The RenCen Comprises Over Half of Downtown’s Vacant Office Space

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Downtown Detroit is home to some of the biggest empty office spaces in the state. Over half the of the vacancy across Detroit’s best office buildings is inside the Renaissance Center. Six RenCen office towers, four of which are owned by General Motors Company and two that are owned by a publicly-traded utility from New Jersey, comprise 26.1% of the total office space surveyed by JLL’s Skyline report. The office towers make up nearly 53% of the vacancy across the 22 buildings surveyed. The towers took a hit during the COVID-19 pandemic when GM allowed its employees to work remotely, and tenants like Deloitte LLP and Blue Cross Blue Shield of Michigan opted for space in other buildings. The health of the office market in Detroit and elsewhere continues to be a concern in commercial real estate.

 

Detroit’s Hotel Boom Is Just The Beginning

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Detroit’s hotel market is showing signs of revitalization. Operators and developers are investing millions in new and renovated properties. Hotel occupancy is coming back to pre-pandemic levels after a lean-to-starvation year in 2020. Cambria Hotel Detroit Downtown is expected to open in February. Corktown’s Godfrey Hotel, west of downtown, is slated to open in the spring. The Westin Book Cadillac’s $20 million renovations begin next month. In addition, Olympia Development and Related Companies have plans to build two hotels as part of a $1.5 billion investment in the District Detroit. Operators of Huntington Place are pushing for the construction of hotels at the former Joe Louis Arena site. The tourism industry hopes to attract more large-scale events, like the 2027 NCAA Men’s Basketball Final Four that was awarded to the city last month.

 

Developer Plans 250-Unit Project For Grand Rapids’ Celebration Village

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Victory Development Group is planning a 250-unit mixed use project in Grand Rapids’ Celebration Village. The developer is seeking a planned redevelopment district amendment for Celebration Apartments, a mixed-use apartment project it is proposing. The Grand Rapids City Planning Commission will hear the request on January 12. Victory Development group will ask for a change in use or character of the development, an increase in residential density, and an increase to five stories from the maximum allowable building height of four stories. The project would be located on the only remaining vacant parcel in the Celebration Village commercial development. Victory Development Group is the firm behind the 280 Ann and Victory on Leonard apartment projects on Grand Rapids’ northwest side.

 

Michigan’s Residential Real Estate Market Is Stabilizing

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The 2023 real estate market is finally starting to look like it might normalize. Seasonality is back in the resale market, and rent increases and high supply costs have mostly stabilized. However, interest rates will remain high, pricing some buyers out of home ownership. Some materials costs continue to be issues. While materials costs have rebounded for the most part, builders are now more conditioned to check on lead times and suggest alternatives if long waits are indicated. Building materials that once took eight months to arrive are now arriving after 4-6 weeks. Lumber is at pre-pandemic prices, while materials like concrete continue to be expensive. Rents are stabilizing. Fewer people are leaving apartments to buy homes, and people are doubling up. Home sale prices are dropping in some areas, like Wyandotte, Southgate and Riverview. Experts are expecting the industry market to contract, with realtors who are inexperienced in a tight market leaving the business.

 

 

Amazon Fresh Stores Slated for Plymouth and Dearborn Communities

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Plymouth and Dearborn are slated to be the new homes for two new Amazon Fresh locations in metro Detroit. The stores bring the total number in the region to nine. One is being built in a strip plaza at the corner of Ann Arbor and Haggerty Roads in the Plymouth Towne Center retail development. The other is destined for the former Kroger Co. grocery store space at 23000 Michigan Ave. Construction on the Plymouth location began in the fall and is expected to be finished late spring/early summer of 2023. The two stores are anticipated to open in unison.

 

Proposed Mixed-Use Development in Roseville Brings Hope and Criticism

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Hawasli Homes is planning a multi-story, mixed-use development on a 1.2-acre vacant site on Utica Road. The site once held the Tip-Top Bar. While unanimously approved by the Roseville City  Council on Tuesday, the plan is not without controversy. Neighborhood residents say the 81,000-square-foot building will be too out-of-place in the residential area. They want its height to be capped at two stories. The four-story building will be one of the tallest buildings in Roseville. The first floor of the building will be utilized for commercial purposes like a deli, a UPS store, a studio, etc.  The site will include 166 parking sites and studio-sized, one-bedroom and two-bedroom apartments. Critics of the plan worry that the number of parking sites exceeds the city’s requirements and that the project will increase traffic on the two-lane Utica Road. City officials hope the proposed development will transform downtown Roseville into a transit- and pedestrian-friendly location.

Regional Home Sales Decline Despite Interest Rate Drop

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Regional home sales declined into the double digits in November, but prices remained high. RealComp and RE/MAX of Southeastern Michigan released reports on Tuesday confirming that buyers won’t have any price relief when compared to last year. The two separate reports reveal that the number of home sales in Southeast Michigan dropped by more than 14% from October to November. Even with a considerable interest rate drop, the largest since 2008, consumers aren’t enthusiastic. Many are delaying listing their homes for sale because buyer demand is weakening, and they don’t want to risk their current lower mortgage rates.

 

Developer Pitches 57-Apartment Plan For Downtown Grand Rapids

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W&S Development LLC, a Bazzani Building Company affiliate, is pursuing tax incentives for a proposed mixed-use development in downtown Grand Rapids. The Grand Rapids City Commission set a public meeting for January 24 to hear feedback on the application for a Brownfield Plan Amendment and a Neighborhood Enterprise Zone. The developer plans to build two new five-story buildings on the vacant lot at 415 Sheldon Ave. SE. The buildings will include retail space and 57 market-rate apartments. The project is called Wealthy & Sheldon Lofts, with one of the buildings facing Wealthy Street SE, and the other facing Sheldon Avenue SE. The Wealthy Street building will also host 1,800 square feet of commercial space. The 57 new apartments will be divided between the two buildings.

 

Builders Reuse, Recycle and Repurpose

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Bazzani Building Company completed the 730 Leonard Project last year in Grand Rapids. The project is a prime example of adaptive reuse. Renovating existing buildings into new housing is a growing trend. Over the last two years in the U.S., adaptive reuse apartments increased by 25%. Empty office buildings, dilapidated factories, vacant healthcare buildings and old churches have been revamped and repurposed in a sort of nationwide recycling project. In 2020 and 2021, recycling old buildings added 28,000 rentals onto the market. RentCafe predicts that over 77,000 apartments are currently being reprocessed.  The building recycling trend is outpacing new construction.

Grand Rapids Booms With New Projects

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Grand Rapids is close to a achieving a record number of new developments. Despite supply chain issues, inflated costs and interest rates, and labor shortages, the city reported big numbers for new private investment in 2021. According the Grand Rapid’s Economic Development Director, it’s set to outpace 2021’s record again this year. Although its 2022 outcomes won’t be reported until the first quarter of 2023, the data is obvious. Although the city wants to retain the companies that have found their home in Grand Rapids and attract new ones, its biggest issue is an a housing shortage across all price points. Nine projects are in the works for 2023, promising to bolster Grand Rapids’ economy. They include business incubators, a community kitchen, co-working and retail spaces, a healthcare facility and a few affordable housing projects.