General Motors initiated a massive North American restructuring effort this past fall, but it didn’t go as deep as perhaps some executives wanted.
A Sunday report from Crain’s Detroit Business has sources on the record claiming GM was interested in selling the Metro Detroit Renaissance Center, which serves as the automaker’s global headquarters. GM reportedly initiated discussions with Dan Gilbert, the billionaire mortgage and real estate businessman who has purchased many Detroit properties. Gilbert has been keen to redevelop Detroit’s waterfront properties.
According to sources speaking to the publication, talks between GM and Gilbert didn’t progress very far. One sticking point was a costly upgrade to the properties HVAC system. The building, which was constructed in the 1970s and 1980s as Ford’s headquarters, features an outdated HVAC system that would cost more than Gilbert wanted to invest.
Although one source said a sale is still partially on the table to Gilbert, GM is reportedly not seeking out any other buyers at the moment. Neither Gilbert’s Bedrock real estate company nor GM commented on the speculation and report.
The Renaissance Center’s potential sale isn’t a surprise. GM canceled planned renovations to the sprawling skyscrapers in 2017 as it prepared for its cost-cutting measures in 2018. Exiting the building would likely save the automaker millions after it presumably consolidated elsewhere. GM has also looked to offload the Marriott hotel across the street from the Renaissance Center for a reported $45 million.
GM bought the Renaissance Center in 1996 for $70 million. Today, it covers 5.5 million square feet, houses GM, and provides space for 50 non-GM office tenants and 60 retail outlets.
Source: Crain’s Detroit Business