General Motors to leave RenCen headquarters for Hudson's Detroit
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The Renaissance Center. Photo: Samuel Robinson/Axios
General Motors plans to leave its RenCen world headquarters for Dan Gilbert's under-construction Hudson's Detroit development in 2025.
Why it matters: GM's departure to a more modern space shakes up the downtown real estate landscape and raises long-term questions about the RenCen's future.
- The move is another example of corporations overhauling their real estate as hybrid work becomes more common in the wake of COVID-19.
The big picture: The automaker will collaborate with the county, city and Bedrock, Gilbert's real estate arm, on how to redevelop the RenCen — a 5.5-million-square-foot behemoth complex of seven buildings with hotel and office space.
- Its "next chapter" could include commercial, residential or mixed-use space, GM CEO Mary Barra said at a press conference Monday.
What they're saying: "Hudson's Detroit will serve as a symbolic era of optimism and progress that I'm confident will last for decades to come," Gilbert, Bedrock's chairman, said during Monday's event. "This is a special milestone. It is proof that when Detroit comes together, we can get great things done."
- Mayor Mike Duggan said the move was Gilbert's vision, and that Gilbert ran it by him about six years ago. Duggan expressed some uncertainty, asking Gilbert if GM was "even looking for a new headquarters." But Gilbert told the mayor that he planned to pitch Barra, Duggan said.
State of play: GM takes up a tower and a half of the RenCen, per AP. It does not plan to sell the site, though Bedrock considered purchasing it in 2018, Crain's reported.
- The $1.4 billion Hudson's site was estimated to be finished by the end of 2024. It'll offer office, retail, restaurant, hotel, residential and event space in a 45-story tower and 12-story office building.
- GM will be the development's anchor tenant with a 15-year lease to occupy the top office floors of the shorter building, plus a first-floor vehicle showcasing space.
Flashback: GM bought the RenCen in 1996, per the Detroit Historical Society. It was built in 1973-81 as a civic project led by Henry Ford II.
- The campus, big enough for its own ZIP code, is seen by some as an island unto itself, difficult to navigate and separated from downtown by Jefferson Avenue.
- It struggled with some vacancy even before the pandemic, Crain's reported, but was further hampered by work-from-home and hybrid workplace models.
Context: "This is a gold-plated prospect" for Bedrock, Jim Bieri, a longtime local real estate expert and principal of Stokas Bieri Real Estate, tells Axios.
- "This will allow [Gilbert] to fill up the building and finance it, that's really important."
- Bieri added he's hopeful that the RenCen's current tenants could be consolidated, and that the new possibilities for reimagined space there could help draw more companies downtown.