Credit Acceptance’s $35 million-plus expansion takes shape with Raleigh Officentre purchase in Southfield
Fast-growing automotive lender Credit Acceptance Corp. (NASDAQ: CACC) has purchased a large property in Southfield to consolidate its office footprint and expand its payroll in the next several years in a $35 million to $40 million investment and build-out.
The company founded by Donald Foss in 1972 purchased the two-building Raleigh Officentre at Telegraph and 10 Mile roads Monday from Friedman Real Estate (formerly Friedman Integrated Real Estate Solutions LLC) for an undisclosed price, said Jared Friedman, manager of opportunity for the Farmington Hills-based ownership, management and brokerage company.
Ken Booth, Credit Acceptance’s CFO, said Tuesday that the 297,000-square-foot Raleigh property is slated to house about 800 people in the initial build-out phases that are expected to start later this year. It could house as many as 2,000 or so in the next five years, Booth said. The company’s headquarters will remain in the 154,000-square-foot Silver Triangle Building at 25505 West 12 Mile Road west of Telegraph in Southfield.
About 100 will move from that Credit Acceptance-owned property starting at the end of the year, along with approximately 300 from the Southfield-based Farbman Group-owned Oakland Commons property on Civic Center Drive in Southfield during that time frame. Approximately 400 are slated to move from the Friedman-owned Galleria Officentre in Southfield in the middle of next year, Booth said, at which point all employees will be at the Silver Triangle and Raleigh sites.
“At the end of the day, we needed more space,” Booth said, adding that the company considered large Southfield office properties that once housed Federal-Mogul Corp. and Blue Cross Blue Shield of Michigan before opting to buy the Raleigh Officentre, which Friedman purchased in October 2016.
“We feel like by owning the building, we can control what amenities we offer to our employees.”
According to CoStar Group Inc., a Washington, D.C.-based real estate information service, Friedman paid $6 million ($20.20 per square foot) for the Raleigh Officentre when it bought the property in September 2016 and it was listed for sale at $22.275 million ($75 per square foot). Friedman said the company did substantial lobby renovations to the largely vacant building before selling it to Credit Acceptance.
Those occupying Raleigh will be what Booth called “our fastest-growing teams” in human resources, information technology, loan servicing and others. A tenant in the property currently occupying about 15,000 square feet, or about 5 percent it, is slated to move out in early 2019, Booth said.
Last year, the Michigan Strategic Fund awarded Credit Acceptance a $2.3 million grant to help pay for what it said was a $33 million expansion of its corporate headquarters that was expected to add more than 500 jobs. The state said at the time that the company had considered expanding an existing suburban Las Vegas facility as well.
Credit Acceptance had $1.11 billion in revenue last year, up 53 percent from the $723.5 million it had in 2014. That growth placed it on the Crain’s Detroit Business Fast 50 list last month.
Kirk Phino, Crain's Detroit Business.