DETROIT—The city of Detroit may struggle with a bankrupt government, a high rate of unemployment and endemic poverty, but many of the surrounding suburbs remain attractive to investors. SOBB Sterling LLC, a partnership led by Joshua Simon, president of Scottsdale, AZ-based commercial real estate development firm SimonCRE, just acquired Market Place Shopping Center, a 258,416-square-foot development in the town of Sterling Heights just northeast of Detroit. The property had been in foreclosure and the partners picked it up for $7.6 million. Simon plans to repair and update the center and hopes to bring back tenants and shoppers.
“Even though the City of Detroit is experiencing financial difficulties, there are numerous reasons to invest in the greater Detroit area,” explains Simon of his most recent purchase. “We are investing not only in Market Place, but also in the city for the long term. Maintenance was deferred on this particular shopping center as is typical when properties fall into foreclosure. We plan to immediately remedy those outstanding issues.”
A 101,909-square-foot Target retail store and a freestanding, 82,517-square-foot, 20-screen MJR Theaters anchor the center, which is located on the Van Dyke Ave., a busy thoroughfare in Sterling Heights. The remainder consists of a freestanding Ruby Tuesdays and a variety of regional and local retailers. More than 50,000-square-feet of retail space is available, but Simon says he is working with several national, regional and local prospective tenants to occupy the space.
He plans to update the center's landscaping, repair the parking lot and make overall building improvements. In addition, Target has begun remodeling their store to match the look of the rest of the shopping center.
In some ways, the economic troubles of the city have not touched some of the suburbs. Sterling Heights, for example, has an unemployment rate of less than seven percent and an average household income over $60,000.
“There are few developers who are paying attention to Detroit and its surrounding areas because of the stigma associated with bankruptcy,” adds Simon. “We view this property as a diamond in the rough and know that with focused improvements and the correct retailer mix, it will again be a thriving shopping center.”
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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.
