Motor City Real Estate Development Revival; Detroit RE Feasibility Projects Percolating
Real estate developers in Detroit, Michigan, mostly comprised of local entrepreneurs operating in the home of the world’s largest auto manufacturers, know plenty about boom and bust cycles. After all, during the past two decades, Detroit has suffered from a big decline in its urban population, thousands of homes in disrepair remain vacant, the city’s unemployment rate is nearly 2x the national average and bank lending remains tight for even the best-thought-out urban development planners. In sum, this is a real estate contrarian’s best combination of circumstances and explains why a cadre of upper-end and luxury apartment builders are digging in and others are following suit, evidenced by an eye-popping pop in Detroit RE feasibility projects commissioned by up and coming real estate developers who are aiming to re-build one the nation’s most storied urban areas.
As noted in a March 1 front page story in the Wall Street Journal, “Detroit seems poised for a resurgence, even if Detroit’s renewal has been heralded before, only to be undone by economic forces. Following the Super Bowl held here in 2006, city boosters predicted a revival before a national recession two years later halted progress. Yes, it has only been three years since Detroit filed for bankruptcy protection, the largest U.S. municipality ever to do so, and yes, many of the city’s 139 square miles are blighted. On many blocks, boarded-up homes and grassy lots outnumber occupied residences.”
But…this time, developers and city officials point to buildings actually being built and filling up. Downtown’s residential occupancy rate is now more than 99%, according to the Downtown Detroit Partnership, a nonprofit that promotes development, numbers that point to high demand and limited supply. More so, investment banks are now partnering with the state and municipal agencies to help bring a renaissance to Detroit. The Goldman Sachs Social Impact Fund, a fund created by the Wall Street bank, and the Ford Foundation are backing building initiatives and in the case of that partnership, they’ve built a 278 unit project in which tenants are now moving into…
To read the entire WSJ article “The Urban Condo Boom Has Reached Its Final Frontier: Detroit”, click here
Motor City Real Estate Development Revival; Detroit RE Feasibility Projects Percolating