Commercial Archives – Page 23 of 24 – Michigan Real Estate News

Weekly Brief – January 25, 2021

January 25, 2021/in Weekly Brief /by Dave Nykanen

As we observe the impact of COVID-19 on the residential, office, and retail sectors, there is a much longer-term factor that I am also observing. The impact of electric and/or autonomous vehicles on real estate.

First, electric vehicles. As the percentage of electric vehicles increases, there will inevitably be an impact on petroleum retailers. These gas stations are generally found in “prime” corner locations. If there is an economic impact on gas stations that causes a contraction of the number of locations, this will open up these locations to alternative developments. However, given the simultaneous decline of bricks and mortar retail, the users of these prime locations remain to be seen.

Second, autonomous vehicles. There are two potential impacts of autonomous vehicles that I want to highlight. As an initial matter, if one is able to “call” a car to pick you up when you are shopping or working, the need for close parking locations may decrease. This could have an impact on the requirement of zoning ordinances to provide on-site parking. If zoning ordinance requirements change, the impact on land use could be substantial. Second, if the shift to autonomous vehicles leads consumers away from vehicle ownership, and towards “on-demand” vehicles, this could have significant impacts both in our infrastructure needs and, in Detroit specifically, in the economy. If vehicles are rented on demand rather than owned by individuals, the sales volume could substantially decrease, as consumers could make more efficient use of available vehicles. Imagine if your car, parked in your office parking lot, was instead able to be used throughout the day by others. If sales volumes decrease, the economy in Michigan could be detrimentally impacted.

Again, these are all long term issues. But a smart investor, owner, or consumer, will monitor the trends.

Air Cargo Is Booming During COVID-19

January 25, 2021/in National /by Tracy Willis

The Cincinnati/Northern Kentucky International Airport, also known as CVG, has 15,000 fewer arrivals and departures since the start of the pandemic. That doesn’t mean their runways are clear. Their air cargo business is booming. Amazon Air is completing a 798,000 square-foot sorting center, a seven-level parking structure, and acres of concrete to accommodate 20 aircraft. The new facility is scheduled to open in the fall. This boom in logistics is impacting industrial development around the country.

Downtown Detroit Has Glut of Condos – One Year Supply On Market

January 25, 2021/in Detroit /by Dave Nykanen

Based on an analysis by a Detroit residential broker, there is a one-year supply of condos for sale in the Downtown Detroit market. According to the broker, 4-6 months is considered a “balanced” market, so the existing one-year supply is a clear buyer’s market. It appears the rush to develop new condos in Detroit to meet rising demand happened too quickly, with a glut now on the market. There are successes, to be sure, but the pricing of some condos appears to be aggressive for the market.

Allen Park’s “The Hill” Welcomes New Aldi Store

January 25, 2021/in SE Michigan /by Tracy Willis

Allen Park’s Fairlane Green Shopping Center, otherwise known as “The Hill”, is slated for an Aldi store. The exact date of the renovations or start of the project is unknown at this time. The new Aldi store will take the place of the Staples Office Supply store. In addition, Crafty Crab restaurant, Aspen Dental, and Dunkin’ will join the shopping center. Grocery is one of the more resilient retail categories.

Postponed Detroit Projects Dependent on Pandemic Effects

January 25, 2021/in Detroit /by Tracy Willis

The pandemic brought Detroit area projects to a screeching halt. By summer, many of them had resumed. The outcome of these projects, ranging from apartment developments to a small-format Meijer, hinges on how many office workers return to Detroit, how soon sports fans will feel safe at sporting events, if restaurants and hotels will fill up again, and if Detroit-area lofts will remain as desirable as they were pre-pandemic.

Weekly Brief – January 18, 2021

January 18, 2021/1 Comment/in Weekly Brief /by Dave Nykanen

This week I want to focus the discussion on cannabis-related property. This has been one of the more interesting market segments the past few years, as the laws and regulations surrounding the use have evolved quickly.

The use of a property for a cannabis-related purpose is subject to significant obstacles. First, the property must be permitted for cannabis use under local zoning. Second, the property must be appropriately licensed under Michigan law. A property may be licensed for the sale of only medical marijuana, or for recreational marijuana. There are also licensing issues for individuals who own or work for the businesses operating at the cannabis business.

In order to complete the purchase or sale of a cannabis-related property, there are also private-market concerns. Most financial institutions will not loan against a cannabis-related property. This remains true notwithstanding the fact that marijuana is “legal” under state law. Marijuana remains illegal under federal law. Many financial institutions are concerned that lending on cannabis-related properties might run afoul of federal banking regulators. There are, however, some financial institutions that are dipping toes into the water on this issue.

Another private-market concern is that there is currently only one national title insurance underwriter (Westcor Land Title Insurance Company) that will issue title insurance on cannabis-related uses. As most lenders will require a loan policy of title insurance, this poses another limitation on these transactions. (Shameless plug: Midwest Title issues title insurance for, among others, Westcor).

The federal regulatory and legal issues may change under the Biden Administration. Actually, the biggest chance for federal changes arose from the results of the Georgia Senate runoffs. Because those elections resulted in a shift of control from the Republicans to the Democrats in the Senate, there will be a change in the Chairperson of the Senate Banking, Housing, and Urban Affairs Committee. The current GOP Chairperson, Sen. Mike Crapo of Idaho, has been firmly opposed to the SAFE Banking Act, which would allow federally-chartered financial institutions to handle cannabis-related funds. With a change in control of the Senate, Sen. Crapo will no longer be Chairperson, and there appears to be a greater likelihood of passage of the SAFE Banking Act.

If cannabis-related uses are fully authorized at the state and federal level, there could be a flood of new cannabis-related market participants. We are already starting to see the “professionalization” of cannabis businesses, as national companies move into the segment. However, the zoning and state licensing requirements will still limit the available properties for cannabis use. This may have the impact of driving prices up for cannabis-related property further, as the demand may increase.

First Cannabis Retail Location Opening In West Michigan

January 18, 2021/in Grand Rapids /by Tracy Willis

The Gage Cannabis Company opened the doors to the first provisioning center in West Michigan, located in Grand Rapid. Gage prides itself on three things: Cannabis, culture, and community. The retailer is already working on the community focus by providing vouchers to area small businesses for their patients. The company is on the move with a goal to operate over 20 locations by the end of 2021.

Industrial Development Plan in Western Oakland County Heads to City Council for Review

January 18, 2021/in SE Michigan /by Tracy Willis

The former Ford Assembly Plant on Wixom Road is the site of a a new redevelopment plan proposed by Flint Development, a Kansas City, Missouri-based company. The plan proposes to construct over 1.5 million square feet of warehouse and industrial space north of the current retail development on the site and promises to create 750 jobs in the first phase. Overall, it’s a $120 million investment.

Northern Michigan Small Retail Businesses Pivot in Pandemic Times

January 18, 2021/in Northern Michigan /by Tracy Willis

Two Boyne City small businesses are vacating their store fronts. However, it’s not goodbye. The Outdoor Beerdsman, a retail store, is moving to online sales. The difficulty in securing available workers has pushed the owner toward a virtual storefront that will include a sister company. The second business, Long Road Distillers, is relocating to Charlevoix and is awaiting its liquor license.

Amazon to Open Sorting Center in Plymouth