Detroit (AP) -- General Motors Corp. said Thursday that the shaky real estate market convinced the automaker that it was a good time to buy its previously leased headquarters in downtown Detroit's towering Renaissance Center for $626 million.
GM revealed the May 1 purchase in a filing Thursday with the Securities and Exchange Commission. GM said it paid $626 million cash for the headquarters and $200 million cash for two office properties in nearby Pontiac.
The move comes in the face of GM's own business difficulties, including a $3.3 billion first-quarter loss and Toyota Motor Corp.'s move into the worldwide sales lead.
GM moved its headquarters from Midtown Detroit to the Renaissance Center in 1996 and sank $500 million into improvements to the complex, originally built by Ford Motor Co.'s real estate arm in the 1970s.
At the time, GM decided to finance the project with loans and lease the building from the lenders, GM spokeswoman Renee Rashid-Menem said Thursday night. She said the lease expired May 1, and GM decided against renewing it.
``We opted to purchase it outright because of the condition of the real estate market,'' Rashid-Menem said.
Rashid-Menem said such leases from banks are ``a pretty typical arrangement when someone buys a large piece of property.''
As real estate conditions change, GM would consider reselling the building and entering another lease agreement, she said.
The Renaissance Center opened along the Detroit River in 1977. The $350 million project was spearheaded by Henry Ford II in an attempt to revive downtown Detroit following the 1967 riots. A recent makeover is part of a $1 billion private-public investment in the city's riverfront.
GM reported it lost $3.3 billion in the first quarter, including $2.9 billion in one-time charges. A slowing economy and rising gas prices have hurt GM, which saw revenues in the quarter fall to $42.7 billion from $43.4 billion a year earlier.
GM lost the global sales lead to Toyota in the first quarter, selling 2.25 million vehicles to the Japanese rival's 2.41 million.
Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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