Metro Detroit Real Estate Developer, Foster Financial, Purchases 211 Tower
Detroit, MI – Foster Financial Company, Inc., a Metro Detroit-based real estate firm led by 28-year-old Bradley Foster, has just acquired the 450,000 square foot, twenty-eight story 211 Tower (located at 211 West Fort, Detroit, Michigan). Partnered with family office, Tribus, of Grosse Pointe, the two groups purchased this iconic asset, which is conveniently positioned near the TCF Center. 211 Tower is in the heart of what is becoming a hub for new office, apartment, and mixed-use developments. The building was offered for sale by Jerrod Wigal of Cushman Wakefield, and successfully closed amidst a challenging commercial lending and office environment, thanks to lending options brought by District Capital, led by Kevin Kovachevich and Mike Lemon.
The building was developed in 1961 and had been owned by the same family ever since. This will mark the first time this property has traded hands. This sale is great news for 211’s tired common areas and building systems as Foster Financial plans to invest over $10M in renovations over the next two years. Some of these improvements include: upgraded elevator cabs with COVID-safe controls, a refreshed lobby with plush furniture, modern lighting fixtures, and a media wall, plus three unique dining and drink experiences made up of an intimate cocktail bar, an expansive restaurant concept with an outdoor terrace, and a grab-n-go café operated by local Detroit coffee consultants, CoffeeHaus. Adjacent to 211 is a recently activated alley, similar to The Belt, which will connect neighboring tenants and buildings to create an intimate space for gathering, retail, and entertainment.
Foster was drawn to 211 Tower due its floor-to-ceiling windows, gorgeous water views, efficient rectangular floor plates, and location near the Federal Courthouse, Bedrock’s Free Press and Book Tower developments, and various parking decks. Foster’s specialty is value-add office buildings, as they own nearly 1.5 million square feet of commercial product around the Metro Detroit area. Although 211 Tower has a significant amount of government tenants, including the US Attorney and US Bankruptcy court, Foster Financial doesn’t want the building to be stigmatized as strictly a government building.
Doug Noble, a partner at Foster Financial, commented that, “211 Tower will incorporate a great mixture of public and private tenants. While there are secure, government agencies in place that will instill an added level of safety in our building, Fortune 500 companies will also be excited to call 211 their home.” Upon entering the two-story lobby of 211 Tower, there is a separate and discreet elevator bank for those visiting secured government floors. In the center of the lobby, however, is the main elevator bank used to service the remaining floors. Due to Foster Financial’s in-house construction arm, tenants receive trendy, modern, and professional buildouts at no cost to them. Foster and Noble expect to fill the building with anyone from law firms making use of the courthouse across the street to tech and logistic companies alike.
The arrangement of acquisition debt was procured by District Capital, Detroit’s only commercial mortgage banking company. “This was a tough assignment, but we were able to deliver” said Kevin Kovachevich, the firm’s principal. “Our job is to create a competitive market of debt options across the full spectrums of providers. We cast a wide net while speaking with lenders from both coasts, even pitching sovereign wealth funds. Our goal was to deliver the best loan terms with the highest certainty of execution.” Said Kovachevich. Michael Lemon, a Managing Director at District Capital commented, “Taking the time to speak to as many lenders as we did, allowed us to educate the global lending environment about the city of Detroit and the vast opportunities that exist in this great city.
“Class A office space in the Detroit CBD remains highly sought after with a vacancy rate holding steady below 5% when only looking at large Class A/B+ buildings in the market”, says Tony Roberts, Newmark Knight Frank Valuation & Advisory Market Leader - Michigan. “It has remained an exciting time for commercial real estate in the CBD. In the last year, we have seen the completion of the Little Caesars $150.0-million, nine-story, 234,000-square-foot world headquarter; renovations to the 150,000 square foot Marquette Building, which will be home to a reported 1,000 employees of advertising firm WPP; and the sale of 511 Woodward, which garnered national interest from tenants that previously would not have considered moving into the City of Detroit. Additionally, we have seen Class A rental rates climb from the low $20’s to the upper $20’s in the last 18 months, a trend that may be slowed by the pandemic, but most active market participants agree that the fundamentals of the Detroit office market remain strong.”
Foster Financial has engaged the services of CBRE to assist with the marketing and leasing of office space at 211 West Fort; Brendan George and Jasper Hanifi will be handling the project. “We are excited to be associated with Foster Financial and such a high-profile asset as 211 West Fort,” stated George. “The building is a Detroit landmark. It is a great option for tenants looking to enjoy the benefits of a trophyclass building in a prime CBD location. The iconic nature of the building along with the coming renovations will make the 211 Tower a must-see for prospective tenants in the area.” George and Hanifi have worked with Foster on other suburban projects in the past. Hanifi added, “Brad, Doug, and Foster Financial are excellent owners and landlords. Our user clients have been very happy in other projects of Foster Financials’ in the Detroit area”.
Foster Financial and its team reiterated their devotion to any city in which they invest. They plan to light up the top of 211 Tower with Foster-blue lights in the coming weeks to signify that they are now ready to invest in the City of Detroit.
“This is our first significant building in the City of Detroit, and we are excited to be part of Detroit’s resurgence. 211 Tower is our opportunity to bring our ‘special sauce’ to the City,” said Brad Foster, Foster Financial’s Founder and Managing Partner. “What seems to set us apart is our turn-key buildouts, simple and easy lease negotiations, and a young and vibrant team of in-house property managers.” Foster Financial is known for being an innovative pioneer in the office space business, typically known as a mundane industry; a company with a history of doing things a little differently. As other real estate investors have been shying away from acquisitions, especially office product, Foster Financial has been actively acquiring properties. Foster agrees that while some companies are enacting work from home programs, there are businesses that will always require office space, and those tenants are spreading out with higher square footage requirements.
District Capital is a full-service mortgage banking company, procuring debt and equity across all lines of commercial real estate capital.