DETROIT—People who associate Detroit with bankruptcy and abandonment would be surprised to walk the streets of its CBD. Once abandoned or under-utilized office towers have been reopened or revived in the last five years and now throb with activity throughout the workday. And the thousands of employees who hustle along these streets have increasingly chosen to also live downtown, filling up existing structures and setting the stage for new multifamily construction.
According to a recent Detroit market study published by Broder & Sachse Real Estate Services, downtown Detroit is at a 98% occupancy for rentable housing, with neighborhoods such as Grand Circus Park and the CBD at 99%.
“Recently we have been seeing a lot of rehab/renovation projects throughout the CBD,” Steve Berlage, president and chief operating officer of Sachse Construction, tells GlobeSt.com. “The Albert is one of the more recently completed projects, but there are several other projects such as the Lofts of Merchants Row, the David Whitney, and Broderick Tower which were renovations to existing buildings.”
The Albert of Capitol Park opened its doors to the public in the summer of 2014. The luxury complex was originally designed by Albert Kahn in 1929 and was added to the National Register of Historic Places in 1980. It has 127 units and has amenities such as concierge services, a fitness center, and a pet grooming room. Demand for downtown housing has been especially strong among professionals in their 20's and 30's, and the Albert was designed to appeal to the working millennial population. Just six months after completion, the complex is fully occupied with an extensive waiting list.
A similar transformation happened at the David Whitney Building, originally built in 1915. It was designed by the architectural firm Daniel Burnham & Co., and was once one of the city's most recognizable skyscrapers. The 19-story Neo-Renaissance building underwent a two-year, $94.5 million historic renovation that has completely restored both interior and exterior architectural elements, including its four-story atrium. A boutique hotel opened on the lower floors and a 108-unit apartment community called The Residences occupies the rest. The latter opened in December of 2014 and all of its units were quickly leased.
Most observers trace the downtown's revival to the 2010 decision by Dan Gilbert, chairman of Quicken Loans, to relocate about 2,000 employees to the CBD. Today, he has over 12,500 employees working downtown and has spent more than $1.8 billion on over 75 properties.
In 2011, Blue Cross Blue Shield, DTE Energy and Quicken Loans took over a combined 750,000 square feet of downtown space. And in 2012, Title Source Inc., Chrysler, PricewaterhouseCoopers, Metro-West Appraisal Co. and Agency 720 leased almost 500,000 square feet. Companies such as Fifth Third Bank, Meridian Health Plan, and Ally Financial have announced plans to expand their presence in Detroit as well.
And with all of this activity, renovating historic downtown structures won't fully satisfy the growing demand.
“Ground-up multifamily developments are having a rippling effect in Detroit, with projects such as the Scott at Brush Park and DuCharme Place in Lafayette Park happening outside of the CBD,” adds Berlage. “We believe the future for multifamily sector in Detroit is the continuation of various rehabilitations/renovations of old buildings, and new construction of apartment communities throughout various Detroit neighborhoods.”
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
