Pair of Detroit developments canceled as The Platform lists properties for sale

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On Friday, Detroit-based brokerage firm O'Connor Real Estate listed four development sites totaling nearly 9.5 acres for sale for undisclosed asking prices.

That signals the end for Cummings' Detroit-based The Platform LLC's plans to redevelop the 4.34-acre former Joe Muer restaurant site between Gratiot Avenue and St. Aubin next to the Dequindre Cut, as well as a second phase of the Baltimore Station project in the Milwaukee Junction neighborhood at East Baltimore and John R Road on nearly 1 acre of land.

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In addition to those two properties hitting the market, O'Connor has also listed the 1.1-acre site of a former Big Boy restaurant at East Jefferson Avenue and East Grand Boulevard in the Islandview neighborhood across from Belle Isle. The site, which had been contemplated for a new development, had previously been listed in November 2021.The fourth site is 3.1 acres sandwiched between the new apartment building under construction on the former Joe Louis Arena property and Riverfront Towers on the west Detroit riverfront. There have been no recent development plans for the site.

The Friday land listings also follow the listing by Bethesda, Md.-based Walker & Dunlop Inc. earlier this year of The Platform's recently constructed 231-unit apartment building in the New Center area. The $60 million Boulevard apartment building at West Grand Boulevard and Third Avenue next to the Fisher Building opened in 2019. Combined, the listings represent the latest possible major shakeup in the company's real estate portfolio, which it began amassing starting in 2015.

"We've completed a strategic review of our portfolio and decided to sell several properties, which allows us to focus on our core assets with the greatest potential," Clarke Lewis, the new president of The Platform, said in a statement. An interview request was declined.Three of the four sites listed at varying points had recent mixed-use housing projects envisioned, with the exception of the west riverfront site.The Platform purchased the former Joe Muer site in 2017 and planned a multifamily and retail/commercial mixed-use development, but work never began.

The second phase of the Baltimore Station project started construction and then halted in the summer 2019 due to a contractor switch. Work never restarted, and the structural steel installed at the site was removed two years later.

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https://www.crainsdetroit.com/real-e...-property-sale

If you not being creative to your investors or the budget about your upcoming project, the deal is off.

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Originally Posted by Danny

If you not being creative to your investors or the budget about your upcoming project, the deal is off.

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Been watching too much court tv? Pretty sure that's Trump's defense. "I was just being creative to my investors."

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Originally Posted by 401don

Been watching too much court tv? Pretty sure that's Trump's defense. "I was just being creative to my investors."

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No need to get political.

And it's ok to under-value properties, especially when all parties know that your guestimation carries no weight.

What Danny was suggesting that perhaps if a developer actually uses real numbers, and isn't sucking huge amounts of welfare [like seemingly ALL Detroit developments], then the project doesn't move forward.

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Originally Posted by Rocket

No need to get political.

And it's ok to under-value properties, especially when all parties know that your guestimation carries no weight.

What Danny was suggesting that perhaps if a developer actually uses real numbers, and isn't sucking huge amounts of welfare [like seemingly ALL Detroit developments], then the project doesn't move forward.

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If was a joke and a damn good one if I say so myself.

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Originally Posted by 401don

If was a joke and a damn good one if I say so myself.

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Sorry. Missed it.

I love dry humor, but it's often hard to pick up on in type. :)

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Originally Posted by Rocket

No need to get political.

And it's ok to under-value properties, especially when all parties know that your guestimation carries no weight.

What Danny was suggesting that perhaps if a developer actually uses real numbers, and isn't sucking huge amounts of welfare [like seemingly ALL Detroit developments], then the project doesn't move forward.

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Thats the catch 22 in Detroit,because everything is being subsidized as affordable housing in a city that does not have an affordable housing problem,its artificially driving down the rates.

When one looks at incentives for business locating there,is it better to incentivize businesses that pay a higher wage so you do not have to incentivize low income housing?

The problem is there is a housing shortage in many cities and the broadsword approach of dealing with that on the federal level is hurting cities like Detroit,the free money is there so they get it,but it is time limited,so by the time the city grows,those programs will have expired and then you will have a affordable housing shortage but in the meantime it is stunting real growth.

Those companies that purchased property years ago based on potential growth could have never predicted the cost increases that have happened in the last couple of years but on the same account as a city it’s probably not best practice to make everything an affordable project across the board,short term or long term.

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Originally Posted by Richard

Thats the catch 22 in Detroit,because everything is being subsidized as affordable housing in a city that does not have an affordable housing problem,its artificially driving down the rates.

When one looks at incentives for business locating there,is it better to incentivize businesses that pay a higher wage so you do not have to incentivize low income housing?

