Former execs buy 2 downtown buildings
Tom Henderson| Crain’s Detroit Business
Using the Madison Building in downtown Detroit as the model, a group of former Barracuda Networks Inc. executives wants to create a large hub for tech startups in downtown Ann Arbor.
They have signed a purchase agreement to buy two adjacent office buildings downtown and are negotiating to buy one or two more buildings. They hope to close on the first deal in about a month and have a build-out done in six months.
Pending the closing on the real estate sales, they declined to specify the specific location. But the premise of the idea is that startups in the area need a place to call home, and current options in downtown Ann Arbor are too hard to come by.
“Developers want you to sign a five-year lease, and for a startup, that makes no sense. In five years, you’ll either need four times the space, or you’ll already be dead,” said Joe Malcoun, CEO of Ann Arbor-based Nutshell Inc., who is one of the investors in the real estate project. “There are startups scattered around downtown, hidden in back offices on the third floor. They don’t know each other. There’s no sense of community,” said another investor, Nutshell co-founder Guy Suter. “They don’t want to be in office parks; they want to be downtown. They want to be able to walk to nice restaurants. We want to get them into one area and build a startup ecosystem that has density. We need a vibrant tech scene downtown.”