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Posted on Thu, Mar 7, 2013 : 2:59 p.m.

Demand remains strong for space inside former Borders bookstore building in downtown Ann Arbor

By Ryan J. Stanton


The last Borders bookstore sign was removed from the former flagship store on Liberty Street in downtown Ann Arbor in December.

Daniel Brenner |

Ann Arbor's Downtown Development Authority called on a local real estate broker on Wednesday to give an assessment of the health of the business climate downtown.

"It's improving strongly," said Brendan Cavender, a commercial broker with Colliers International in Ann Arbor, who is working on filling the former Borders building on Liberty Street.

One of the signs of downtown's strength, Cavender said, is the high demand for the restaurant and retail spaces under renovation inside the former bookstore space.

"I can say we have more offers than spaces that we have," he told DDA officials without identifying any of the prospective tenants. "It's a jigsaw puzzle right now. We're trying to find the best fits — some local, some national, some retail, some restaurant — to kind of see who works the best together."

Cavender has been involved in a number of real estate deals downtown, including the lease of more than 45,000 square feet of office space to California-based tech firm Barracuda Networks, which moved hundreds of employees to Maynard Street where Borders used to have offices.

At Wednesday's meeting, Cavender talked about plans to fill the 44,000-square-foot former Borders flagship store next door, as well as trends he's seeing downtown.

"We've seen a big transition kind of down to the Liberty/State area," he said. "But we're running out of space there, and there's virtually no office space left down in that area."


Brendan Cavender, a broker with Colliers International in Ann Arbor, addresses the Ann Arbor DDA's governing board on Wednesday.

Ryan J. Stanton |

Mayor John Hieftje asked how long it will be before the vacant ground-floor spaces inside the old Borders are occupied by new retailers open for business.

"Certainly by the end of the year," Cavender said. "It depends how long the buildouts for individual retailers take."

Borders vacated the two-story building in September 2011, and Oakland County developer Ron Hughes, also the developer behind the Landmark student high-rise, acquired long-term rights to redevelop the space in May 2012. The building is being subdivided into five restaurant and retail spaces on the first floor, with contemporary office space on the second floor.

Cavender already helped announce the news in January that tech company PRIME Research North America signed a long-term lease for 16,000 square feet of space on the second floor, joining Barracuda Networks in creating a new tech hub at the corner of Liberty and Maynard streets.

PRIME Research, which is relocating from Ashley Street with plans to add dozens of jobs, will occupy more than a third of the overall building space, and most of the space on the second floor.

"What is significant about that move is it kind of mimics the other moves we've seen down in that area with the tech companies that have moved," Cavender said. "Last year, we moved Barracuda down here. With the addition of Menlo, it's really become kind of a tech hub."

Menlo Innovations moved from Kerrytown to the underground Offices at Liberty Square last year, where TechArb, the University of Michigan's student startup accelerator, also is located.

"In the next two to three years, down in the block — kind of Liberty, Maynard and Washington area — we will have probably 1,400 young tech employees, which is significant," Cavender said.

Hieftje said he's glad to hear demand is strong. He also was glad to hear Cavender note the expansion of parking offered by the city's new underground garage was a key ingredient in getting tech companies like Barracuda and PRIME to make the move into the downtown core.

Hieftje said it was the city's hope that a downtown "tech campus" eventually would form when the city helped lure Google to Ann Arbor in 2006, and now it seems that's panning out.

Cavender said one of the positives about the growing concentration of tech companies is they're high-density tenants.

"These are not four employees per 1,000 square feet," he said. "They're six or seven employees per 1,000 square feet, which means there's more people."

They're also paid well, which means they go out to eat and shop downtown, supporting local businesses, he said. He predicted PRIME Research, which has 80 employees, will grow to at least 150 people, while Barracuda could eventually grow to 450 or more.

"That helps the whole area," he said.


The interior of the former Borders flagship store on Liberty Street as it looked undergoing renovations in mid-February.

Ryan J. Stanton |

DDA Chairwoman Leah Gunn asked where downtown might be limited when it comes to office space — whether there are companies looking for more space than is available.

Cavender said there probably is about 160,000 square feet of vacant office space in the downtown area with a few large floor plates. In terms of percentages, he estimated about a 9 to 10 percent vacancy rate.

He said it will take a while to fill that, and lease rates need to get up to an annual $29 or $30 per square foot to make new office construction work.

"In the last three years, we've seen the rates start to drift upward — now about $24, $25, $26 a foot down in the campus area," he said. "They were down in $18, $19, $20 a foot."

