and historic feel was “far more spectacular.”
The warehouse sits next to the Detroit
Athletic Club, has an open courtyard and
a balcony that overlooks the city, including
a view of the Lions’ football field, amenities impossible to imagine in a suburban
office park.
And unlike the suburban towns, down-
town Detroit has started to fill up with
start-up firms, especially in the high-tech
and design fields, and Palmer finds this a
refreshing change. “We’re joining the
neighborhood and trying to tap into that
vibe down there.”
“The CBD could see a vacancy rate of
25% in 2014,” according to a recent study
by Newmark Grubb Knight Frank, “a rate
not seen since 2002.”
Yet Larson says some office sectors are
quite healthy. Many of the CBD’s biggest
buildings now have an occupancy rate
over 90%, leaving a limited supply of space
with large floor plates. And Rock Ventures
has enough confidence that it has started
the design process for a mammoth devel-
opment with commercial, residential and
office space on the site of the now-demol-
ished Hudson’s department store.
Other cities in the Midwest, like
Columbus, OH, have also seen new residents sink roots into Downtown.
“Columbus was never a ghost town,”
says Kenny McDonald, chief economic
officer of Columbus 2020, a public-private
partnership that seeks to grow the regional
economy. “We never had the highs and
lows of other Midwestern cities.” But
although the local economy was buoyed by
the Downtown’s state capitol and the mas-
sive Ohio State University just to the north,
for years “they seemed like two islands; but
now they are absolutely connected by all
the new housing.”
He credits Mayor Michael B. Coleman
with pushing downtown development, and
since 2002, the construction of about
5,000 new apartments and condos have
helped stitch the central city together. “In
the past two years, development Downtown
has hit a critical point; maybe a tipping
point,” he adds. “And the private sector is
now taking it to a whole new level.”
In March, for example, Nationwide
Realty Investors announced that about
1,000 of its employees had finished mov-
ing into a five-story, 200,000-square-foot
mid-rise at 10 W. Nationwide, the newest
building in the Arena District, the center-
piece of Columbus’ CBD and developed
by Nationwide.
“ 10 W. Nationwide is a linchpin build-
ing and a key piece in the Arena District’s
continued development,” said Nationwide
Realty Investors’ president, Brian J. Ellis,
at the time. “The new building adds to the
overall energy and vibrancy of the area.
Our Arena District restaurants and enter-
tainment venues will benefit from the
improved connectivity, and from the addi-
tion of a thousand new Nationwide
employees in the District.”
Other NRI projects in the Arena
District, the former site of the Ohio
Penitentiary, include a $10-million office
building, which the General Services
Administration will anchor, and a
280,000-square-foot building anchored by
Columbia Gas.
Roe says that 20 years ago, the city of
Cleveland only had about 1,000
Downtown units. Now, however, it has
about 11,000 with a vacancy rate of
roughly 4%. And all this activity has
pushed some developers into building
again. In the spring, for example,
Cleveland saw the opening of the
23-story Ernst & Young Tower, the city’s
first new skyscraper in decades.
“There hasn’t been a lot of new construction in Cleveland, but the new construction that exists has done really well,”
says Roe. Even though it has been open for
just a few months, for example, only about
10% of the EY building remains available.
“That was a big risk they took,” Roe
says of the skyscraper’s developers, but
their success should “open a lot of eyes to
the opportunities to invest in these communities.” In the last nine months, capital that since the start of the recovery had
been flowing toward top tier cities like
New York, Los Angeles, Chicago and
Dallas, has started to become available for
Detroit, Cleveland, St. Louis and others
throughout the Midwest.
“A healthy urban core makes for a
healthy real estate market,” says Roe, but
helping this trend continue will take the
type of leadership shown by Gilbert and
Quicken. “He did a great deal by bringing
all his people downtown; without that
commitment it’s hard to get your urban
core going.” ◆
Real Estate Midwest
continued from page 23
AdIndex
1 Yardi
3 Colliers
4 Marcus Millichap
7 Stewart Title
11 Cushman Wakefield
12 CBRE
15 CCIM
17 Berkadia
19 Cohn Reznick
20 Cassidy Turley
21 Xceligent
22 Transwestern
23 NorthMarq
27 NASA Federal Credit Union
29 United Properties
30 Harry & David
31 RS Industrial
35 GE
38 Duke Realty
38 Oxford
39 RS Healthcare
40 RS NetLease West
41 American Healthcare
Investors
49 American Realty Capital
50 Farris Lee
51 Fidelity
52 Mission Capital Advisors
55 CBRE
57 Massey Knakal
59 Elm Tree Funds
59 Auction.com
61 Blackstone Group
62 Coldwell Banker
63 Cassidy Turley
64 Ten Capital Management
64 Calkain
65 Stan Johnson
66 Franklin Street
66 Inland Private Corporation
67 Carter
67 Sitex Group
69 CIBC World Markets
70 Walker Dunlop
71 UC Funding
72 Access Point
72 Avison Young
73 Joan’s Legacy
74 MRP Realty
74 NASA GlobeSt Webinar
76 ALIS
Cvr 2 Capital One
CVR 4 Healthcare Trust
of America
This advertising index is provided as an additional service. While every attempt has been made to make
this index as complete as possible, the accuracy of all listings cannot be guaranteed.
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