Coming Soon! New Midtown Office Building, south of MLK

[hortonz]

I always knew the city was in better shape to take advantage of the coming global economic contraction than its' critics liked to admit. For all of its' problems, Detroit will weather the economic and climate changes of the 21st century a lot better than cities that have grown too big to weather the coming economic contraction like Toronto, New York and Lost Angeles. Those cities will be in far worse shape than Detroit is today by the middle of this century.

[Danny]

The poor and low-income families in that area once property values increase.

[tkelly1986]

The poor and low-income families in that area once property values increase.

This is the way a market economy works. When demand increases, so do prices until supply finds an equilibrium. When supply is greater than demand prices drop to the equilibrium [[see Detroit housing values over the past 40 years).

So people get priced out of a neighborhood; are you suggesting that they have a "right" to place? Should the folks who lived in Manhattan 50 years ago, but can no longer afford to, complain that they have a "right" to SoHo or Greenwich Village? What about the immigrants in Chicago that got priced out of their neighborhoods or the Native Americans before them?

In every neighborhood there was somebody who came before. The demographics of Midtown are different today than they were 50 years ago and will be different in 50 years. Some people see it as progress, others do not. But regardless its how our system works.

[mwilbert]

So people get priced out of a neighborhood; are you suggesting that they have a "right" to place? Should the folks who lived in Manhattan 50 years ago, but can no longer afford to, complain that they have a "right" to SoHo or Greenwich Village? What about the immigrants in Chicago that got priced out of their neighborhoods or the Native Americans before them?

Well of course in Greenwich Village, and to a lesser extent SoHo, there is rent control/rent stabilization, which does give people at least some right to their existing housing.

I don't think renters have a "right" to their housing in general, but it isn't silly to take their displacement into account as a cost [[or potentially as a benefit--you can certainly make a case that Detroit has too many poor people now and it would be better if some of them were dispersed.) when thinking about things like gentrification. I think, on net, given the situation in Detroit, gentrification would generally end up being positive even for the poorer residents of the city, but that doesn't mean it couldn't be bad for a particular subset, nor that the city shouldn't take that into consideration when making housing policy.

Of course, that would require a city that was capable of making coherent policy decisions about anything, which as far as I can tell excludes Detroit.

[hortonz]

The poor and low-income families in that area once property values increase.

If you look at the history of American cities, there have always been neighborhoods that attracted different income and ethnic groups. There was housing for the wealthy, the middle class and the poor and those neighborhoods have changed character over time as one group left and another moved in. Gentrification is not necessarily a bad thing and it's revitalized a lot of dying neighborhoods. Take the case of Roxbury in Boston. In the 1980's it's residents wanted to leave the larger city of Boston and rename it Mandela in an effort to "save" it from ruin. Today that area is a thriving multi-cultural polyglot thanks to an influx of West Indians who revitalized the neighborhood in the 1990's

[stinkytofu]

http://detroit.curbed.com/archives/2...apartments.php Was wondering what happened to this development...turns out it's been flipped from offices to apartments. Hope it all actually comes together...believe it when I see it.

[stinkytofu]

...ahhhh...so frustrating I can not push enter to create new paragraphs on here...maybe it's my computer...but super annoying...

[emu steve]

...ahhhh...so frustrating I can not push enter to create new paragraphs on here...maybe it's my computer...but super annoying...

We've discussed this before. The problem is most likely IE 11.

The solution is in: Tools, Compatibility Views Settings [[or use a different browser).

[Islandman]

https://www.google.com/chrome/browser/

[DetroitPlanner]

http://detroit.curbed.com/archives/2...apartments.php Was wondering what happened to this development...turns out it's been flipped from offices to apartments. Hope it all actually comes together...believe it when I see it.

Something is fishy. $485,000 for each apartment unit development costs seems a bit high.

[stinkytofu]

We've discussed this before. The problem is most likely IE 11.

The solution is in: Tools, Compatibility Views Settings [[or use a different browser).

I'm an idiot - thanks for the reminder. Completely forget to use Chrome from time to time...

[DetroiterOnTheWestCoast]

But....but....but....I thought demand for housing in Midtown was all an illusion, and everyone just wants to live in Birmingham.

I am glad to see it being switched out to housing. Right now, I see getting more residents as of the highest importance.

[motz]

But....but....but....I thought demand for housing in Midtown was all an illusion, and everyone just wants to live in Birmingham.

Paging Bham1982, paging Bham1982. We need someone to post vague assertions that no one wants to live in Detroit and the Other Suburbs are so magical and whimsical and amazing!!!

[animatedmartian]

Something is fishy. $485,000 for each apartment unit development costs seems a bit high.

That's improper oversimplified math.

Assuming the overall building size is the same [[75,000 square feet), then having 25,000 square feet of retail [[originally was 10,000) means there's 50,000 left over for apartments [[originally was 65,000 for offices). That comes out to about 735 sq ft per apartment.

