So, CB Richard Ellis has landed the job of advising administrator Grant Thornton on the sale of the former Kenmore site at No 1 Snow Hill Plaza in Birmingham.
Grant Thornton approached agents including Colliers, GBR Property and Doherty Baines, but it seems that CBRE's history with the site stood it in good stead for the instruction (CBRE acquired Grenville Smith & Duncan in January 2008. GSD has previously advised Kenmore on the Snow Hill Plaza site for a number of years - before Kenmore fell into administration last November).
Back in the halcyon, pre-recession days of 2006, Kenmore paid Mark Glatman & James Howarth's Abstract Land around £21m for the site which includes the Thistle Hotel, the outdated and largely empty 1960s-built Kennedy Tower and a small development site known locally as 'the strip' which has consent for 180,000 sq ft office block.
One market observer who prefers to remain anonymous says: "Kenmore spent a lot of money on the tower and the strip - it then brought in the hotel. It's an interesting proposition but it has its complexities."
Abstract Land still owns the neighbouring NCP car park according to a number of my sources who are speculating that Abstract may well be interested in buying back the site at a greatly reduced price of around £11-12m. I called James Howarth this week to put that to him and will let you know if I get a reponse...
However, the complex site has a long leasehold on three seperate leases from Birmingham City Council and the hotel and the office block are both interlinked and share services which creates its own set of issues.
On the plus side it is a prominent site in an upcoming part of the city centre, located close to Snow Hill Station and the Colmore Business District where a number of major schemes have been and are being built including Carlyle Group's Colmore Plaza, Ballymore's Snow Hill mixed use development and Nurton Development's 2 Colmore Square and Cannon House office blocks. Kenmore had at one time hoped to piggy back on the area's success by building a massive 538,000 sq ft scheme but the market dropped and its planned were radically revised.
One office agent says: "There's all sorts of different asset management angles there. Options include refurbishing Kennedy Tower (which may be of interest to Nurton) and the hotel and waiting until the market comes back to build the new scheme. Or, flattening the lot and building the new scheme which will house offices and a new Thistle hotel."
Over the next couple of weeks CBRE will be putting the final touches to the marketing brochure before formally launching the opportunity to the market. Watch this space...
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