Commercial Real Estate Faces Existential Crisis

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When compared to the 20 bankruptcies that were filed per month over the last year, the 11 companies who filed for bankruptcy over the past month could point to a slow down. Cheap money/capital have helped troubled companies stay afloat, slowing the bankruptcy filings.

However, the retail, office, and hotel sectors are particularly vulnerable. The impact of the pandemic is trickling down as the government intervention to prop up the economy starts to slow.

New Midtown Development Details Emerge

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Farmington Hills-based City Club Apartments, LLC, has a $95 million vision for its Midtown development. The Detroit Planning Commission will consider a rezoning request for a 2.3 acre chunk of land at a February 4 hearing. The development will include a 16 story tower with 273 apartments, a complementary building with 77 apartments and 12,500 square feet of street level retail space. A one-story building with 32,000 square feet will house a national general merchandise retailer; retailer specifics are presently unknown. Construction begins this summer on the southeast corner of Woodward and Mack.

Former Real Estate Executive Charged with Wire Fraud

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Viktor Gjonaj, former head of the Troy-based Imperium Group, LLC, has been charged with bilking at least two dozen investors of $26.4 million to fuel his Michigan lottery habit. Gjonaj promised investors that he would buy, develop, and resell real estate for a profit, but did not promise a specific rate of return. Of the 66 real estate deals presented, none came to fruition. Instead, he used the funds to support his $1 million a week Daily 3 and Daily 4 gambling habit. The state’s $5,000 daily limit on lottery terminals, installed in 2018 in response to Gjonaj’s lottery activities, did not slow his habit. Gjonaj’s current location is unknown.

Real Estate Transactions Secure Permanent Trail Easements

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 Michigan’s DNR purchased 67 miles, with a price tag of $985,969, in an effort to secure permanent trail easements and improve existing trail connectivity. The purchase spans Dickinson, Gogebic, Houghton, Iron and Ontonagon counties in the Upper Peninsula. The purchases were funded, in part, by the Michigan Permanent Snowmobile Easement Fund. The bulk of the purchase is for snowmobile trail use, but multi-use trail opportunities may be in the future.

Western Michigan Is A Seller’s Market for Homes

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In the past four months of 2020, the number of homes sold exceeded the number of homes listed, demonstrating the continuing residential real estate boom, and showing that the residential market continues to be very seller-friendly.