The problem is there is a housing shortage in many cities and the broadsword approach of dealing with that on the federal level is hurting cities like Detroit,the free money is there so they get it,but it is time limited,so by the time the city grows,those programs will have expired and then you will have a affordable housing shortage but in the meantime it is stunting real growth.

Those companies that purchased property years ago based on potential growth could have never predicted the cost increases that have happened in the last couple of years but on the same account as a city it’s probably not best practice to make everything an affordable project across the board,short term or long term.

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Many Detroiters think that affordable housing is the same as low income housing.. Politicians know it and uses "I am going to promise affordable housing in prime areas" kick just for votes. The Martin Luther King apartments near downtown Detroit is considered low income housing. Realistically one can't take many of those who live in the Kings project and place them on a couple of floors of the Hudson's Block highrise or any other new glistening development where middle 6o upper income tenants live. That's the double talk that some elected officials are pushing to the ignorant masses

Affordable housing is defined as 30% of one’s income before taxes,low income is those that are in 80% lower wages than the average medium.

What is screwing it up is the consumer expectations,in the 50s the average SQFT of a starter home was 900 - 1100 sqft,today it is 2500.

First time home buyer’s are also looking for their dream home as their first purchase and if they cannot afford it they are priced out of the market.

Even with apartments,renters demand fit and finish that rivals high end homes which in turn drives the costs up.

Home buyers back in the day also struggled with housing and even raised families along the way,they were just more in tune as to the differences between wants and needs.

I'm guessing this has a lot to do with Platform's exposure in the WeWork bankruptcy. I read somewhere they are the 3rd or 4th largest creditor. I could be wrong about how high on the list they are, but I know they have a very large exposure and will probably take a hit along with many others in that bankruptcy proceeding.

Large scale multi family is down 30%,office space occupancy rates are 50% country wide, combined with higher interest rates.

Blackrock and others funded WEWORK which is described as a religious based cult with a business plan that mimicked ENRON,they were marketing an idea and the amount of commercial office space that they tied up is going to kill the market now,unless Blackrock steps in and props it up.

Softbank who owns it is a Japanese technology group and holds 70% of the company.

Considering the amount of pension funds that has funded most of this facade it’s really only going to hurt those who have 401k and pensions,it’s just moving paper around for everybody else because the company was really never viable to begin with.

They want to swap equity for credit,but really the only thing they have are leases which their bankruptcy devalued from the start,so Blackrock,King street capital and Brigade Capital who is also invested in the buildings may kick in to stabilize the market.

So just because these guys are pulling out of the deal locally,it does not necessarily meen it becomes a dead deal,if it was viable somebody with deeper pockets will pick it up because of the discount.

It’s just another example of because we are heading into a tight market,companies are shedding extra stuff so they can survive long term while riding out the storm.

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Originally Posted by Richard

office space occupancy rates are 50% country wide

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Uh, source on this? Crain's just reported office vacancy is 13.3% nationwide.

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Originally Posted by gratiotfaced

Uh, source on this? Crain's just reported office vacancy is 13.3% nationwide.

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Office space, meaning unleased, is probably 13%. 50% would refer to the number of workers downtown on any given day, although it's probably a little higher now.

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Originally Posted by gratiotfaced

Uh, source on this? Crain's just reported office vacancy is 13.3% nationwide.

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Kastle Systems, which uses keycard, fob, and app access data to determine weekly office tenant occupancy rates for 10 U.S. metropolitan areas, found that as of the week of March 1, 2023 [[the most recent data available), the 10-metro average occupancy rate was 50.1%.
Austin had the highest occupancy at 68.1%, while San Jose had the lowest at 40.6%. Chicago and the three Texas metros—Austin, Dallas, and Houston—all posted occupancy rates above 50%. The remainder of the cities had occupancy rates between 40% and 50%.

https://www.reit.com/news/blog/marke...0at%2040.6%25.

There is a difference where occupancy rates are determined by existing leases because a company may be locked into that lease,but as that lease expires if the space is not being utilized they will not renew it.

I have a customer that has cafeterias in a couple of large office buildings,mostly fed related government offices,used to be 2-300 cars filling the parking lots but now lucky to see 20 .

Meanwhile the development on Mack and Woodward where Target will be connected to still hasn't started

I’m especially disappointed about the Big Boy site. Developing that parcel would give a nice boost to E. Grand Blvd.

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Originally Posted by DetroiterOnTheWestCoast

I’m especially disappointed about the Big Boy site. Developing that parcel would give a nice boost to E. Grand Blvd.

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I always thought that the interchange would make for a nice roundabout/traffic circle on the scale of NYC Columbus Circle. Hell they could even move the Hurlbut Memorial Gate to its' center... and require some of the parcels north of Jefferson, like the former Big Boy site.

https://www.google.com/search?sca_es...ih=571&dpr=1.5