Randall Book, EVP at Colliers’ Post

Detroit is emerging as America's most unlikely real-estate boomtown, with a development frenzy in the city's central business district. Detroit's residential market is also taking off, with home prices up 40% since 2020. Read more on the city's drastic reputation transformation from urban decay to renewal here: https://lnkd.in/etq9wnSD #detroit #development #boom #industry #industrial #realestate #news

Fascinating lessons from an unlikely real estate phoenix: 1. diversify uses to lessen dependency on a single tenant profile 2. think creatively about how to incentivize/subsidize redevelopment of tough properties 3. lean on local champions/find a Dan Gilbert

If you were following my list of the "Most Undervalued Housing Markets" articles for U.S. News & World Report, you'd have seen Detroit, Michigan again holding the top spot. It's also the #10 cheapest place to rent a home based on local incomes. But it likely won't stay this undervalued for long, especially given its recent coverage by the Wall Street Journal as a boomtown: "Barely a decade after Detroit declared bankruptcy, the city is emerging as America’s most unlikely real-estate boomtown...A development frenzy has gripped Detroit’s central business district. Big companies, including Ford and developer Related Cos., are spending billions of dollars on office buildings and other properties." I update the lists of the most over- and under-valued markets in the U.S. twice a year for U.S. News, both for buyers and for renters. Link to most recent ranking in comments. #detroit #usnews #wallstreetjournal #wsj #realstate #housingmarket #redevelopment #mostundervaluedhousingmarkets #mostovervaluedhousingmarkets

In a recent edition of my Risk, et al... newsletter titled "Beware the 'Loop of Doom'", I discussed the #risk of a #commerical #realestate doom loop impacting the downtown areas of the larger cities (e.g., City and County of San Francisco) in the country. Time will tell which cities will be impacted the worst by the wide-spread adoption of #remote working. However, once a city goes into a doom loop, can it get out? Well, based on this article by Konrad Putzier with The Wall Street Journal it's conceivable a city can come out of the doom loop in a better position. As an example, Mr. Putzier presents the City of Detroit as a case study. Like a stock, a city can become a value play if you have a long-term horizon. #Detroit has been taking it in the teeth for some time, but things are looking up. I think one reason cities in the #Midwest like Detroit are seeing an increase in attention is due to #climatechange migration. The news has been full of stories recently where investors are buying land in the Midwest in the anticipation of how changing weather patterns are going to make some areas more enjoyable to live in while other parts of the country become less so. This trend makes a lot of sense to me.

The Wall Street Journal has followed up on its story about the "doom loop" in Downtown St. Louis with an article about the rebirth of Downtown Detroit. A Tale of Two Cities reminiscent of the famous Charles Dickens novel in many respects. A couple months ago I wrote a LinkedIn post about the revitalization of Detroit’s downtown. I have visited Detroit twice over the last two years. Detroit and St. Louis are not apples to apples but I believe our business/political leaders in the Gateway City can learn from the rebirth of the Motor City. 1. Invest and the people will return. Detroit is being redeveloped primarily by several high net-worth Native Michigan individuals/families. Obviously there is a profit component to their investment but their also is a legacy/hometown pride element as well. We need more wealthy folks from STL to invest in our Downtown. These investments do pay off - see Ballpark Village and developments around the St. Louis CITY SC stadium. 2. Missouri Senate Bill 792 must pass. This bi-partisan bill provides tax credits up to 30% of office to other use conversion costs. One of the reasons why many of our Downtown architectural treasures have stayed vacant is because it is cost prohibitive to rehab them given the current incentives available. Pass SB 792 and you will see cranes 🏗️ on our Downtown skyline again. 3. St. Louis City should implement security incentives for developers so they can pay for cameras, lighting, barriers and off-duty police. This will create an ecosystem of safety and bring residents/businesses back. The time to act is now! The rapid response by our leaders to the WSJ’s article about Downtown St. Louis was positive to see. However, actions speak louder than words. With St. Louis City facing $1.6B of debt and a projected multi-million dollar loss in Earnings Tax revenue, our politicians need to act with a sense of urgency and engage the business community to help bail us out. Otherwise, we will be filing for bankruptcy by the end of the decade like Detroit. Maybe that’s the wake up call we need. #community #invest #incentives #renewal #business #rebirth City of St. Louis Greater St. Louis, Inc. St. Louis Development Corporation (SLDC) L. Jared Boyd Megan-Ellyia Green Cara Spencer Travis Wilson Steven Roberts Mike Parson Neal Richardson, MBA Jason Hall Konrad Putzier City of Detroit

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I'm not sure how this validates the assumption that the urban doom loop has been cured. Since this loop is cyclical and Detroit seems to be back in its 1920s spending and development era, we could assume that there are more challenges to come. We know what happens in almost every city following such development, spending, and prioritized unsustainable industrial growth; I shouldn't have to explain this. Jumping to a conclusion based on speculation and hope does not make future realities any clearer. Once the Big Three (hopefully) fails to exploit Detroiters, Americans, global consumers, and resource-wealthy nations, what is the plan to save empty new developments from burdening the city and its workforce again? When the auto and defense industry becomes too costly (it already is) to justify investment in new operations - oh and the Earth reaches the 3 degrees Celsius threshold of global climate catastrophe - what will we do then... Capitalize on Michigan's water resources? Seriously, what's the gameplan? Detroiters alone do not hold wealth if the city's most powerful industries aren't doing well. We've seen this before. One poor move by GM or Ford and the city will be grappling with debt, unemployment, and undervalued homes for 100 years. Do I want that for Detroit? No. But, do I want to see the auto industry do well? No. Can the Arsenal of Democracy help Detroiters maintain a living? Yes. Is that right? No. Does new tech and innovation have a serious shot at redefining Detroit? Maybe. Do I believe in tech, innovation, and subsequent consumerism as a solution? No. So why are we investing so much money, time, energy, resources, and labor into an uncertain, top-down future when Detroit has more than enough land, resources, partners, and labor right now to sustain a healthy, equitable environment with less negative impacts and less economic risk? I have no idea, but I am genuinely scared by the level of economic dependence Detroiters have on corporate decisions, the real estate market, and government-backed project funding. Individuals in local communities, and even union members, have little say over any decisions that could potentially destroy their future. Even more concerning, let's say my own assumptions are wrong and Detroit continues to boom... what would that cost? Death of the entire Congo region? Environmental disaster in the Andes region? All that being said, we can't analyze a city in its development stage and call it a success without understanding the full spectrum of consequences associated with urban "boom". The doom loop explains the risks associated with unsustainable growth; Imagining a city's economic stability by looking at one upward-climbing portion of a quadratic equation's graph is concerning... I love radical imagination and optimism, but I don't think that elite utopian pipe dreams, increasing corporate and city revenue, nor rising real-estate occupancy / value equates to a shiny, lasting future for Detroit.

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Thanks Francis Saele for sharing this inspirational article!

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