Commenting on the interest in a large grocery store downtown, Cavender said his firm has talked to one larger company that does grocery stores in small downtown communities.

"Their rule of thumb, just to kind of kind of give you an overview, is 10,000 full-time residents downtown in a small downtown area," he said. "We're halfway there."

He added, "They won't even look at a community without that."

Cavender said at one point they looked at the property at 413 E. Huron where a 14-story high-rise is now proposed, and it didn't work out to have a large grocery store there.

He predicted downtown Ann Arbor will continue to see vacant spaces fill up. He said retail downtown is as healthy as ever, and restaurants are doing better than ever before.

"The restaurants downtown, we're seeing do between $3.5 and $6 million a year in sales," he said. "Even at the high rents that are down here, it works and they're doing well, and they're making money. Additionally, they're signing longer-term leases."

Instead of three- to five-year leases, Cavender said, downtown Ann Arbor restaurants are now doing 10- to 15-year leases.

"So I think we'll see the turnover diminish," he said. "I think we'll see stronger tenants down here, and that's being fueled by the office density. They all kind of work in unison."

Ryan J. Stanton covers government and politics for Reach him at or 734-623-2529. You also can follow him on Twitter or subscribe to's email newsletters.



Thu, Mar 14, 2013 : 6:52 p.m.

Originally, I thought a Trader Joe like the one in the Village of Grosse Pointe (also in an old Jacobson's and utilizes a parking structure/validated parking!) could be great, providing affordable groceries and acting as an anchor store. I live downtown, and I would have shopped there when I was a student as well. I used to take the bus to the Meijer on Carpenter, which was a huge project. Now that the space will be split up, a substantial grocery store obviously won't work.


Fri, Mar 8, 2013 : 2:17 p.m.

A bookstore would be nice.


Thu, Mar 14, 2013 : 6:48 p.m.

I'll miss browsing books and enjoying the cafe at Borders, loved the vibe and location across from the Michigan Theater, but I'm excited that Literati bookstore is opening soon!


Fri, Mar 8, 2013 : 2:05 p.m.

"Cavender said at one point they looked at the property at 413 E. Huron where a 14-story high-rise is now proposed, and it didn't work out to have a large grocery store there." He talked to one grocery chain and they need 10,000 residents before looking at it. "We're halfway there." he said. Cavender and who else is half-way there? It is called sustainability not endless growth. And who made Cavender the DDA expert for downtown planning? What ever happened to their other consultant? Swap the Y lot with 413 E. Huron, dump the DDA after refinancing their part of the note and ask the other healthy food stores if they could afford E. Huron for $250k (current parking receipt income). Dexter has population under 5,000 and supports two grocery chains - Buschs and Country Market. People downtown actually cooking for themselves might severely impact the DDA masterplan of more and more restaurants, chain shops, and pizza joints. What else could there be? Time to go Prime Research seems to be an exciting PR research firm. The name is registered as Prime Research LP or Prime Research Holding Corp Georgia. PR and media folk tend to hyperbolize. By the way, Is the joint PRIME-IPR internship open to local student applicants? Maybe a piece on that and other lucrative U.S. German Asian opportunities this international company offers would be of interest to young professionals.

Elaine F. Owsley

Fri, Mar 8, 2013 : 12:36 p.m.

Happened to look in the main floor Barracuda office windows the other day. Looks like a dark cave with about half a dozen people at desks. Dreary.


Fri, Mar 8, 2013 : 3:17 a.m.

Commenting on the interest in a large grocery store downtown, Cavender said his firm has talked to one larger company that does grocery stores in small downtown communities. "Their rule of thumb, just to kind of kind of give you an overview, is 10,000 full-time residents downtown in a small downtown area," he said. "We're halfway there." ********* AA is a long way from 10,000 full-time residents downtown. And if the present trends continue, the student warehouses, which do not constitute "full-time residents," will only push out more and more permanent full-time residents in the surrounding neighborhoods. AA will never be more than Disneyland for rich students, with student warehouses surrounded by cute boutiques and too many restaurants, not a vibrant downtown with a variety of services for city living for anyone over 22. Housing is not being built in the downtown area for multi-generational populations, only for the 18-22 crowd. They don't do a lot of cooking, they eat in the restaurants. I doubt there will ever be a full service grocery store in downtown AA. Not enough housing in the downtown or center city area (other than a few overpriced condos) for the 22+ crowd.

Sean Thomas

Fri, Mar 8, 2013 : 2:24 p.m.

yeah, this is a problem I'm experiencing right now actually. I just graduated and I love this city, but there's not really anywhere for me to live downtown that isn't going to be surrounded by rich 18 year olds or way out of reach of practical shops. Which wouldn't be a problem, if owning a car downtown wasn't so impractical. It just doesn't make sense to live downtown unless you're a student with tons of disposable income these days.

