• Oct 7th 2008 at 1:59PM
  • 15
One thing's for sure, General Motors is not very good at playing the real estate market. Last May the world's biggest automaker finally bought its world headquarters in downtown Detroit called the Renaissance Center for the sum of $626 million. It had initially bought into the complex of seven buildings back in 1996 for $75 million, but had continued leasing office space there until the purchase earlier this year. Here we are not five months later after the purchase and GM is reportedly considering selling the RenCen to raise $500 million fast.
Rather than selling the RenCen at a loss, the preferred plan reportedly would be to mortgage the property to one or both of Detroit's pension funds to the tune of $500 million, but seeing as they're both already heavily invested in downtown Detroit property, that's not likely to happen.

GM's ultimate goal is to quickly raise $5 billion by selling any non-essential assets, including things like the RenCen, HUMMER and its medium-duty truck business. If the RenCen were sold, GM would forego working out of a cardboard box by going back to leasing the office space it's currently using.

[Source: The Detroit News, Photo by Bruce Bennett/Getty]


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  • 15 Comments
      • 7 Years Ago
      I wonder if they will offer an adjustable rate mortgage to the buyer ?
      • 7 Years Ago
      Good luck renting or selling anthing in the "American Pompei".Wonder what will become of the ren center.Wonder what will become of all of those huge Quonset huts with 30 foot tall signs that say Hummer,GM made the poor dealers Pay for.Nowdays if you paid sticker for a H-2 they might throw in the whole brand.GM should have a 30ft. sign in front that says STUPID.
      • 7 Years Ago
      It must be tough to be an automaker AND real estate seller at the same time...good luck selling RenCen...don't look for either of those to profit any time soon.
      • 7 Years Ago
      Not 100% accurate. We are looking to "monetize" the real estate that includes the Ren Cen -- in effect borrowing against it so we can use the money for future product programs, etc. This is what many companies do -- if your business is not real estate investing, you don't tie up your money in real estate. We might do a sale/lease-back deal if the terms were right, and those terms would include GM retaining control of the building. In fact, much of the value of the building to an investor is the fact that GM has a long-term commitment to keeping its global HQ at the Ren Cen. And while the money would come in handy right now, we would be pursuing the same strategy in good times -- it is just SOP for modern corporations.
        • 7 Years Ago
        @ From My Cube

        Why do you think GM should be obligated to make cutting edge tech like the Volt "affordable" to you, simply because you say so? 40K is not a lot of money for a lot of people, subsidy or not. Buying a new car right out of college is sometimes a big mistake for people anyway. You can always wait and try to buy one used, right?
        • 7 Years Ago
        Not 100% accurate. In plain speak:

        "We are looking to "cash out" anything that isn't bolted down so we can use the money for future product programs, CEO bonuses, etc. This is what many companies that have pissed away more capital than God knows do -- if your business is not real estate investing, you don't tie up your money in real estate (although that wasn't our message until now when we really really really need the money and no one wants to loan us any). If there is a sucker out there, we hope and pray that we can still retain control of the building and retain our mediocrity. Much of the value of the building to an investor is the fact that GM has a long-term commitment to keeping its global HQ at the Ren Cen. (of course, assuming that we don't go out of business). And while the money would come in handy right now, we would be pursuing the same strategy in good times -- it is just SOP for modern corporations who are in serious trouble, have pissed away all of our equity, and have failed to make the tough decisions about too many brands, too many models, too many dealers that we all know needs to happen, but are afraid to make.

        • 7 Years Ago
        Tourian: Because Honda (Insight) & Toyota (Prius) make their cutting technology available for 20-25K. Is GM expecting consumers to pay 15-20K premium for their new & unproven technology?

        Chevy's are suppose to be "entry level" vehicles. 40K is not entry level. JMO.
        • 7 Years Ago
        @Arod

        You seriously think he is going to say something bad about his boss on the blog?
      • 7 Years Ago
      Especially in Michigan....
      • 7 Years Ago
      wtf gm is reading our comments?
        • 7 Years Ago
        Hate to break it to you, CbA, but AutoBlog is a public site.
        • 7 Years Ago
        Must be a slow day at GM, this is the same Tom who went after Thomas Friedman a while back. Sensitive are we?
      • 7 Years Ago
      We just happen to think that bloggers, like dead-tree journalists, should get things right, and we will comment when we think they missed something.

      If thousands of people are reading Autoblog, why should we treat it any differently than we treat the Free Press or AutoWeek.
        • 7 Years Ago
        I have a friend named Bob that works at GM - do you know him?
        • 7 Years Ago
        Christ! No wonder GM is in the sh*tter... they pay Marketing guys to surf the net & defend GM's honor?

        Great $$$ investment. When does the 25 billion, government check get to the Ren Cen???
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