Borders Ann Arbor HQ Books $10.5 Million Refinance

borders-hqNew York-based real estate investment banking firm Chesterfield Faring has announced a refinance of the Wickfield Center of Ann Arbor, MI, former corporate headquarters of the bankrupt and liquidated national bookseller chain Borders.

The refinance is in support of a bustling market in the former HQ’s space. The two-building complex, sporting a total of 330,000 square feet of rentable space, was sold to Hughes Properties earlier this year by Colliers International, who has been retained to list the available rental space.  The South Ann Arbor property has major tenants in Gold Star Mortgage, who is renting 68,000 sq. ft.  Colliers itself also rented 16,000 sq. ft to Prime Research, a strategic communication research firm.

The Prime Research lease appears to be part an parcel of a technology trend that some say felled Borders, a once mighty-bookseller.  In the Ann Arbor News, Brendan Cavender of Colliers International Ann Arbor who listed the building and represented PRIME in the deal said the new office’s footprint will cover about 85 percent of the second floor and Cavender said that another tenant is in final negotiations for the remaining office space.

“This is really a great development for the whole area,” Cavender said.

“The technology companies here are fueling growth in the retail and restaurant spaces as the new young employees move into the space. With Barracuda, Menlo, Google, and now Prime Research, you have a real density here of tech companies.”

Another Technology Vs. Traditional Retail Story?

The store closings of Borders in 2011 caused pain among fans of the bookstore business, a low-margin gentleman’s game that depends utterly on customer experience and a near-irrational expressions of customer loyalty.  The emotional investment of customers into Borders in its earliest days in Ann Arbor was the store-floor half of a love story that went all the way to the top management.  How did technology figure in its arc?

Technological innovation at Borders  - albeit of a decidedly pre-internet type – was strong.  Its inventory control system, developed in the 1970s and based on 3″ square cards was innovative and powerful enough to produce a spin-off business (Book Inventory Systems) that sold to independent bookstores around the world until 1994.

But it was a fateful decision about technology and internet retail in specific, some say, that sealed the fate of the global chain.

Most brick-and-mortar retailers had to make a decision in the very earliest part of the 21st century: was internet a distraction or was it a synergy?  Borders, like so many retail businesses faced a struggle with their own online presence, and in 2001 made the decision to outsource their online retail to Amazon.com.  That surrender to its most dangerous competitor was a disaster for Borders and a huge coup for Amazon. The highly personalized customer experience Amazon could deliver appealed to Borders customers far more than Borders expected.  The program would end in 2007 with Borders scrambling to reclaim their online heritage, but by then, industry observers say, it was too late.

 

Enhanced by Zemanta

21. October 2013 by Wayne Grohl
Categories: Retail | Tags: , , , , , , , , | 18 comments

Comments (18)

  1. Large amount of tech companies in the area.

  2. There are quite a few lessons to learn from this story for all business owners, including Realtors. I struggle to find which lesson is most pronounced, but I think Borders stopped listening to their customers.

    Maybe they thought Amazon would just go away.

  3. The turn of this century has reset many of the rules by which
    businesses have played for decades. The Amazon/Borders situation is
    just an example of the changes.

    I also believe that these changes are more generational. GenX “got it” before many others.

  4. I do miss borders

  5. Interesting what Aaron said about Borders not listening to their customers. I oftentimes find REALTORS doing the same thing with regard to technology … but in reverse.

    There are many useful tech tools for real estate brokerage, marketing, and planning. However, many of our colleagues erroneously assume that every client has the capacity to use and wants to use the tools designed for client contact.

    Borders made a critical mistake by selling a portion of their business that would constitute the larger part of their industry (due to client demand) in the years to come. REALTORS, on the other hand, oftentimes rush headlong into technology under the assumption that they’ll be “missing out” if they don’t adopt the latest software or hardware innovations.

    I see many of our colleagues pushing their clients into contact exclusively in the online sphere. This push in some cases is to the point where the broker encourages the client to “inspect” property virtually and make an offer based on that sight-unseen review.

    Of course, every client has their own tolerance for and need for technology in their relationship with their REALTOR. Few clients, for example, would refuse to communicate by email (though there are some older ones who prefer personal contact). However, many clients would find electronic delivery of listings with a concurrent market analysis useful.

    The key here is to gauge the client’s desire for and understanding of technology before trying to implement it. We need to ask our clients at the beginning of the relationship how they would like to keep contact with us, and adjust that relationship as needed over time.

    If a broker tries to force a client into an unfamiliar or uncomfortable portion of the virtual world, it’s likely the client will view this as the broker’s desire to serve his or her own needs for efficiency above those of the client for informational utility and useful, personal counsel. The broker does this at the risk of a client moving to another broker who understands and better fulfills their tech needs.

  6. Boarders should have listen to their customers and had a better ideal what would have worked to make their online presents work. Todays world moves so fast with technology that you need to keep up or you are out.

  7. Sad and too bad we don’t study historical transformations to assess our current situations in order to plan for the future. The biggest obstacle is denial that we are in a shift. Just looking at the difficulties of going from agriculture to industry; from radio to TV; from horse to car; from train to plane teaches that we must somehow learn to let go of past paradigms and embrace the unimaginable future in order to transform ourselves from dinosaur to currently relevant. I miss the idea of Borders, but Amazon took their culture and adapted it to the technological future. Wonder how many young people were in decision making positions at Borders?

  8. Definitely a lesson to pay heed to. Never willingly cede ground to your competition.

  9. The morale of the story is adapting and molding to change is the only way to survive in our every growing culture

  10. It is sad that Borders is gone. It was a great store.

  11. I agree with Mr. Bosshardt wholeheartedly. Any entity that fails to listen to customer feedback is doomed, but they are in an increasingly crowded market to begin with. As for the property itself, it’s beautiful.

  12. Great information and a lesson learned.

  13. Increased internet shopping has hurt many brick and mortar businesses. As Real Estate Agents we have had to adjust our way of doing business also. From print advertising to websites – from face to face contacts to emails, many different aspects of our business has had to change dramatically within the last few years. We have had to learn to adapt and change with the flow of technology, which isn’t easy for some.

  14. I also agree with Aaron, but I usually do :.)

    Happy to see something good coming out of a bad experience. I am sure Ann Arbor is also happy to have a great replacement for the former Borders site.

    Outsourcing to Amazon….what were they thinking????

  15. I have to agree, any company that does not listen to customers needs and wants is doomed to fail.

  16. Great article on the need to stay focused on our business plan as Realtors. Especially when it comes to our choice of where and how we choose to use technology to grow that business.

  17. I am sure that many companies did not think the Internet would become, what it has, nor that technology would advance to the degree it has. Unfortunately for them, they did, and some still are doing “too little too late.” In business we must always remember that even if we may be averse and resistant to change, when it comes to our livelihood and how we do business, it is best to embrace it and try to excel.

  18. One lesson from this article is that it is important to shift as the market and customers’ requirements change. Many businesses wait until it’s too late to make the necessary adjustments.

Leave a Reply

Required fields are marked *