U of D to Redevelop City of Detroit Rec Center

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The University of Detroit Jesuit High School and Academy has purchased the former city of Detroit recreation center and park in northwest Detroit. The 12.5-acre property was purchased in February 2020 for $625,000. As part of the sale agreement, the school will open the renovated center for community meetings and classes, as well as kids’ camps. The all-boys Catholic high school has raised $6.2 million toward the $7.5 million needed for redevelopment. The project will more than double the size of the school’s campus. Renovations on the rec center are expected to be completed by this fall

 

Michigan Real Estate News Headlines – June 28, 2021

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National

Investors compete with homebuyers in tight market

Detroit

U of D Jesuit High School expects to complete campus expansion by fall

Real Estate Insider: Words you don’t hear together often: New Eastern Market office space planned

Stephen Ross, The Platform plan new housing in District Detroit area

Former Woodward Academy heads to auction with $5 million starting bid

Grand Rapids

Wheeler Development plans 39 apartment units, ground floor retail in Eastown

Southeast Michigan

Eastland Center targeted for demolition, redevelopment as industrial, warehouse complex

Western Michigan

New Standard continues West Michigan expansion with Saugatuck Township dispensary

Weekly Brief – June 21, 2021

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While fathers around the United States celebrated Father’s Day yesterday, I celebrated as well with my family. My weekly brief will return next week!

Detroit Coworking Locations Adapt Post-Pandemic

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Prior to the COVID-19 pandemic, numerous coworking spaces were opening or planned in Detroit. While the growth appears to have slowed post-pandemic, and several locations have permanently closed, there are still new coworking locations planned in Detroit.  There are currently about a dozen coworking sites open in the city, with a few more planned in the near future. Some of the new sites are planned for areas outside of the core downtown area.

Detroit Midtown Development Gets a Boost

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Petit Bateau, a $31 million Midtown mixed-use development, received a tax break from the Michigan Strategic Fund. The fund approved a more than $247,000 state tax break to fund environmental decontamination. The 92-unit project also received $2.6 million from the city in tax abatements for decontamination work. Twenty percent of the development’s residential units are set aside for individuals at 80 percent of the area median income or below.

Mall Properties Transition to the Untraditional

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With mall vacancy rate across the U.S. setting new records, it’s no surprise that malls are standing empty or being repurposed. Two new occupants of the Lakeview Mall in Battle Creek are doing just that. A climate-controlled self-storage developer bought the former Macy’s and plans to rent storage units, reachable by an indoor drive-through, and Horrocks Farm Market will move from downtown Battle Creek into the former JC Penney store. This represents the current trend for mall properties. Development experts look toward transitioning these large retail properties into housing, entertainment venues, medical facilities and other non-traditional mall tenants.

 

 

Weekly Brief – June 14, 2021

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While the real estate market was booming in Detroit prior to the COVID-19 pandemic, the comeback has been somewhat slower post-pandemic.

This is largely due to the reliance on the downtown and Midtown development’s reliance on a singular force: Quicken/Rocket employees. As the return-to-work process has been adopting a more hybrid approach and has been slower than anticipated, the rebound of Detroit retail and restaurants has been slower than expected.

There are a couple of other issues in Detroit that have hindered the growth of the real estate markets in Detroit.

First, the Ilitch development of District Detroit has been, to be charitable, lacking. This has had the impact of stalling some development as developers wait to see what, if anything the Ilitch organizations will develop.

Second (and this applies to the residential market much more than the commercial market), the incidence of title fraud is still more than occasional (albeit perhaps not as rampant as it was previously). Until there is some solution to this issue, the residential markets will be hindered. As an observer of the title fraud, it appears some factors feeding the prevalence of title fraud include out-of-state investors who are not “on the ground,” as well as the much higher percentage of non-owner-occupied properties.

Perhaps technology can help solve the title fraud problem. Although few truly understand the benefits of it, the adoption of a blockchain approach to deed recording could slow down title fraud.

Westin Book Cadillac Penthouse Condo Sets a New Record for Detroit

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A Westin Book Cadillac penthouse sold for $3.537 million. The penthouse sits atop the 31-story high-rise hotel in downtown Detroit. The deed was recorded in Wayne County in December. The sale came at a time when the downtown Detroit condo market was oversaturated. Previously, the most expensive Detroit condo sale was recorded at about $1.8 million in 2017. Incidentally, that condo is also in the Westin Book Cadillac.

 

Midtown Development’s Tax Credits Expire

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The Mid development in Midtown is headed toward a financial loss. The developer is still trying to get the project off the ground. Almost $9 million in Michigan Business Tax brownfield tax credits expired on Thursday, June 10, 2021. The 10-year expiration looms because the development team has not built the promised seven stories of one of its proposed buildings by June 10, 2021. The Michigan Business Tax statute requires projects to be completed within 10 years of the pre-approval letter.

Century-Old 1031 Exchange Tax Break Is On The Chopping Block

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Thanks to a 100-year-old provision in the tax code, real estate investors have been able to roll earnings from the sale of one property into the purchase of another to avoid paying taxes on the gains from the properties they sold. Section 1031 covers a transaction that is commonly called a like-kind exchange and provides a tax deferral on the financial gain of a sale if the proceeds are directly rolled into a similar investment property within 180 days. The Biden administration is taking aim at the tax code in the interest of financial equity. The current administration’s efforts would generate $19.5 billion in tax revenue over 10 years.