China's Newest City: We Call it 'Detroit'

**detroitpride313** · December-09-13, 11:58 AM

Thoughts on this article about Chinese investment in Detroit?

http://www.forbes.com/sites/gordonch...ll-it-detroit/

I definitely don't agree with this statement from the article:

“I’ve been in the Detroit area for 35 years,” says Chen, the broker from Troy.“Thirty-five years ago downtown Detroit was like this, and it’s not getting better.”

It's encouraging to see outside investment -- like the Freep building and Stott building; however, if the majority of investors are just going to sit on their properties, as the article suggests, then I don't think that'll do much good.

**downtownguy** · December-09-13, 12:36 PM

The key word in the broker's statement is "area." She probably hasn't crossed 8 Mile in 35 years either.

**DetroiterOnTheWestCoast** · December-09-13, 01:14 PM

The broker has a vested interest in promoting Troy over Detroit, which is why she is claiming that downtown is "not getting better." And then she's quoted by an author who writes "primarily on China, Asia, and nuclear proliferation". Very substantive journalism!

**Bham1982** · December-09-13, 03:16 PM

Originally Posted by DetroiterOnTheWestCoast

The broker has a vested interest in promoting Troy over Detroit, which is why she is claiming that downtown is "not getting better."

Or maybe she has an opinion that is shared by quite a few people? It certainly isn't unreasonable to say that downtown was in better shape 35 years ago. It had a lot more shopping, street life and construction activity.

You had 7 towers going up at the RenCen alone. Can you imagine a 70 floor tower being built downtown today?

**bailey** · December-09-13, 04:16 PM

Originally Posted by Bham1982

Or maybe she has an opinion that is shared by quite a few people? It certainly isn't unreasonable to say that downtown was in better shape 35 years ago. It had a lot more shopping, street life and construction activity.

This chick didn't say that though. She DID NOT say that Downtown was in BETTER shape 35 yrs ago, this dumb seaward said "“I’ve been in the Detroit area for 35 years,” says Chen, the broker from Troy.“Thirty-five years ago downtown Detroit was like this [like today], and it’s not getting better. "

So basically she said the exact opposite about 35 years ago that you seem to think she said, she is saying it was hellhole then and is a hell hole today... and she's clearly out of touch if she actually believes that "its not getting better" in a year over year comparison.

**p1acebo** · December-09-13, 05:07 PM

Originally Posted by bailey

So basically she said the exact opposite about 35 years ago that you seem to think she said, she is saying it was hellhole then and is a hell hole today... and she's clearly out of touch if she actually believes that "its not getting better" in a year over year comparison.

I would have to agree that she seems out of touch. I have seen a lot of improvement since living downtown two years ago. Granted it is just an eye ball test, but to say nothing has changed at all is a false statement. I would expect someone who doesn't spend a lot of time in Detroit to make generalizations like this, so maybe that is the case.

**Jason** · December-09-13, 05:10 PM

Or maybe she has an opinion that is shared by quite a few people? It certainly isn't unreasonable to say that downtown was in better shape 35 years ago. It had a lot more shopping, street life and construction activity.

Or maybe quite a few people share that opinion because they, like her, don't know anything about downtown?

The downtown office submarket is doing better than the Troy submarket.

Downtown Detroit
Market Size: 33,251,078 sf
2013 Net Absorption: 669,640 sf
Vacancy: 14.8%
Asking Rent: $18.57

Troy:
Market Size: 17,030,726 sf
2013 net absorption: -13,319 sf
vacancy: 31%
rent: $18.50

http://friedmanrealestate.com/brochu...ket_Report.pdf

So the downtown submarket is twice as big, and has half the vacancy as troy. Overall rent is about the same. And the trend this year has been downtown making huge gains and troy has actually been losing.

And if you look more closely at the breakdown between office classes, Troy's biggest losses are in the class A category, while Detroit's biggest gains are class A space, even though Detroit's class A space is more expensive to rent.

