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Posted on Thu, Dec 9, 2010 : 6:01 a.m.

Ann Arbor's Recellular signs sublease deal to move office into Borders Inc. headquarters

By Paula Gardner


About 30,000 square feet of the Borders headquarters remains listed for sublease.

From Costar Inc.

An Ann Arbor-based corporate headquarters will be on the move in early 2011 after signing a deal to sublease office space in the Borders Group Inc. headquarters on Phoenix Drive.

Recellular Inc. will move from subleased space in Traverwood to a half-floor in part of the Borders building, located southeast of I-94 and South State Street.

The move into the 13,000-square-foot space, said vice president Mike Newman, “is just another representation of our commitment to growing in Michigan.”

The company operates a production facility that employs 200 in Dexter, after moving its headquarters operation to north Ann Arbor 2 years ago. It employs about 50 in the headquarters, with another few dozen employees based at global sites.

The locations, said Newman, keep each building’s respective staff focused on a their specific functions supporting the corporate goal: Refurbishing and selling used cell phones for both domestic and international customers.

Business, Newman said, is strong.

“(We’re) on track to sell about 2.5 million phones in this calendar year,” Newman said.

Revenue growth will be 25 percent in 2010. That number is expected to double in 2011, Newman added.

“It’s a pretty exciting curve,” he said for the 19-year-old company.

The company also received a venture capital investment this fall from InvestMichigan! Growth Capital Fund. The amount was not disclosed.

The company’s business is about 75 percent domestic, 25 percent overseas.

The sales in the U.S. represents growth as the company targets the direct-to-consumer market, after what had been almost exclusively business-to-business in this country.

One driver of that is the company’s rapid expansion of its e-commerce platform, Newman said.

“We’re now selling 10s of thousands of phones directly to consumers,” he said. Among the outlets: online auction company eBay.

“I think people are surprised at how deep the market is for used phones,” he added, saying that millions of customers are looking for phone service outside of the mainstream contract retailers.

Recellular reconditions the phones at its Dexter production facility, turning out what Newman calls a high-quality, fully warranted product.

Customers include people with poor credit or lack of cash to buy into a long-term plan, or people who need a new phone while fulfilling a contract but don’t want to pay retail price.

“This is a really attractive and smart economic move in those particular conditions,” Newman said.

The challenge of maintaining a supply of inventory has grown along with sales, Newman said.

Recellular launched a second website,, to fill its pipeline of phones to be reconditioned.

As the business forecasts indicate, the formula is working for Recellular.

“We’re buying in pretty good qualities right now and we’re able to turn around and sell them to others,” he said. “It’s been an exciting year.”

As Recellular prepares for its headquarters move, it will vacate offices in First Martin Corp.’s Traverwood. The company had been subleasing from MSC Software, which now occupies one floor of the 66,000-square-foot building.

The other two floors will be available for lease in 2011, according to First Martin.

Recellular’s move into the Borders building is good for both longtime local companies, said Neal Warling, vice president of Jones Lang Lasalle and listing agent for the Borders sublease space.

“They were looking for a turnkey deal with furniture and turnkey services,” Warling said. The deal involves an all-inclusive lease rate, so Recellular knows its outlay instead of keeping variables open.

Borders, in turn, has had the space on the market for about a year. As the bookseller downsizes, generating income from its space under long-term lease makes sense for that company’s bottom line, Warling said.

About 30,000 square feet of office space in the building is still available, Warling said, at a rate of $15 per square foot.

Meanwhile, the entire Borders headquarters property remains listed for sale by owner Agree Realty, the Farmington Hills-based company that has a long-term lease with Borders Inc. to occupy the building.

Agree listed the property this fall, and wouldn’t comment on the reason. It appears to be an attempt to diversify its holdings as Borders - which occupies 27 percent of Agree’s national portfolio _ struggles to rebound.

Paula Gardner is Business News Director of Contact her at 734-623-2586 or by email. Sign up for the weekly Business Review newsletter, distributed every Thursday, here.