When businesses look for space in Ann Arbor, chances are good they’ll end up talking to former beer deliveryman Jim Chaconas and his young sidekick, Brendan Cavender.
Gone are the shelves of books and magazines from the old Borders flagship store, and gone with them are the walls, floors, and windows. The 44,000-square-foot space was made up of four separate but contiguous buildings, three fronting Liberty and another fronting Maynard, now housing Barracuda Networks. The remainder of the first floor is now gutted, and workers are installing huge new windows on both floors.
“It’s one of the two big things we’re working on now,” says Jim Chaconas, a solidly built man with thick black-gone-to-silver hair and a prominent mustache. “First is Borders headquarters [which sold for $6 million earlier this year]. We’ve got two large tenants we’re working on for that. Second is the old Borders store. We’ve got the deal on the upstairs done, and we’ll probably have the downstairs leased by December.”
“This building is the key to Liberty,” says Brendan Cavender, Chaconas’s youthful right-hand man at the local Colliers International office, “and we’re not going to be dependent on any one tenant. The downstairs will have five storefronts on Liberty and two on Maynard. Upstairs is going for $24 per square foot. Street level is going for $45 per square foot, more for the corner space, and $10 per square foot downstairs–and a lot of tenants are interested in putting in staircases and elevators for a kitchen or bar downstairs.”
Tenants so far include the U-M, two restaurants–the Slurping Turtle and the Knight family’s as-yet-unnamed new venture (see Marketplace Changes, p. 45)–and global marketing firm PRIME Research.
“We’ve been growing at a tremendous pace, and we’re out of room at our present location,” says Julie Myers-Beach, accounting and human resources manager for PRIME North America. “The owner of the company was over from Germany, and he saw the building was just sitting there and that it was in the perfect location: close to the university and close to other tech companies.
“There was a sign on the door that said ‘call Jim,'” Myers-Beach continues. “I did, and Jim Chaconas was great. When we started to work with the building’s owner, I said ‘I’m unhappy about some of the stuff in the lease,’ and as I’m trying to explain why, Jim steps in and says, ‘She’s 100 percent accurate.’ He was the signing agent with the owner as well as representing me, and the more money the lease is worth, the more Jim makes. But he went against his own interests to do what’s right. I couldn’t say enough nice things about that man.”
After literally breaking his back in the beer business, Chaconas switched to commercial real estate twenty years ago. By his own estimate, he now controls more than half of the business locally. He’s done many of the deals on Washtenaw and most of the deals on Main, particularly on the key block from Liberty to William. He revitalized the Westgate Shopping Center and the Courtyard Shops on Plymouth Road, and brought Zingerman’s Roadhouse to the west side.
“It’s the first time a single individual has become the dominant brand,” says his former boss, Dave Lutton, owner of Charles Reinhart Company Realtors. “We’ve seen it in residential before, but not commercial. Before Jim, commercial was an old boys’ club, and nobody dominated like Jim has come to. Jim Chaconas is without question the most successful commercial salesman in the county, probably the biggest in history.”
Though he can recite the location, size, price, landlord, and tenant of every important piece of commercial real estate in Ann Arbor, Chaconas isn’t a native.
“I was born in Washington D.C. in 1952,” he says, sitting in the street-level conference room of his offices in McKinley Towne Centre. “My father had a bar in D.C. He got a job with Schlitz, and in 1960 they brought him up here to manage their distributorship. It was on Huron where Say Cheese is now. We moved around, and I went to Eberwhite, then Northside, then Eberwhite again, then Slauson, then half a semester at Pioneer. Then we moved to Florida, and I went to school there. Then we came back to Ann Arbor for half a semester of my senior year.”
Chaconas spent time at EMU but says that he was really educated at the tough-as-nails Great Lakes Maritime Academy in Traverse City. He came to work full-time at the beer �xADdistributorship–which by then his father owned–in 1975. “I didn’t want to do it. My father and I didn’t get along. The beer business was physically demanding, and in 1980 I broke my back, so I couldn’t work.”
After he’d recovered sufficiently, Chaconas worked with his mother selling houses. “When I started, I didn’t have a clue or a car, so I used to have to take cabs to appointments.” That lasted just two years. “My father talked me back into the beer business, and that was not a good idea. We didn’t have a great relationship to begin with, and this made it worse. But he was having trouble, and I turned it around.”
Chaconas left the beer business for good in 1994 when he went to work for Reinhart. Dave Lutton “got me into commercial real estate,” he says. “I told him I didn’t know anything about it. For the first three months, I went out and took pictures of every commercial building in town, and I learned the landlord and the renter and the price and the lease rate for every one of them.
“I ran ads and did direct marketing, and business grew. I doubled my income each year for the first four years–and the first year was two-and-a-half times more than I’d ever made in the beer business, but with a lot less hours.”
“Jim worked with us for seven years, and he went from not having a commercial practice to being one of the strongest players in the market,” Lutton recalls. “He did things no one was doing in print advertising. Plus, he’s one of the hardest-working guys you’ll ever meet, and he’s a strong competitor. He loves to win.”
But in 2001, “McKinley made him an offer he couldn’t refuse,” Lutton says. “And he took Debi [Maghes, his longtime assistant] with him. Debi is very competent, and she sweats the details. They’re a team, and some days Jim would be lost without her.” Chaconas agrees, saying Maghes is “instrumental to the entire operation.”
Albert Berriz, McKinley’s president and co-owner, calls Chaconas “the absolute best at what he does in Ann Arbor and Washtenaw County. He ran our local brokerage business. It was a great progression for him. He had taken that platform as far as he could inside [Reinhart’s] residential broker organization. We put [McKinley’s commercial business] together for him, and it was a huge success–for him and for us.” And when, eight years later, he took another step up, there were no hard feelings–at Colliers International, he still handles McKinley’s commercial listings.
