Friedman Real Estate’s ownership of the 500 tower of the Renaissance Center didn’t last long at all.
The same day in December 2023 that the Farmington Hills-based real estate company purchased the 500 and 600 towers on the Detroit riverfront, it turned around and sold the former to Hallandale Beach, Fla.-based Kawa Private Investments LLC.
The string of sales transactions for the two twin office buildings adjacent to the main General Motors Co. complex are documented in Wayne County, city and title records.
On Dec. 21, 2023, an entity called Michigan Acquisition Office Towers LLC purchased the 500 and 600 towers, which total 672,000 square feet and are each 21 stories. The new owner then immediately transferred them to two separate entities, Michigan Acquisition East LLC for the 600 tower and Michigan Acquisition West LLC for the 500 tower.
Friedman has previously confirmed it purchased the buildings during that transactions, although state business incorporation documents do not identify Friedman directly. City land records list the taxpayer address for Michigan Acquisition East and Michigan Acquisition Parking LLC — which owns the nearly one-acre chunk of land fronting the two buildings — as the same West 12 Mile Road address as Friedman Real Estate.
Michigan Acquisition West then sold the 500 tower, with an address of 582 E. Jefferson Ave., to KPI 500 Tower LLC. State business incorporate documents list Kawa’s Florida address and its deputy CEO, Cristina Baldim, as its authorized officer.
Kawa’s purchase price for the 500 tower is not included in public records. Crain’s estimates the cost at around $30.4 million based on real estate transfer taxes paid to the county and state.
Messages were sent to both Friedman, which has a knack for turning around distressed assets, and Kawa seeking details on the transactions.
Friedman paid $15 million combined for the two towers six months ago, plus the nearly one-acre chunk of land, but company executives also said in February that does not include some $10 million to $15 million spent keeping Blue Cross Blue Shield of Michigan as the 500 tower’s anchor tenant and moving some of its people there out of the 600 tower.
The 600 tower is now up for a rezoning request next week to allow for additional uses other than office space.
Paul Choukourian, executive managing director in the Royal Oak office of brokerage house Colliers International Inc., said quick-turn sales like the one Friedman and Kawa executed are common. The true value in the sale is the new lease, Choukourian said.
“Once the tenant has signed a lease, the value grows tremendously as the property can be flipped as a cap rate deal, meaning that the new buyer is selling the cash flow of the new lease at a percentage return,” Choukourian said, adding that they are often seen in single-tenant net-lease retail deals, as well as single-tenant office and industrial deals.
The 500 and 600 towers are separate from the main Renaissance Center complex, which is owned by an affiliate of GM. That part of the John Portman-designed mega-development includes four 39-story office towers flanking a 73-story hotel tower, the state’s tallest building, which rises 727 feet in the air.
Last month, GM and Dan Gilbert’s Bedrock LLC real estate company announced the Detroit-based automaker was leaving its longtime RenCen headquarters and moving into the top floors of office space in the Hudson’s Detroit development downtown.
Without GM as an anchor office tenant, public officials at the city, county and state levels and executives from the two companies will determine the best path forward for the complex, which was built in the 1970s and early 1980s.
