Harper Woods Developer Buys Cleveland Apartment Project.

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Harper Woods-based developer American Community Developers Inc. purchased and has renovation plans for a 484-unit apartment project in Cleveland.  The company specializes in the buying and rehabilitating affordable housing. Cleveland’s Rainbow Terrace was built in the 1950s and sits on 31 acres. The units are a mix of garden-style apartments and townhouses for low-income families. The company paid $8.55 million and expects to spend about $18 million on upgrades and deferred maintenance.

 

 

First Merchants Corp. Closes On Level One Bank Acquisition

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The Indiana-based lender First Merchants Bank acquired Level One Bank in November. The acquisition has cleared its legal hurdles, and First Merchants Corp.  closed on the $323.5 million purchase. The full integration of Level One into First Merchants is expected later this year. The combined bank is one of the 10 largest banks operating in Michigan. Patrick Fehring, Level One CEO, is expected to retire after the completion of the merger, but will join First Merchants’ board of directors next month. The combined bank will have 126 banking offices in Michigan, Indiana, Ohio and Illinois.

Affluent Atlanta Neighborhood Self-Segregates

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The affluent Atlanta neighborhood of Buckhead wants separation from Atlanta. Spikes in crime across the city are contributing to the fear, but racial division plays a part. Buckhead is a majority-White neighborhood, while Atlanta has a Black majority. Should Buckhead gain its cityhood, it would drain revenue from a critical tax base and deepen the residential caste because residents often support policies like exclusionary zoning and neighborhood school boundaries.  These practices lock others out of community advantages.

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.

 

 

Historic Train Depot in Lansing is Due for a Makeover

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A 113-year-old train depot on Michigan Avenue, just a few blocks from the state Capitol building, is coming back to life. Vacant since 2016, the Lansing property was the former location of Clara’s restaurant, and is being redeveloped by the Gillespie Group. A  national coffee retailer will occupy part of the depot, while the remaining 4,045 square feet may be repurposed as a restaurant, retail or office space. A new parking lot and drive thru will be added, along with a green space parklet. Construction is expected to begin in September and wrap up during summer 2022.

Second “First” Home Buyers Accelerate Home Prices In Southwest Michigan

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A beachfront house in New Buffalo will set a new record for Southwest Michigan.  It will be the fourth home in New Buffalo to sell for $4 million or more in the past year. The real estate boom in Southwest Michigan is not only at the upper end of the market. Along the 16-mile strip of shoreline towns from New Buffalo to Bridgman, home sales were up 48 percent in the first quarter of the year from the same time in 2020. Buyers aren’t necessarily buying vacation homes. They may keep their first residence in another city, but think of New Buffalo as “home” for now as they wait to see how things play out with the pandemic. New Buffalo is seeing an influx of buyers from Indiana and the Chicagoland areas.

Michigan Legislature May Nix Short-Term Rental Laws

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Bills in the Michigan legislature that have bipartisan support would nix local laws that ban or limit short-term rentals through zoning. The bills are controversial and have garnered heated debate. Proponents like Airbnb, realtors, and lawmakers from both parties say the proposed changes to state law are about personal property rights and do not prevent cities from regulating short-term rentals. Opponents, which include leaders from cities all over the state and hoteliers, say they do not support an outright ban on short-term rentals. They feel that local leaders should have the power to decide what rules are most effective for their communities.

Downtown Lansing Struggles With Fewer Customers

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All Michigan downtowns have been hit by the pandemic. With decreased foot traffic and former customers continuing to work from home, business is slow. But downtown Lansing has been hit especially hard as its businesses rely on the State of Michigan office hub. Struggling businesses have lost up to 90% of their sales while waiting for state employees to return to work. Unfortunately, even once the pandemic fades, far fewer state employees will return to work on a daily basis.

Crossroads Mall in Portage $77M Underwater, Deed-In-Lieu Possible

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The Crossroads Mall in Portage, Michigan (near Kalamazoo) has recently been valued at $22.6M. Unfortunately, the mall has $100M in mortgage debt. The owner is currently in discussions with its lender about a deed-in-lieu. Although stories about the decline of the regional mall are all too common, the decline of Crossroads has been stunning, as it was valued at $152M as recently as 2013.

In addition to the square footage covered by the mortgage, the mall is home to a (vacant) Sears store, as well as JC Penney and Macy’s anchors.

As mentioned in a recent Weekly Brief, the mall is dead.

Family Video Pivots Once Again

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Family Video will close about 60 Michigan locations in the next month. A decline in foot traffic and new movie releases due to COVID-19 has contributed to the closures. However, the owners will still be in the game because they own the underlying real estate. The strategy of purchasing corner properties located in close proximity to neighborhood traffic has made the properties highly desirable for future tenants.