Colliers has nearly 500 offices worldwide, but, even in that big world, the Ann Arbor office stands out. According to Cavender, in the value of transactions handled, “we’re in the top ten of Colliers businesses.”
Chaconas isn’t shy about his �xADsuccesses–or his failures. “We got into new construction, and, boy, was that a mistake! We were part of a deal that built the Wood Duck Business Park in Saline, and what saved our butts was Saline put in a high school across the street.” (They sold the vacant space as business condos, mostly to medical offices.) “We got involved with income property on the Eastern campus. That was not my idea, but I went along. Ypsilanti’s a cool town, but the campus is not livable, and we got out with the skin of our teeth.”
As for Ann Arbor, Chaconas knows the town’s high spots and low spots–and cheerfully ranks them. “State and Liberty is the best place for retail in town. Urban Outfitters has the largest grossing retail per square foot in the city. Main between William and Liberty is next, but head north, and each block, drop the value 20 percent. And north of Huron [retail] doesn’t exist. Washtenaw is next, though it’s congested, then Plymouth, then Stadium and Jackson. But head east, and it dies. Or go west, and take Village Kitchen and Plum Market out, and it’d die. Plum Market was a godsend.”
And he knows how lucky Ann Arbor is compared with the rest of the county. “East of 23 on Washtenaw, values drop in half, but all retail outside of the city is overbuilt. Outside Ann Arbor can only handle large stuff like Lowe’s and Walmart and Costco and small stuff like Chinese take-out and pizza delivery. Soft goods retail won’t happen.”
Chaconas has seen big changes in the city, too. “Main Street was dead–Briarwood killed it–but the restaurants brought it back. Same thing when Jacobson’s left State and Liberty: it devastated the neighborhood. But when Borders left, it didn’t hurt the area at all. It’s still where everyone wants to be, especially IT. And restaurants are doing well there now. Only Google eats on site–everybody else eats out–and restaurants want to open there.”
Of all the things that have happened to the commercial real estate market since he’s been in it, Chaconas says the worst was the Great Recession. “Four or five years ago, the world ended. The market dropped big time. We had huge amounts of money owed us, and people didn’t pay. That had never happened to us before. We lost more than $250,000 in eight months. And we never got it [back].”
These days, he says, “the market is about 70 percent recovered, which is OK, but not close to where it should be. There’s a ton of space all over the place, and some great locations have been [vacant] two years, like the Ufer Insurance building on East Stadium.
“We’re booming on retail, and I hear housing is doing well, and apartments are booming. But medical died two years ago, and it hasn’t come back. We don’t even get calls for medical [space] anymore, and we used to do 25 percent of our business in medical. It’s because medical is scared to death at what the cost of health care is going to be because of the health care law.”
For the moment, “our business is good, not great,” Chaconas says. “The last three years we’ve had good growth. There were ten or eleven big deals in town, and we got most of them.” He believes the reason they were successful in hard times was “we never backed off. We kept marketing. We kept talking to banks. Yeah, we did some foreclosures–it was the times–but not for people we sold to, thank God.”
Despite his commanding presence in the market, Chaconas keeps his staff small. “When I was at McKinley, it was up to fourteen people, and they got rid of eleven. I didn’t need more then. I was already doing so much of it anyway. Now I have five people, and I don’t need more.”
Chief among them is Brendan Cavender, Chaconas’ partner. A twenty-four-year-old Ann Arbor native with a U-M degree in business sociology–a major he devised himself–Cavender is as brash as his boss. When I ask them what’s the best thing to happen to the city’s commercial real estate market, Cavender jumps in before Chaconas with his own question: “You mean other than me?”
Cavender’s first sale was of himself. “Brendan kept pestering me, and I wouldn’t talk to him,” says Chaconas with a laugh.
“I wouldn’t take no for an answer,” says Cavender. “I called many, many times before I finally got a response: ‘Call Debi.’ I didn’t know who Debi was or how to contact her, but I figured it out. And the first thing he did was to make me learn every commercial building in Ann Arbor!”
“Everybody here knows all the market prices,” says Chaconas. “If someone calls on the phone with a question, you shouldn’t have to say you’ll get back to them. You should know the answers in your head, or you shouldn’t be in the business. A computer is a tool; it’s not knowledge.
“The key is: don’t lose the personal touch,” Chaconas continues in full flow. “We actually go out and look at the property and shake hands and meet people.
“The university growing is the best thing to happen to Ann Arbor,” says Chaconas, back on topic. “Because of that, the population is growing again, and income is growing again. The university has 1,700 people working [in the former Pfizer facility] now. They’re new people they recruited, not people transferred over from central campus, and they’ve got high-paying jobs.
“Things are getting slowly better here,” Chaconas continues. “Thank God the DDA built more parking. We wouldn’t have all these new tenants without them. The DDA are the most helpful people I’ve ever met. And another great thing about Ann Arbor is the planning board, and all the different characters on the planning board that balance each other.
“It’s a cool city,” Chaconas sums up. “Everything is here: education, sports, culture, and a diverse population. True, some people have wacky opinions, but that makes things different–and interesting.”
Chaconas is sixty-one. Asked where he thinks his business will be in ten years, he just laughs. “I’ll be dead, and that’ll be his issue,” he says, nodding at Cavender. “I’m one of the youngest guys in the business in town, and there’s no heir apparent, so it’ll be nice to see someone who deserves it to carry it forward when I die.”
Until then, Chaconas says, “I just want an office here. I’ll never really retire. I like the job too much.”