David Whitney Building to become Hotel and Apartments

[mikeg19]

The thing I'm wondering is what exactly warrants another hotel in downtown? From many comments on this board, it would leave you to believe that the Detroit hotel market is saturated enough for the time being. What projections are investors looking at to think it's feasible to add more hotel rooms to downtown when in the past few years we've added over a thousand? It seems like more moderate income apartments would be in demand with the thousands of people being brought into downtown from BCBS, Gilbert, etc. Obviously not all of those people will move into downtown as many probably own homes in the suburbs, but more affordable renting options or condos in the CBD seems like a better investment than another hotel. Would someone with more knowledge on this chime in?

[iheartthed]

The thing I'm wondering is what exactly warrants another hotel in downtown? From many comments on this board, it would leave you to believe that the Detroit hotel market is saturated enough for the time being. What projections are investors looking at to think it's feasible to add more hotel rooms to downtown when in the past few years we've added over a thousand? It seems like more moderate income apartments would be in demand with the thousands of people being brought into downtown from BCBS, Gilbert, etc. Obviously not all of those people will move into downtown as many probably own homes in the suburbs, but more affordable renting options or condos in the CBD seems like a better investment than another hotel. Would someone with more knowledge on this chime in?

I don't have the link, but the News published an article recently saying that the hotel market in Detroit has rebounded significantly and downtown Detroit is leading the way. But occupancy rates still aren't back at the 70% mark for general profitability [[I believe the current rate for downtown is somewhere in the mid-60s).

[Richard]

Because of the recent reduction in brown-field and other credits it will be hard to put affordable housing in downtown unless you pull in fed money and make a percentage low income but after rehab costs you need to keep rents high to recoup investment.

Office space currently ranging from $7 per sqft or the base starting point on the towers that have recently been rehabbed is at $15 per sqft and there are allot out there I guess if one could mix residential with office and hotel odds are the chance of survival are greater until the demand grows for anyone of those.