DETROIT—This city has garnered a lot of attention recently due to the striking revival of its CBD. Companies that once made their headquarters in the suburbs, such as Quicken Loans, have headed downtown, and thousands of new residents have brought the urban core's residential vacancy rate down to almost zero. One aspect of this revival that may have escaped the attention of some, however, is the importance of tech firms.
“Quicken is really a tech company,” Dave MacDonald, managing director, JLL, tells GlobeSt.com. “The end product may be loans, but the way they do it is really high-tech.”
Dan Gilbert's firm and its family of companies have bought up more than 80 downtown properties, many of them 75 to 100 years old, the type of structure most favored by tech-savvy millennials. These once-underutilized structures now host about 13,000 workers every workday, and all this activity has attracted other smaller firms that want to get in on the action.
“It's safe to say that both Quicken and the other companies under its umbrella are tech magnets,” says MacDonald. One of the most influential is Rocket Fiber, a Detroit-based fiber-optic provider that in 2015 activated an internet fiber ring for the city's downtown that offers connections 1,000 times faster, making the city far more attractive to tech start-ups.
And new firms can settle here, grow their business, and not have to pay Silicon Valley prices. According to JLL's latest US Technology Office Outlook report, the market's average office rent per-square-foot is $18.32, making it the lowest-cost market in the country. In fact, occupying 5,000 square feet in Detroit is an approximate 63% premium compared to high-cost coastal markets.
JLL highlights the case of The Madison Block, a short stretch of buildings on Woodward Ave. and Broadway St. near Comerica Park, the new home of the Detroit Tigers. The block serves as a tech incubator: rent is affordable and there is opportunity to expand. The hub, which includes backing from Gilbert's real estate firm Bedrock Ventures, is now home to more than 25 tech startups.
Another important driver of Detroit's tech industry is the role it now plays in automobile manufacturing. The research into and possible production of driver-less cars will almost certainly increase the region's need for high-tech firms, says MacDonald. “This is definitely not the auto industry of yesteryear.”
DETROIT—This city has garnered a lot of attention recently due to the striking revival of its CBD. Companies that once made their headquarters in the suburbs, such as Quicken Loans, have headed downtown, and thousands of new residents have brought the urban core's residential vacancy rate down to almost zero. One aspect of this revival that may have escaped the attention of some, however, is the importance of tech firms.
“Quicken is really a tech company,” Dave MacDonald, managing director, JLL, tells GlobeSt.com. “The end product may be loans, but the way they do it is really high-tech.”
Dan Gilbert's firm and its family of companies have bought up more than 80 downtown properties, many of them 75 to 100 years old, the type of structure most favored by tech-savvy millennials. These once-underutilized structures now host about 13,000 workers every workday, and all this activity has attracted other smaller firms that want to get in on the action.
“It's safe to say that both Quicken and the other companies under its umbrella are tech magnets,” says MacDonald. One of the most influential is Rocket Fiber, a Detroit-based fiber-optic provider that in 2015 activated an internet fiber ring for the city's downtown that offers connections 1,000 times faster, making the city far more attractive to tech start-ups.
And new firms can settle here, grow their business, and not have to pay Silicon Valley prices. According to JLL's latest US Technology Office Outlook report, the market's average office rent per-square-foot is $18.32, making it the lowest-cost market in the country. In fact, occupying 5,000 square feet in Detroit is an approximate 63% premium compared to high-cost coastal markets.
JLL highlights the case of The Madison Block, a short stretch of buildings on Woodward Ave. and Broadway St. near Comerica Park, the new home of the Detroit Tigers. The block serves as a tech incubator: rent is affordable and there is opportunity to expand. The hub, which includes backing from Gilbert's real estate firm Bedrock Ventures, is now home to more than 25 tech startups.
Another important driver of Detroit's tech industry is the role it now plays in automobile manufacturing. The research into and possible production of driver-less cars will almost certainly increase the region's need for high-tech firms, says MacDonald. “This is definitely not the auto industry of yesteryear.”
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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.
