Downtown Detroit gearing up for $5.4B in development
At least 70 real estate projects — totaling $5.4 billion — are either underway or in the planning stages for Detroit during the next three years, according to Crain's Detroit Business, citing a new CBRE report.
The global real estate firm said that $4.23 billion of that total is dedicated to mixed-use development and redevelopment, while multifamily projects (6,091 units) should total $892.9 million. Detroit will also see the construction of 2.1 million square feet of office space ($202.6 million), 1,196 hotel rooms ($100 million) and $4 million in retail.
Development in downtown Detroit is being driven by a shortage of large, move-in-ready office space and multifamily housing, which is at 5% availability. The multifamily segment, especially, is coming under pressure from workers who want to live near where they work.
After the decline of the automobile industry left Detroit to revamp its economy, the Midwest metro is now seeing a revitalization. Much of the development in downtown Detroit has been spurred by the Detroit Red Wings' Little Caesars Arena. Construction is already underway on the Illitch family's new $863 million project, which anchors the surrounding 50-block District Detroit mixed-use development. The Ilitch's real estate arm, Olympia Development, has reportedly invested more than $2 billion between the arena and District Detroit's new housing, office space and retail.
The possibility of a new Major League Soccer stadium, too, is driving Detroit's upturn in development. Quicken Loans founder Dan Gilbert wants to build a $1 billion MLS stadium and an adjoining mixed-use complex on the site of a county jail project in downtown Detroit. The project had resumed construction after being stalled due to cost overruns, but officials halted work once again after receiving Gilbert's offer.
The billionaire has proposed building a new $520 million county criminal justice center on nearby piece of property in exchange for the current jail site. He guaranteed that the county's investment would be limited to $380 million, though that offer outstrips the initial $300 million maximum outlined in an earlier offer. Gilbert hasn't secured that deal yet, as the county is still considering a proposal from the current jail contractor to stay on course with construction at the existing site.
Gilbert has already invested in a 1.2-million-square-foot, $700 million mixed-use tower on the site of a historic downtown department store. Construction is scheduled to begin later this year, and, when complete, it could become Detroit's tallest building.
- Crain's Detroit Business Report: $5.4 billion in construction set in, around downtown Detroit
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