Locals call it the " Dan Gilbert effect," the recent buying spree of commercial buildings in downtown Detroit by the billionaire founder of Quicken Loans.

Now the phenomenon appears to be spreading.

Despite a fiscal plight that forced the city to seek Chapter 9 bankruptcy protection five months ago, the real-estate market has been picking up in Detroit's downtown core. Mr. Gilbert has led the charge by buying dozens of properties and moving in 3,800 of his employees from suburban offices and creating another 6,500 jobs downtown since 2010, according to the company.

But lately, other investors have begun buying trophy buildings and starting to develop apartments to meet the rising demand from workers who prefer downtown living. City officials estimate residential occupancy downtown is 97 percent.

The projects show that some real-estate investors are looking beyond the bankruptcy to an eventual rebound in Detroit. They are hoping that property values and rents will rise due to the region's resurgent automotive industry and the expansion of its medical community and nascent technology industry.

The city's economic development arm forecasts almost 1,000 new residential units coming on line downtown over the next five years. Next year, developers are expected to complete the renovation of the 19-story David Whitney building to house a boutique hotel, apartments, restaurants and a bar, city officials say.

The real-estate firm Schostak Brothers in September announced the planned construction of a 16-story office building for $111 million to house Meridian Health Plan, slated to open by 2017. The building would be downtown Detroit's first new high-rise since 2006. Company officials weren't available for comment.

In October, Dongdu International, known as DDI, paid a total of $13.6 million for two of Detroit's better-known buildings, including the former home of the Detroit Free Press, now slated for a residential conversion. The Chinese company is now under contract to buy a third, 10-story loft-apartment building for $2.77 million, an attorney representing the company said this week.

And just last week, the city's downtown development authority gave preliminary blessing to a proposed $450 million sports-and-entertainment arena backed by the Illitch family to house the Detroit Red Wings through a mix of public and private funding. The plan includes another $200 million in private investment for residential, retail and office space across a 45-block area.

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Anonymous said...

97 percent occupancy - that's exciting!

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