U mulls buying office building

Non-University tenants would likely have to move when their leases expire.

Molly Moker

The University might pay $7 million for a building near campus to house some of its offices, officials said.

The institution has looked at buying the University Office Plaza at 2221 University Ave. S.E. for a few years, University realtor Sue Weinberg said. Currently, the University leases 50 percent of the building.

The University wants to make the purchase to have more control over the amount of University tenants the building houses and to save on leasing expenses, Weinberg said.

A Board of Regents committee is expected to vote on whether to approve the transaction at its meeting today.

The Academic Health Center uses most of the University space in the building.

Non-University related tenants include a dental clinic and the Office of the State Public Defender.

Richard Pfutzenreuter, the University’s chief financial officer, said the University will look to house University tenants in the building if it is purchased.

Current external tenants who hold leases at the property will most likely have to leave after their lease expires, Pfutzenreuter said.

Deputy state public defender Larry Hammerling, who works in the building, said he is weary of the University owning it.

“Right now, they can’t do much to affect us, unless they buy out our lease,” Hammerling said. “But, depending on how many new University tenants move in, I think we’ll be able to tell if we’ll have to move.”

Hammerling said his office used to be located in the University’s Law School. He called his experience of having the University as a landlord “rocky.”

“I assume we’ll have some problems with them along the road,” he said. “We were pretty low-priority tenants, and as their need for space increased, they just squeezed us out.”

Hammerling said the University’s “endless desire to obtain space,” will most likely drive him out of his office.

Weinberg said current University tenants will be able to continue leasing from the building if they choose, and keeping external tenants will be an option.

The office plaza is currently owned by Great Lakes REIT, a real-estate investment trust that owns and manages 44 office properties in the Midwest.

A Great Lakes REIT official said the company is under contract to sell the University Office Plaza to the University if regents approve the transaction.

Weinberg said the property’s price is less than the University expected. She said two property appraisals completed in 2001 valued the property between $9 million and $10.5 million.

She said she expects the regents to approve the transaction because there was no spoken opposition to the matter at last month’s meeting.