He keeps up his shopping spree:
Link to Freep Article
1953
He keeps up his shopping spree:
Link to Freep Article
1953
I am pretty sure that he will own every building downtown except the RenCen soon. Hello Delta City.
The Dime Building needs no work done to it... it was gloriously restored a few years back, and received several preservation awards.
If he's buying occupied and profitable buildings, that should help him pay for renovations or attracting new tenants to his other buildings.
I don't get the feeling he's in the real estate business to make money either. He is in it for Detroit. As long as he's not losing gobs of cash, i.e. breaking even, look for him to continue this trend. The man is very well connected, and obviously respected. He has that ability to motivate people to move down there. He also has that ability to do what GM has been doing and motivate companies that Quicken does business with to move downtown or risk losing that business. It is getting pretty interesting.
I think for this very reason things are going to get pretty interesting. Who knows what his final plans are for these buildings or who he has been talking with in regards to mobilization of business.
i don't think dan gilbert got where he is today by losing money. he must see a way to make money from these deals. which is a good sign; here is a guy who ran a mortgage company that survived the mortgage meltdown. seems like he's the kind of guy who can see around corners while the rest of us are bumping into walls ...
Don't kid yourself he is motivated by money and knows the market better than just about anyone else out there. He has started several mortage companies. He is probably seeing an opportunity no one else is seeing right now and is marketing it.
According to Dan Duggan over at Crain's, he has a blurb about the purchase as well, the building is 36% vacant. It is being purchased from Wells Fargo, foreclosed upon a few years ago. But at only $15m, this has to be nearly profitable as it is now, not to mention when Gilbert fills it up. It is obvious he is finding deals on buildings that are in good enough condition to either move into, make a buildout relatively inexpensive [[Madison), or only need minimal work [[First National). It's unfortunate the likes of the United Artists and Book likely don't fit the bill.
Thanks for the props esp1986. Here's the link to my blog detailing the deal. And, my own analysis, is that Gilbert will be second only to General Motors in terms of non-government landlords in Detroit.According to Dan Duggan over at Crain's, he has a blurb about the purchase as well, the building is 36% vacant. It is being purchased from Wells Fargo, foreclosed upon a few years ago. But at only $15m, this has to be nearly profitable as it is now, not to mention when Gilbert fills it up. It is obvious he is finding deals on buildings that are in good enough condition to either move into, make a buildout relatively inexpensive [[Madison), or only need minimal work [[First National). It's unfortunate the likes of the United Artists and Book likely don't fit the bill.
http://www.crainsdetroit.com/article...other-building
36% vacancy is higher than I thought. Thanks for the info.
"When Gilbert fills it up."
How can we assume he can do what any number of smart people have failed to do before him? I want to see him work his magic, but I have trouble seeing how one person can turn around a regional market.
Because he is the bank and able to take risks that the bank would not allow others to, worse case scenario its a write off,you can buy an empty building at as is value and put tenants into it and have an instant value increase,cash is king if you have the cash to buy now and hold even if it is break even the way he is doing it he can control the future market long term. Everything has its positives and negatives.
My biggest fear is that he's biting off more than he can chew...too big, too fast. If his "empire" shall fall, so goes Detroit...I don't like putting so many eggs in one basket.
Don't get me wrong, I love the passion he has..but I do have my concerns.
Well maybe the 15m price tag has something to do with it. He doesnt seem to be overextending.
The good thing is that he is generating interest on properties in the downtown. There are bound to be investors from abroad who can take this further. Imagine a Dubai chieftain making a part of the cbd his pet project. A mall in downtown and an amusement park on part of the eastern riverfront past the RenCen.
[QUOTE=. A mall in downtown and an amusement park on part of the eastern riverfront past the RenCen.[/QUOTE]
Although, the greater downtwon is making some progress with people living there especially Midtown; we still need much more measurable and quantifiable
younger, educated dwellers with disposable income before a mall comes in. We need shops with walking accessibility, not an enclosed mall.
The more commercial movement is bound to create the demand for more residential however!!
Is it really this easy to buy Downtown Detroit property? Where have all the other Detroit philantrophists/real estate moguls been?
It takes funding,the Gov diminishes brownfield and tax credits which in turn lowers the values and eliminates the middle man. Why fund others when you can corner the market and keep the profits for yourself and design the future how you choose.
No headlines saying Quicken Loans Approved Funding for XYZ company for the purchase and rehabilitation for [[insert any building here).
Well, it is easy for Gilbert. Remember he was slick enough to get $200+ million of taxpayer incentives to move his company from Livonia. So he may not be spending "his" money, but rather the incentives that he got. Frankly paying $40 per square foot sounds a little rich to me.
Not every "real estate mogul" is as polictically connected as he is and can get such a gift. Without the discount from the taxpayers the math [[rate of return) does not work for them. They have to pay retail, while Gilbert get to pay wholesale [[after incentives).
Now if the citizenry want to start throwing around hundreds of millions of dollars you will see a lot more redevelopment. You won't necessarily see more tenants, but you will see more redevelopment.
Now about the philanthropists. By that you must mean the guy [[Waad Nadhir and his bank - Wells Fargo) that paid $40 million for the Dime in 2003 when times were good. Today the building is selling for a rumored $15 million. So Nadhir and Wells Fargo "gifted" about $25 million to Detroit. Now that is a philanthropist.
If Whole Foods decides to locate here, it WILL be the first domino. Mark my words.Although, the greater downtwon is making some progress with people living there especially Midtown; we still need much more measurable and quantifiable
younger, educated dwellers with disposable income before a mall comes in. We need shops with walking accessibility, not an enclosed mall.
The more commercial movement is bound to create the demand for more residential however!!
Eh... as an East Riverfront resident, I am suddenly NIMBY about an amusement park. Family fun center in the Globe Trading Company, sure. But Chene Park generates enough traffic in the area. I can't imagine what living next door to Six Flags Over Detroit would be like.
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