A $150 Million Asking Price For Detroit Parcels . . . Stunning

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Three properties on the Detroit Riverfront have been listed for a total of $150 million, 15 times the price the owner paid in 2015 and 2016 when he purchased them. Owner Michael Shaya arrived at the price based on the properties’ “potential,” stating that “The price is commensurate the scale and size that can be built on these properties, which is in the millions of square feet.” Experts are skeptical that he will get his asking price.

Houghton Rezoning Requests Meet Different Results

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The Houghton City Council considered two rezoning requests along the Houghton Canal Road. The council approved a request from JRG Development to rezone Houghton Canal Road property from single family residential to community business. However, they denied a similar request by Isle Royale Seaplanes. Council members and residents have concerns about noise pollution, and interruption to and accidents with residential recreation vehicles in the canal. Environmental concerns were also cited.

Farmington Hills Hotel Pivots Due To The Pandemic

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The Farmington Hills’ Holiday Inn and Suites, NW Detroit, is shifting its focus. Due to the pandemic, hospitality and restaurants have taken a beating. Southfield-based Group 10 Management is converting the hotel (which was opened in 2018) into senior independent living quarters. 76 apartment units would be created from 133 hotel rooms in the current hotel layout. The company has kept two other properties in the same location open as hotels as there is a need for extended-stay facilities.

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.

FHFA Extends Forbearance Plans

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The Federal Housing Finance Agency lengthened forbearance extensions for Fannie Mae and Freddie Mac borrowers, allowing coverage for up to 18 months. Eligibility is limited to borrowers who are on a Covid-19 forbearance plan as of February 28, 2021. Some borrowers may now be in forbearance through August 2022. This may impact the timing of the impact of foreclosures discussed in last week’s Weekly Brief.

Bath & Body Works Shifting Stores To Off-Mall Locations

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Retailer Bath & Body Works, which saw a surge in sales due to the COVID-19 pandemic, is planning to simultaneously open 49 off-mall locations, while closing 40 mall locations, in 2021. This will essentially keep the store count level but will shift stores away from malls to freestanding locations.

Mall Retailer Victoria’s Secret Closing Up To Fifty Stores In 2021

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Victoria’s Secret, a brand of L Brands, intends to close up to 50 stores in 2021. This is after the closure of 250 stores in 2020. L Brands continues to look for a solution to its Victoria’s Secret problem, including spinning the brand off to a private equity firm.

Vacant Farmington Hills Industrial Space Slotted for Apartment Complex

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A vacant Farmington Hills industrial space is up for redevelopment. Located on Northwestern Highway, between 14 Mile and Middlebelt, the property will be the home of a 5-story apartment development that includes 200 units, varying in size of one, two, or three bedrooms. The complex would also include a bike path, clubhouse, and pool. Some planning commission members are concerned about the 5-story design and the dense traffic it could cause. They want it to not exceed four stories.

Old Detroit Lions Offices Make Way for Godfrey Hotel

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The old Detroit Lions’ administrative offices, located at in Detroit’s Corktown neighborhood on Michigan Avenue, will be demolished to make way for a Godfrey Hotel. The 227-room, $74 million project will be the 5th Godfrey Hotel in the country. The hotel will contain a restaurant, bar, ballroom, and rooftop café. Construction is expected to take 18 to 20 months and is a joint venture of Oxford Capital Group and Hunter Pasteur Homes.

Wayne County Expands Back Tax Assistance Program

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The Wayne County Treasurer’s Office has expanded its tax assistance program to now assist commercial property owners and landlords who have up to five occupied rental properties. The program gives eligible landlords and businesses time to pay off the back tax debt but doesn’t lower the 18% yearly interest rate. It allows them to pay 25% down and then pay off the rest of their balance through March of the next year.

One incentive to participate in the plan: The tax foreclosure process will move forward this year for all property classifications; the Wayne County Treasurer does not anticipate extending the foreclosure moratorium through this year, even for residential properties.