I haven't been able to find the same kind of numbers for apartments but it's well known that rents have been increasing sharply downtown and that there's a shortage of apartments.

**Lowell** · December-09-13, 05:23 PM

Jason, you're letting facts get in the way of a good story and mythology.

**Bham1982** · December-09-13, 07:18 PM

Originally Posted by Jason

Or maybe quite a few people share that opinion because they, like her, don't know anything about downtown?

Highly unlikely if they're local.

Originally Posted by Jason

The downtown office submarket is doing better than the Troy submarket.

And this would be your reasoning for why downtown is better off than in the past? I don't think most people look to office vacancy rates to determine relative desirability of a locale, especially when its a local subsidies shell game. They look at schools, safety, services, amenities and the like.

And there's no "shortage of apartments" in Detroit. There's a giant glut of multifamily sitting there, empty. The tiny amount of renovations are all subsidized.

**Gistok** · December-09-13, 07:38 PM

See Bham1982... now you're doing again what other's have accused you of in the past... you're moving the goal post... switching your logic to try to fit your argument.... a logic fallacy!

They're only commenting on THIS....

“I’ve been in the Detroit area for 35 years,” says Chen, the broker from Troy.“Thirty-five years ago downtown Detroit was like this, and it’s not getting better.”

But you're changing the endgame to include apartments, schools, safety, et al. Neither the broker, nor anyone else discussed that... and it's not part of the original argument.

**TTime** · December-09-13, 08:26 PM

So some of you guys like Detroit and some of you like Troy? Great, some of my buddies like fat chicks and some dig on waifs. If the facts presented above are accurate it looks like they are both trading around 18 bucks a foot so the market has determined that they are very similar in value.

**KJ5** · December-09-13, 08:48 PM

Downtown Detroit is a vastly different creature from the downtown of a decade ago. Remember Camilo Vergara's proposal to create a theme park of ruined high rises downtown? Somebody couldn't put forth such an idea today. The Madison-Lenox, Donovan Building, Statler-Hilton, Charlevoix and Lafayette have been torn down. The Book Cadillac, Broderick, Madison Theatre and Fort Shelby have been rehabbed. They're working on the Whitney Building. The Book Building and Hotel Ponchatrain are the only significantly sized buildings I can think of to go completely vacant in that era, and isn't the Ponchatrain on its way back? Nope, you'd have to go way out to the Packard to even float such a crazy idea these days.

**rb336** · December-09-13, 11:05 PM

Originally Posted by Jason

Or maybe quite a few people share that opinion because they, like her, don't know anything about downtown?

So the downtown submarket is twice as big, and has half the vacancy as troy. Overall rent is about the same. And the trend this year has been downtown making huge gains and troy has actually been losing.

And if you look more closely at the breakdown between office classes, Troy's biggest losses are in the class A category, while Detroit's biggest gains are class A space, even though Detroit's class A space is more expensive to rent.

I haven't been able to find the same kind of numbers for apartments but it's well known that rents have been increasing sharply downtown and that there's a shortage of apartments.

It's not that she doesn't know Detroit, it's that Detroit is taking her livelihood.

**Hypestyles** · December-10-13, 10:37 AM

Get Chinese firms to consult on designing and building rail services here.

**GP For Life** · December-10-13, 01:03 PM

Originally Posted by Hypestyles

Get Chinese firms to consult on designing and building rail services here.

Good idea. Maybe we can get a Chinese firm to figure out where the money to build said rail service will come from? Wouldn't that be novel.

Also, TTime is correct. The market values both markets equally, however, Troy is trending down and I assume downtown is trending up.

But let's not kid ourselves. I've been in a few c-suites in the area. There's not one class-A office building in SE Michigan. Not one. Class-A for the area, sure. Not for the rest of the country.

