Work hard. Work smart. For the San Diego-based real estate investment firm Capstone
Advisors, pooling the resources and expertise of such companies as Qwest Communications,
SunTel Services, and WorkPlace Integrators/Steelcase is a sure bet for success
when the goal is to offer tenants and area businesses the finest in high-tech
In May 1998, Capstone Advisors looked at a number of buildings in the central
business district of downtown Detroit. There were things happening in
the marketplace of the central business district that were changing the dynamics
of the real estate market, says John Keba, senior vice president of asset
management for Capstone Advisors and owner of the Penobscot building. Among
the rejuvenation projects in the downtown were:
The relocation of General Motors corporate headquarters to the
The relocation of Compuwares world headquarters.
Construction of the MGM Grand and Circus Circus professional gaming and
Construction of the new Tiger stadium ballpark.
A proposed football stadium, located next to the new baseball stadium
scheduled to begin construction early this summer.
It was noted, during Capstones Advisors due diligence, that a number
of high-tech telecommunications companies were already tenants of the Penobscot
building. Many of them were web-host companies with few employees. We
found these companies hidden in the basement and on multiple lower floors of
the building, says Keba. They were there because of the fiber-optics
and infrastructure of the building. The Penobscot building has access to three
separate sonet rings of fiber. Many cities only have one sonet ring. We just
happen to have three in Detroit, he explains. Additionally, the Penobscot
building offers a variety of other technologically favorable characteristics
Floor load capacity of up to 1,250 pounds per foot.
Generous ceiling heights.
Ample column spacing.
Accessible lower floors.
Three separate power eds from the local utility.
If one grid of power goes down, there are two other alternate grids [able
to operate as redundant power sources]. In the history of the building there
has never been an outage. We are totally self-supporting, says Keba. In
line with that, we have back-up generator locations and fuel storage areas off-site.
Tenants of the Penobscot building also take comfort in an advanced security
system complete with security monitoring cameras and card access.
According to Keba, the focus then shifted from technology to alerting the marketplace
to what was happening in downtown Detroit. Weve had CEOs of major
telecommunications companies telling us that what we have here is something
special. There are only a handful of buildings in the entire country that can
do what we can do, house what we have, and are as technologically advanced.
What we wanted to do was showcase the technology, to help break the paradigm
and improve Detroits image, he explains.
With the help of Qwest, a broadband Internet communications company, Smart
Detroit was able to position itself as a showcasing center for mainstream business.
The building owners came to us with the vision of creating a different
kind of facility downtown, says Jill Brady, sales director for Southfield,
MI-based Qwest. They wanted to provide a different level of technology
to the tenants and to the building. They wanted to put together a place where
there was a facility for education and where people could come and learn about
technology and also buy technology inside the building.
Were the fourth largest long-distance provider in the United States.
Essentially, what were moving toward is offering a complete one-stop shop
of communications services. Through our acquisition of US West Communications,
were going to offer local telephone service, in addition to long-distance
telephone service, any type of Internet web-hosting, and other types of data
access, says Matt Barkett, corporate spokesperson for Qwest.
Kebas vision for Smart Detroit is that it will be a source for business
leaders to become educated on how technology is changing, how they can adopt
technology into their business plan, and how the use of integrated telecommunications
can improve business. The showcasing center is an education and training
facility. Its not a sales center. Were not selling anything other
than the fact that [businesses] should be downtown in the Penobscot building,
Within the Smart Detroit concept is a second component, a global conferencing
center. We say global because its hooked into the World Wide Web
and the Internet, adds Keba. With all the alliance partners weve
brought together, we have built an assortment of high-end global boardrooms,
conference rooms, and videoconferencing rooms, as well as seminar and training
rooms for corporate training and education. Each room, whether it seats two
people or 75 people, all have a common thread: a plug in the wall that connects
to the rest of the world via the Internet. Our bandwidth access allows us to
perform complete studio broadcasting all the way down to a single person sitting
at a desktop surfing the Web.
The Smart Detroit conferencing center is a tenant amenity training and seminar
center. Instead of hosting events at area hotels, tenants log in on the Web
and conduct videoconference meetings with other sales offices utilizing the
equipment, projectors, and laptops all without ever leaving the building.
Qwest is the broadband Internet communications provider that brings the information
capabilities into the Penobscot building. It is from that point that Rochester
Hills, MI-based SunTel connects the internal world to the external world. SunTel
is a systems integrator, says Gary Jackson, president of SunTel. We
put together communications systems for businesses that allow them to access
various types of information: telephone systems, voice systems, local area networks
(LAN), wide area net-
works (WAN), audio, video, and dataconferencing.
We handle all of the hardware products and services inside of an office,
a building, or a business. Once [tenants] want to connect to the outside world,
they need to locate a provider such as Qwest. Our product connects to the outside
carrier, he notes. We were involved directly with the building owner,
which gives us a much more strategic relationship to move people in and out
of that building smoother, easier, and with much better access to everything
we might need when installing a communications system.
For businesses planning a relocation, communications is an important consideration.
Tenants take a close look at what speed and bandwidth are available at the locations
theyre moving to. Having access to the Internet and other types
of high-speed communications is so important that offering tenants real plug-and-play
opportunities is essential to attracting and retaining good tenants, explains
The SmartOffices portion of Smart Detroit is a generic executive office suite
with all the amenities such as a receptionist, mail service, copy service, overnight
delivery, and postage handling. The owner was looking for leading-edge
products to incorporate into the vision of how flexible, functional office space
should look and perform, explains Jeffrey Block, senior consultant of
Advanced Solutions at Grand Rapids, MI-based Steelcase. The building owner
chose the Pathways line of office furniture, wall units, and access flooring,
noting that the system would adequately support the type of infrastructure proposed
by Smart Detroit.
Every desk in a SmartOffice is outfitted with T-1 lines for top levels of service.
A real selling point? T-1 lines are included in the cost of rent and are less
than the normal cost of the T-1 line on the open market. For installation, T-1
lines may be $1,200; here, rent for the space might be $600. Capstones
goal was two-fold: first, to create a space that would demonstrate the flexibility
and accessibility of plug-and-play adaptation; second, [to develop] a process
that would create value for the tenant through product durability and ease of
reconfiguration. The Pathways system gives the tenant control of the space without
the expense of hiring someone to reconfigure a space as businesses grow and
expand, says Block.
Within the Smart Detroit concept, the team felt there needed to be some changes
made in the way business was done. We have put together Smart Detroit,
not only as a repositioning tool for the real estate, but also as a fundamental
concept of how we do business at Capstone. We believe that it is our role to
make our tenants successful, says Keba. Its also our role
to play a part in the daily life of our tenants. Whether thats providing
furnishings, telecommunications access through Qwest to greatly reduce pricing,
or how ever were setting that up, thats our concept as a landlord.