Milton Shift

Fri, Mar 8, 2013 : 12:41 a.m.

Too bad. Downtown Ann Arbor is increasingly becoming a playground, lacking in anything practical. No hardware stores, no grocery stores. I've lived in cities with total metropolitan area populations of under 30,000 (less than 25% the size of Ann Arbor, that is) and they had downtown grocery and hardware stores.

Voice of Reason

Fri, Mar 8, 2013 : 2:42 p.m.

I couldn't agree more Milton Shift! We could use a PRACTICAL grocery store. The one grocery store we have downtown is pretentious and super expensive. The only "practical" grocery store that we had, was ran out by a chain restaurant sub stop, that's conveniently placed next to 4 other pizza/sub shops!

Ryan J. Stanton

Thu, Mar 7, 2013 : 8:57 p.m.

What about a downtown Apple store? If this is going to be a tech hub, makes sense to have a place they can all go and buy their gadgets right there, right? Obviously very close to campus, too.

Voice of Reason

Fri, Mar 8, 2013 : 2:23 p.m.

Are people really that lazy, that they need two of the same stores within a 5 mile radius?

David Paris

Fri, Mar 8, 2013 : 12:24 a.m.

Ryan, I'd have to say that if techies want Apple stuff, then they know where to get it. Maybe something more like a Workentile Exchange, then knock a hole in the back wall into Espresso Royale? How about a coffee shop that spins Ghostly International 24/7? It's right across the street from The Michigan, maybe they could build out an off-site (from the theater) lecture/conference hall? What ever happens, I'm just happy that Rite Aid didn't jump on it!


Thu, Mar 7, 2013 : 11:18 p.m.

Apple's stores are company owned, not franchised. I have no idea what their contract with Briarwood says, though. Briarwood is about 3 miles from the old Borders building.


Thu, Mar 7, 2013 : 10:02 p.m.

Lizzy...I'm not sure if Apple stores are franchise's or not but if they are that is quite common. Ryan....Again, if Apple store's are franchise's that wouldn't work

Ryan J. Stanton

Thu, Mar 7, 2013 : 9:31 p.m.

Couldn't they move, though?

Lizzy Alfs

Thu, Mar 7, 2013 : 9:26 p.m.

@StraightTalk: Is that true?


Thu, Mar 7, 2013 : 9:15 p.m.

Apple cannot come downtown because their agreement with Briarwood is that they can't open another store within a 2-mile radius.


Thu, Mar 7, 2013 : 9:14 p.m.

The apple store at briarwood is probably too close to justify another apple store. But I could see Microsoft trying to open one of their new stores there.

An Arborigine

Thu, Mar 7, 2013 : 8:47 p.m.

Personally, I'd like to see something other than dining experiences and cute shops. This town has enough exclusive and unique and trendy dining experiences to choose from and not enough parking to accommodate the vehicles needed to transport all these diners to their chosen experience.


Thu, Mar 7, 2013 : 8:58 p.m.

And your suggestion is?

Ryan J. Stanton

Thu, Mar 7, 2013 : 8:33 p.m.

It sounds like there will be five restaurant and retail spaces on the first floor. What five things would everyone like to see? In my wildest dreams, one of them would be a vegan Mexican restaurant similar to San Francisco's Gracias Madre, but I know I'm dreaming. Still hoping to be pleasantly surprised by what gets announced!


Thu, Mar 14, 2013 : 6:37 p.m.

Ryan, I like your dream. Gracias Madre's online menu looks sooo good; I'll be going there if/when in San Francisco again. Have you ever asked for vegan items at La Fiesta Mexicana in Ypsi? I would say a small bookstore, but Literati will be filling that need. :) I'm always hoping for more vegan or vegan-friendly establishments. A bakery with yeast-raised vegan donuts (like Mighty-O in Seattle and Dun-Well in Brooklyn) would be a treat. ;) I'm hoping The Lunch Room ventures into donut territory eventually.


Thu, Mar 7, 2013 : 8:25 p.m.

Crate & Barrel please. Assuming we can fix our roads first.


Fri, Mar 8, 2013 : 2:16 p.m.

Geez Louise, change the record!!!!!!


Thu, Mar 7, 2013 : 8:10 p.m.

Mr Mayor, don't fool yourself, Google AdWords is not hightech. There are no Engineering activities in the Ann Arbor Google office. The closest engineering office I believe is Chicago.