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Michigan real estate news weekly brief

Weekly Brief – March 22

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For your consideration this week:
  1. The death of malls, which I have been discussing all year, has another casualty this week. A receiver will be taking over Partridge Creek Mall in Macomb County. A sale by its lender is likley. The Mall has no anchors and a rotating cast of dining tenants. As discussed previously (perhaps too much), malls are in a death spiral initially caused by online retail but accelerated by the COVID-19 pandemic.
  2. The pandemic claims a major hospitality casualty in Detroit. The Westin Book Cadillac, once the image of Detroit’s resurgence, is headed for foreclosure due to a lack of customers. I expect we may see more hotel failures as we continue the path to normalcy. We recently saw plans for a brand new hotel converting to senior living.
  3. The reinvigoration of Detroit’s neighborhoods continues with a plan for the East Warren/Cadieux area being unveiled. Like many plans in Detroit, investment from the public sector and quasi-public sector anchors the plan. We will know Detroit’s neighborhoods are truly back when private sector investment drives redevelopment.

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.

Detroit Transit Center’s Placement Upsets Preservationists

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Plans for a new $7 million Detroit transit center are moving forward despite an outcry from preservationist groups. The new bus hub would require the demolition of two historic state fairground structures: The State Fair Riding Coliseum and the Dairy Cattle Building. The city agreed to conduct a three month study on the feasibility of saving them, but preservationist argue that the process hasn’t been prioritized and reuse hasn’t seriously been considered.

Detroit Demolition and Renovation Begins Soon

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With the passing of November’s Prop N, which approved the sale of $250 million bonds, demolishing and renovating is set to begin (again) in Detroit. The project starts with $175 million in bonds, and the city plans to sell another $75 million next year. 8,000 homes blighted homes will be destroyed, and another 8,000 salvageable homes will be renovated. The seven companies taking part in the project are headquartered in Detroit. Five of those companies are black-owned.

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

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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.

Postponed Detroit Projects Dependent on Pandemic Effects

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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.