often approach 50%.  As project completion cost grew to nearly $9 million the purchaser became concerned with its available working capital for expansion into other markets and considered dropping the project. Chuck Hawes, President and C.E.O of M.I.A.T., remarked, “this deal was dead and buried, but our team kept finding solutions to our problems.”

As CCIM’s we are trained to identify obstacles and implement solutions that the market offers. With the expert assistance of our Asset Manager and SBA expert, Darcie Moss, CCIM, we were able to secure Conventional and SBA financing for 90% of the total project costs.  $3,588,000.00 of the Purchasers equity came from securing a 504 Energy Conservation Bond.  This is nearly twice the amount that the SBA typically provides for this type of project.

Under the provisions of the bond you must demonstrate a minimum 10% energy savings by producing an Energy Conservation Report.  The report contrasted the two current M.I.A.T.  facilities energy consumption to the new facility.  In this case we were able to demonstrate at 13% reduction in natural gas usage and a 22% savings in electric usage. SBA participation was directly indexed to the energy savings in excess of 10%.

M.I.A.T. has begun improvements plans to open its new facility in June of 2010.

In these difficult times you cannot under estimate the benefit of a C.C.I.M. education.

For more information, please contact info@thomasduke.com.