University of Michigan readies ex-Pfizer space for early 2010 office moves

U-M leases exceeding 50,000 square feet U-M regents are getting an annual report today about leases exceeding 50,000 square feet in a single building. Five locations are on the 2009 list: • Domino's Farms, Ann Arbor Township: 229,550 square feet. • KMS Building, 3621 S. State in Ann Arbor: 125,815 square feet. • 2301 Commonwealth, a building owned by Bill Martin's First Martin Corp.: 63,920 square feet. • Burlington Office Center, 325 E. Eisenhower: 59,219 square feet. • Canton Health Center, 1051 N. Canton Center Road in Canton: 51,534 square feet.

The space is in 4 sections of the office building at 1600 Huron Parkway, just south of Plymouth Road.

The work - including paint and new carpet - will be done “in order to consolidate the functions of several administrative units currently in leased space,” according to materials submitted to the regents.

U-M officials said they won't discuss specifics on who will be making the move.

However, U-M officials have been notifying landlords that they can expect either pending vacancies or requests for short-term renewals on officials likely to be making to move to the Pfizer campus by the end of 2010, according to local real estate sources.

“We are talking with all of the landlords,” said Mary Masson, spokesperson for the U-M Medical School, which has oversight of the NCRC.

That process was under way early this month, according to landlords.

“We have had communication with the University of Michigan regarding one tenant,” said John Petz, spokesperson for Domino’s Farms.

Petz said that one U-M office that has space in his nearly 1 million-square-foot building in Ann Arbor Township will be leaving in early 2010. U-M leases just shy of 230,000 square feet of space in the building, which has about a 93 percent occupancy rate.

Most of those leases involve clinic space, Petz said, which the university has indicated won’t be moving to the NCRC.

Unclear is whether those offices could move to other campus facilities that are freed up by the moves, but Petz said he’s not concerned about losing more tenants soon.

“We feel that it’s not going to be a major concern for us in the short- to mid-term,” he said. “Most of our leases are fairly long-term with the university.”

The next step, Petz said, was for U-M to notify affected departments.

But Masson said U-M would not publicly discuss what departments are targeted and where they stand in the process of identifying which offices will move to the NCRC.

So far, it is just offices moving to the NCRC and not lab facilities.

The evaluation of which offices should move to the site remains in progress. And the implication of what happens to the space the office leaves behind, either on campus or off, remains undetermined.

Masson called it “a bit of a domino effect.”

“We are currently studying all of our leases,” Masson said, “and determining how NCRC is fitting into that.”

Paula Gardner is Business Director for AnnArbor.com, where she covers real estate and development. Contact her at (734) 623-2586 or by email.