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432-Unit High Rise Planned For Grand Rapids

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Spire Investment Properties and Krika Development are proposing 432 market-rate apartments at the southern edge of downtown Grand Rapids. The McConnell is a 10-story, 336,835-square-foot development that covers three lots. The two out-of-state investors hope to build a food hall, microbrewery or distillery, an outdoor lot for food trucks and shipping container-retail  stores. The development would spread over three parcels. They have not disclosed the project’s budget. The developers are seeking special land-use approval from the Grand Rapids Planning Commission to sell alcohol, food and retail at the site.

 

Mercedes-Benz Financial Services Celebrates New Headquarters

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Mercedes-Benz Financial Services USA (MBFS) has opened its new corporate campus in Farmington Hills. The headquarters are designed to support a new hybrid workforce model. The 3-story headquarters building is located on 35 acres at 35555 W. 12 Mile Road. The new workspaces encompasses 200,000 square feet. Olympia Development of Michigan, KIRCO MANIX and Gensler Detroit partnered with MBFS on the project. Mercedes-Benz Financial Services USA provides brand-specific financing and leasing products and insurance services.

 

Demolition of Historic Detroit Theater Makes Way for Parking Lot

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The Bagley Development Group has begun demolishing the historic United Artists Theater building in downtown Detroit. They are converting the attached office tower into 148 apartments. The space created by the theater’s demolition will provide parking to residential tenants. Detroit-based construction manager L.S. Brinker has partnered with Lansing-based construction manager Christman Co. to redevelop the office tower. Demolition of the theater is expected to take about 4 to 6 weeks. Homrich Inc. is the contractor on the building.

 

Meridian Healthcare To Shrink Its Detroit Office Footprint

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Meridian Health is subleasing multiple spaces in downtown Detroit, shrinking its office footprint. 266,000 square feet are up for grabs in One Campus Martius building, and almost 40,000 square feet are available in the One Kennedy Square building. Meridian Health is the state’s largest Medicaid health plan. Meridian’s parent company is reducing its leased space footprint nationwide by 65 percent, which could save them up to $200 million per year. The One Campus Martius sublease would be through the end of 2024. One Campus Martius is owned by Bedrock LLC and Meridian; One Kennedy Square is owned by Redico LLC.

 

 

Jefferson Chalmsers’ Apartment Building Revived

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The renovated Marlborough Apartments in the Jefferson Chalmers neighborhood have opened. Jefferson East Inc. and its subsidiary, East Jefferson Development Corporation are responsible for the renovation of the 1927 building that houses. 8 unit apartments. They are also renovating another circa 1929 property on the north side of Jefferson. It will have 15 units. According to Mayor Mike Duggan, the second property has stood vacant for 50 years.  The two properties will reserve a total of 13 units for tenants with incomes between 50% and 60% of the area median income. The two and three bedroom units will range from $848 to $914 a month.

 

 

Pilot Program Pays Storefront Owners to Renovate Upstairs Apartments

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Southwest Detroit Business Association’s pilot program grants $8,500 per unit to renovate apartments above commercial spaces. In an effort to expand the number of affordable homes and apartments for city residents, empty and derelict second-floor units are an untapped market. According to Elaina Peterson, a program analyst on the policy and implementation team for the city’s housing and revitalization department, there could be as many as 12,000 unoccupied apartments above stores and restaurants in Detroit. If they were updated and made livable, they would make a huge impact on the number of affordable apartments as rents and sale prices continue to increase. The program is one part of a $203 million housing plan that intends to create new rental housing, help renters to become homeowners, and improve the quality of existing rental units.

 

 

Rent And Occupancy Rates Are on The Rise in Metro Detroit

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Apartments are a hot commodity in Detroit with supply falling short of demand. Rent costs and occupancy rates in the metro area are increasing. According to the Detroit Multifamily Real Estate Figures, occupancy rate is at 96 percent for multifamily residences in Detroit.  The asking rental rate per square foot has increased from $1.64 to $1.72 over the last six quarters. Supply and demand issues, as well as new developments and redevelopment of existing property, are impacting rental rates. Suburban rental rates follow a similar pattern.

 

The Office Market Continues to Limp Post Pandemic

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More than two years after the start of the COVID-19 pandemic, the office market is still reeling. Sublet office space availability is at a 10-year high. Over 2.37 million square feet is available in the five-county area. Office tenants are subletting unused space. If they are unable to sublease, they give back the additional space to landlords, usually in an early lease restructure or relocation to another place. According to the president of the Advocate Commercial Real Estate Advisors LLC brokerage house, the amount of sublease space on the market will increase in the next 3 to 6 months. In addition, leasing activity is slower than usual, and no new construction of office space occurred in the second quarter.