**WaCoTS** · December-10-13, 01:10 PM

Originally Posted by KJ5

and isn't the Ponchatrain on its way back?

yes.
the only grossly abandoned skyscrapers i think that are left with no plans are the Park Ave Blg, Metropolitan, and Book Tower. and the Eddystone & Park Hotel north of 75.

35 years ago [[in 1978), yeah downtown was a little more thriving than today, but the difference is that back then it was on the way down, whereas now it is on the way up. you cant really compare the two like she did; its almost apples & oranges. because everyone views the downtown of 1978 as merely a degraded version of the downtown of 1958 [[or at least i do)

**rb336** · December-10-13, 04:29 PM

I'm pretty sure there are plans in the works for the Book Tower. A person I know in the construction industry just recently spent three or four days going through it. I also understand that low-level talks are going on with a few different parties regarding the Metropolitan. The two other buildings will, hopefully, be restored as part of Ilitch's arena district plan

**canuck** · December-10-13, 06:37 PM

Originally Posted by WaCoTS

yes.
the only grossly abandoned skyscrapers i think that are left with no plans are the Park Ave Blg, Metropolitan, and Book Tower. and the Eddystone & Park Hotel north of 75.

35 years ago [[in 1978), yeah downtown was a little more thriving than today, but the difference is that back then it was on the way down, whereas now it is on the way up. you cant really compare the two like she did; its almost apples & oranges. because everyone views the downtown of 1978 as merely a degraded version of the downtown of 1958 [[or at least i do)

I think that the mentality has changed overall maybe to a "hands thrown in the air" approach to a more proactive one of restoring the preeminence of the core over the sum of its parts, even as extends to the region.

**Lowell** · December-10-13, 11:21 PM

This line really nailed it...

No wonder a poster on Sina Weibo, the Twitter-like service, asked, “Seven-hundred thousand people, quiet, clean air, no pollution, democracy—what are you waiting for?”

A little off on the democracy part but why on earth would anyone want to leave Shaghai and its booming skyline for dying Detroit?

PHOTOS: Shanghai’s Unbelievable Pollution Problem Started The Week Badly, Ended Worse

**rb336** · December-10-13, 11:34 PM

And THAT is what people want to get rid of the EPA for

**mikeg19** · December-11-13, 08:40 AM

Obviously investors are a great thing, especially international. The problem is that there are rumblings about brokers in Detroit being contacted and are being told "I'm looking for 100, 200, 300 properties." Save for maybe a few international investors, these guys are looking for property to sit on and make a few bucks. I doubt someone looking to acquire 100 scattered properties is interested in rehab. That's the scary part of this IMO...

**WaCoTS** · December-11-13, 10:29 AM

Originally Posted by mikeg19

I doubt someone looking to acquire 100 scattered properties is interested in rehab. That's the scary part of this IMO...

yeah, im thinking theyre just doing this as an "investment"...
http://www.nbcnews.com/id/29162036/#.UqesUhyYN1Y
^^old article, but it shows that this has been going on for awhile, all across the US to take advantage of our depressed economy.

get ready for the new era of detroit real estate speculation. if you thought it was bad for the past ten, 20 yrs, guess what. we live in someone's hedge fund now.

the last thing we need right now is more properties held captive by absentee owners, waiting for their value to go up.

the value will never go up if half the fucking city is held by overseas goombas who will never fix up or even see the properties! would be nice if some of them are rented/leased out. because you can fine the property owners for blight, but if said owner is a Chinese millionaire, wtf does he care about a couple tickets?

now, if they want to actually move in here, and live, and set up chinese communities, thats a totally different story. legal immigrants have always been one of the main strengths of this nation, because they arent lazy spoiled & jaded like us 4th, or even 10th-generation natives.

time will tell how this plays out, but its lookin pretty surreal to me.

**Islandman** · December-11-13, 10:36 AM

Interesting story on the investment going on in their own country:

**canuck** · December-11-13, 01:14 PM

Yes it seems the Chinese are pretty successful at building massive ghost towns of their own. They could probably teach us a thing or two in that dept.