Vacancy Increases in Detroit’s Prime Office Buildings

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There’s an increase in vacancy rates in Detroit’s prime office buildings in 2021. According to a new report from the Chicago-based brokerage house JLL, there’s a 10.2% vacancy rate totaling more than 10.9 million square feet. That’s an increase from a 7.7% vacancy rate in 2019 and just under 9% in 2020. Rent also dropped 0.4%. Although 21 downtown prime office buildings comprise the vacant real estate, the Renaissance Center accounts for almost 45% of all the vacant space.

Hundreds of Metro Detroiters At Risk For Eviction

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Detroit tenants behind on their rent because of coronavirus pandemic hardships are no longer protected from eviction, according to Detroit’s 36th District Court. After the CDC’s eviction moratorium was deemed unconstitutional by the U.S. Supreme Court, the Detroit court declined to issue its own moratorium. Hundreds of renters are at immediate risk of eviction. According to census data, 28% of metro Detroit renters and home owners are behind on their rent or mortgage. Organizations and agencies continue to work on connecting tenants with COVID Emergency Rental Assistance funds.

Buying a Home Is The Less Expensive Option in Metro Detroit

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According to data from Realtor.com, it’s 14.1% cheaper to buy a home in metro Detroit than it is to rent. Other data suggests that it’s 17.1% less expensive. Detroit lands in 10th place on a list of places where buying a home is more affordable than renting one. The president of RE/MAX of Southeastern Michigan suggest that those numbers don’t consider the other costs associated with owning a home. Low rental inventory and high rental demand, low rental turnover, and low mortgage interest rates have contributed to the trend.

Metro Detroit Home Purchases Decline

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According to data from RE/MAX, home purchases in metro Detroit had the fourth largest decline in the country. RE/MAX surveyed metro areas, and Detroit had a 19.6 percent decrease in closed homes in July. Factors that likely contributed to the decline include Michigan’s coronavirus-related lockdown that lifted in June last year, creating a backlog of pending sales that exploded into July. This lifted that month’s 2020 total. Buyers are exercising more caution and questioning the prudence of paying more than the asking price. Add the recent weather and flooding into the picture and potential buyers hesitating while flood-damaged homes are fixed. Limited inventory is also a contributing factor.

Detroit’s Condo Market Picks Up

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Earlier this year, Detroit’s condominium market had 11 months of inventory. Now, it’s down to 7.6 months of inventory, ranging from downtown to areas east, north and west. That promises a healthy supply and demand, albeit probably short-lived. The rising costs of building materials, as much as 50 percent, are driving construction costs up and could threaten to cripple condo development projects. Increases in price may drive future buyers away. Empty nesters and older buyers are gravitating toward luxury condominium purchases, while first-timers or younger buyers are deciding to purchase single-family homes after seeing the high prices of condos.

MDOT Discusses Plans for Detroit’s Amtrak Site

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In February, the Michigan Department of Transportation met with developers to discuss Detroit’s Amtrak site. They want to build a new intermodal transportation facility on the site, with a mix of transit uses like passenger rail and bus, and maybe even residential and retail. MDOT is exploring private development on the property in an effort to offset the $36 million-$45 million cost of the intermodal facility. MDOT is applying for a federal RAISE (Rebuilding American Infrastructure with Sustainability and Equity) grant through the U.S. Department of Transportation.

Eviction Moratorium Extension Causes Angst

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Metro Detroit landlords continue to wrestle with the eviction moratorium extension. Some have drained their savings and maxed out credit cards to cover costs on their rental properties. The eviction moratorium had recently ended, only to be extended again until October 3. Tenants who face eviction often lose everything when their belongings are disposed of. More than 18,000 applicants have been approved for more than $117 million in rent relief, with thousands more awaiting approval of their application. $400 million still needs to be distributed. Although the extension was intended for communities that had substantial Covid 19 spread, Wayne County now qualifies after entering the substantial transmission category on Wednesday afternoon.

Musicians Learn to Transpose Their Skills

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Across Metro Detroit, many musicians have migrated from the stage to the realty office. They’ve found that real estate requires a lot of people skills, collaboration, being OK with a constantly changing schedule and multi-tasking, not unlike the moxie it takes to play with a band. They also love the flexibility that being a real estate agent allows. Being a musician is far from a 9 to 5 job. It requires long hours, time on the road, and resourcefulness, similar to what it takes to be a successful realtor.

Detroit Property Receives A Big Facelift

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A small 1970s vacant and outdated Detroit building received a big makeover. Located along the Qline, between Campus Martius and Hart Plaza and near the 40-story Guardian Building, the building at 511 Woodward Avenue is now home to Michigan’s first Capital One-branded coffee shop with prospects for future restaurant and office tenants. Businessman Zaid Elia completed the $18 million-plus redevelopment which includes an outdoor patio, floor-to-ceiling windows and a slightly expanded footprint. Each floor plate is 7,500 rentable square-feet, making it a good fit for office tenants who may need less space than before COVID-19.

 

 

 

Detroit’s Clark Park to Receive Facelift

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As part of Mayor Mike Duggan’s Strategic Neighborhood Fund initiative, Southwest Detroit’s Clark Park is slated for $3.3 million in upgrades. Improvements will include a new entryway along Vernor Highway, new walkways, paths, a playground, a splash pad and a plaza. Improvements will also be made to the recreational and fitness fields. The makeover will start in August and wrap up in the summer of 2022.