If the market rent is $2/sq ft, then average rent within this building should roughly be around $1,470 per apartment [[actual rents will vary depending on the actual size of the individual apartments, but the average should be around that number nonetheless). That's on par with other downtown and midtown rents as of right now.

[ABetterDetroit]

33 Mill in brand spanking new apartments and street level retail on the 3.3 mile? To early to call but it could mean Ching Ching goes the trolley right into Detroits tax base.

[DetroitPlanner]

That's improper oversimplified math.

Assuming the overall building size is the same [[75,000 square feet), then having 25,000 square feet of retail [[originally was 10,000) means there's 50,000 left over for apartments [[originally was 65,000 for offices). That comes out to about 735 sq ft per apartment.

If the market rent is $2/sq ft, then average rent within this building should roughly be around $1,470 per apartment [[actual rents will vary depending on the actual size of the individual apartments, but the average should be around that number nonetheless). That's on par with other downtown and midtown rents as of right now.

For there to be 25,000 sq ft of retail and 75,000 sq ft of apartments that means a 4 story building. what is shown is at least a 5 maybe 6 story.

The apartments would be a lot smaller. Yeah you deducted for retail but what about public space like hallways, the residential lobby, possibly laundry or other amenities such as exercise facilities? By your estimation then each property would generate a lot less in rent.

So they start making a profit in what? about 20 years? Just in time for the building to need major maintenance.

[mwilbert]

For there to be 25,000 sq ft of retail and 75,000 sq ft of apartments that means a 4 story building. what is shown is at least a 5 maybe 6 story.

The apartments would be a lot smaller. Yeah you deducted for retail but what about public space like hallways, the residential lobby, possibly laundry or other amenities such as exercise facilities? By your estimation then each property would generate a lot less in rent.

So they start making a profit in what? about 20 years? Just in time for the building to need major maintenance.

Not saying this makes a gigantic difference in the economics, but it looks like they are eligible for about five million dollars in TIF money.

[animatedmartian]

For there to be 25,000 sq ft of retail and 75,000 sq ft of apartments that means a 4 story building. what is shown is at least a 5 maybe 6 story.

It's 50,000 sq ft for the non-retail portion of the building. The total size for the whole building is 75,000.

What is shown is a building that has a two-floor lobby on the north section of the building which means the 2nd floor is an odd size. It's still 4 and a half floors of non-retail plus the first floor retail. And since there's no half floor on the roof of the building, then it can be assumed they added space until the building was a perfect square.

The apartments would be a lot smaller. Yeah you deducted for retail but what about public space like hallways, the residential lobby, possibly laundry or other amenities such as exercise facilities? By your estimation then each property would generate a lot less in rent.

The rents would be slightly higher than my estimation then but still at market rate [[assuming market rate is $2/sf).

So they start making a profit in what? about 20 years? Just in time for the building to need major maintenance.

A couple different things could and will likely happen; 1) Rents continue to go up which means they make a profit quicker than 20 years or whatever, or 2) The condo market gets strong enough to the point that it'd be more profitable to turn the apartments into condos. Either way, a good portion of the owners will get their income from retail even with everything else.

[DetroitPlanner]

Regardless, from a financial standpoint it makes little sense. The numbers just don't work based upon what has been presented.

[bailey]

Paging Bham1982, paging Bham1982. We need someone to post vague assertions that no one wants to live in Detroit and the Other Suburbs are so magical and whimsical and amazing!!!

How much do taxpayers need to subsidize this build vs. a similar one in Bham?

I'm not being snarky, I'm asking.

[Spartan]

It's 50,000 sq ft for the non-retail portion of the building. The total size for the whole building is 75,000.

What is shown is a building that has a two-floor lobby on the north section of the building which means the 2nd floor is an odd size. It's still 4 and a half floors of non-retail plus the first floor retail. And since there's no half floor on the roof of the building, then it can be assumed they added space until the building was a perfect square.


The rents would be slightly higher than my estimation then but still at market rate [[assuming market rate is $2/sf).

A couple different things could and will likely happen; 1) Rents continue to go up which means they make a profit quicker than 20 years or whatever, or 2) The condo market gets strong enough to the point that it'd be more profitable to turn the apartments into condos. Either way, a good portion of the owners will get their income from retail even with everything else.

3) The commercial space will bring in much more than $2/sq ft, don't you think? This is where the real profit in owning a building can be, not the residential.

[animatedmartian]

Regardless, from a financial standpoint it makes little sense. The numbers just don't work based upon what has been presented.

What was presented was an office building. What is now going to be built is a residential building that they have only provided the numbers for. Like I said earlier, my assumption was the building was the same size, however, that still can mean they've changed up the design to look completely different which obviously has different costs than an office building.