Commercial Investment Real Estate September/October 2013 - Page 8

TRENDS MARKE T Invest in Detroit Now D Despite the dire bankruptcy headlines, the time to buy in downtown Detroit is now, if Dan Gilbert hasn’t already bought it. Since 2007, the founder of Quicken Loans moved his corporate headquarters and 7,000 employees from the suburbs to Detroit’s CBD and has purchased more than 15 buildings. His vision is “a lively live-work-play district in the heart of the city based around entrepreneurial com- panies in the digital economy,” according to a Brookings Institution report. And he’s not alone: New market-rate apartment complexes — the 124-unit Broderick Tower and the 58-unit Auburn — have gone up, and St. Louis-based developer McCormack Baron Salazar is planning a $60 million riverfront residential and retail development. “T ese are practical real estate strategies that we know will have a lot of market acceptance,” said Sue Mosey, president of Midtown Detroit, which has spearheaded $1.8 billion in public-private investment in Detroit’s urban core. Top 5 Offi ce Rent Growth Markets YOY % change, 2Q13 11.3% Salt Lake City 9.8% Denver 9.0% New York City 8.5% San Jose, Calif. Columbus, Ohio 0 2 4 8.4% 6 8 10 12 Source: Cassidy Turley “For commercial real estate, higher rates [of infl ation] mean the end of (some would say) the artifi cial boost to the capital markets and an eventual return to more pricing power for landlords as leasing market fundamentals continue their oh-so-gradual tightening.” —Robert Bach, national director, market analytics, Newmark Grubb Knight Frank 6 September | October | 2013 Commercial Investment Real Estate