Major Downtown Properties Available, If The Price Is Right

Several high-profile downtown buildings are now for sale or lease, from the former Union Street Station to the old Front Row Center building, the Wurzburg building, the Blue Tractor property and the former Glitz & Spurs space. Brokers and downtown leaders say the activity reflects continued demand, but also a market where costs are pushing some businesses out and raising the bar for those looking to move in.

“Downtown is fairly expensive,” says David Frost of Three West, who is representing several downtown properties. Many spaces, he says, are leasing for $22 to $25 per square foot triple net, with some reaching $30. With triple net leases, tenants often absorb higher property taxes — a growing issue as buildings sell and taxable values are uncapped.

“It can be challenging,” Frost says.

The former Union Street Station building at 117 S. Union Street is available for lease; owner Bob Guyot is not interested in selling. He has made significant interior improvements, including upgrades to lighting and sound. The stage remains in place, but Guyot is not limiting the search to another bar or nightclub operator.

“I’m excited about the possibilities,” Guyot says.

Frost says the economics of downtown increasingly favor higher-revenue concepts.

“Bob Guyot said, ‘Find me a Ralph Lauren store,’” says a laughing Frost, who is representing the spot. The point, he says, is that rising values, taxes and lease rates are making downtown harder for lower-margin businesses — and more likely to attract national or high-volume operators.

The Front Row Center building at 121 E. Front Street is listed at a newly reduced price of $3.875 million. Realtor Mark Hagan of Coldwell Banker Schmidt says he hopes the price cut will generate more interest. The property sits on a 62-by-149-foot lot and could be renovated or redeveloped.

The building was originally home to the Michigan Theater, and Hagan says the structural elements remain strong. “The footings are solid,” he says. “I’ve had two groups looking at it, talking with engineers and designers."

The former Blue Tractor property at 423 S. Union Street is listed for sale at $2.4 million but is also available for lease through Dan Stiebel of Coldwell Banker Schmidt.

Owner Jon Carlson says the building offers a rare combination of size, history and location. Blue Tractor operated there for 19 years, and the building previously housed Dill’s Old Towne Saloon for decades.

“It is a great space,” Carlson says. “It just needs new blood.”

Carlson says reopening the restaurant himself remains possible if the building does not sell or lease, though it is not his preference. “We don’t have any plans at this point,” he says. “If it doesn’t feel right, we would have to find investors.”

Carlson also owns the Beadle building at 161 E. Front Street, the former Mackinaw Brewing Company space. The Red Piano, a piano bar and nightclub, is renovating the main floor and plans to open in early summer. The lower level remains for lease. 

The Wurzburg building at 118 E. Front Street — formerly home to Brilliant Books and, before that, Stewart-Zacks — is listed for sale at $2.95 million.

Frost is representing the three-story building, which he says has high ceilings on each floor and multiple redevelopment possibilities. “It’s a landmark kind of building,” Frost says.

But the price reflects the broader downtown market. “The high numbers mean you have to have a fairly successful business,” he says.

Stiebel is representing the former Glitz & Spurs property at 207 E. Front Street, listed for sale at $845,000.

He says downtown remains attractive, but agrees increasing costs are changing the business mix.

“The only reason not to invest in Traverse City is the taxes,” Stiebel says. “Property values have gone up so much some can’t afford to be downtown. As the buildings turn over, there’s a different business mix.”

Downtown Development Authority Executive Director Harry Burkholder points to multiple city-owned parcels inlcuding 130 W. State Street, currently used as a parking lot, as another major redevelopment opportunity. Nearby properties at 120 and 122 W. State have been demolished, and 153 Pine Street is also available, creating the potential for a broader block-level project that the city seeks to have developed into mixed use with public parking, workforce housing and potentially a Traverse City Police Department substation.

“You don’t get a lot of opportunities to think of an entire block,” Burkholder says.

Burkholder says the city’s pilot program converting State Street to two-way traffic has already improved the pedestrian environment and could help spur more development. State Street had been one-way for 55 years, from 1967 until November 2022.

“Muscle memory is long,” Burkholder says.

He says the change has slowed traffic, improved safety and made the street more welcoming for pedestrians. “It moves traffic more efficiently,” he says. “It is a better pedestrian experience and environment.”

Burkholder says downtown’s strength is increasingly tied to the full experience: shopping, dining, walkability, access to the bay and a concentration of activity.

“What we see in national trends is when people visit downtowns, it’s a holistic experience,” he says.

Frost says Traverse City’s downtown has come a long way from the era when malls pulled shoppers away from downtowns. Online shopping later weakened many malls, while walkable downtowns became more desirable.

Now, he says, Traverse City is benefiting — but also feeling the pressure that comes with it.

“Traverse City has got a bulls-eye on it,” says Frost. He says it is gaining recognition nationally and even internationally, bringing more shoppers and more visitors, providing more business while at the same time driving both housing and commercial listing prices higher.