Developers delivered 543 apartment units to downtown Detroit in 2016, and JLL estimates that they’ll bring 1,607 more this year. This is good news for the city, which is still working through the first phase of its comeback from bankruptcy.
All these new apartments? Brokers with JLL say that the city’s multifamily boom has already spurred additional retail and office development. As more residents move into the center of the city, Detroit will only grow stronger, said Aaron Moore, a multifamily associate with the Detroit office of JLL.
“All of these new apartments have had an impact on Detroit,” Moore said in an interview with Midwest Real Estate News. “It’s important to remember, though, that this is only the beginning of the city’s efforts to come back after the bankruptcy. New apartments are only the beginning. It is nice to see this activity, though. It has a ripple effect. It brings people’s spirits up. We are seeing a lot of new investment in the area, and that’s nice to see.”
JLL reports that most of the new development in Detroit has taken place in just 7.2 square miles of a city that encompasses 139 square miles. This means that much of the city still needs to see investment.
Still, the multifamily activity in downtown Detroit is a welcome sight. JLL says that since 2006, more than $10 billion has been invested in the city of Detroit and that more than 16,000 jobs have moved to the city since 2010.
Multifamily developers have noticed. JLL reports that developers have added 1,551 apartment units to Detroit during the last five years.
The goal is to populate downtown Detroit with dense, walkable neighborhoods. JLL says that Detroit has the chance to become a world-class entertainment city. The NBA’s Detroit Pistons recently announced that they will return to Detroit’s city limits. This means that soon all four of Detroit’s professional sports teams will be playing within less than a 1-mile radius.
Three urban casinos, several bars and plenty of restaurants will surround these sports franchises.
“You knew Detroit was going to be successful when the national and local foundations came together to save the city after the bankruptcy,” Moore said. “The arts and culture communities have had a tangible and intangible impact on the city. There’s been a renewed focus on the riverfront. It is clear that Detroit has become the regional epicenter of arts, culture and education in the area. Who wouldn’t want to live there?”
Moore isn’t worried that developers are adding too many apartment units in downtown Detroit. The bigger concern, he said, is that developers won’t be able to add multifamily units to the market quickly enough to meet demand.
“Young professionals, Baby Boomers, everyone is moving to downtown,” Moore said. “These people want to work in walkable communities, the 20-minute neighborhoods, where you can walk and bike to everything you need in 20 minutes. We are seeing more mixed-use development in downtown Detroit because of this. Detroit’s trajectory is positive and will remain positive.”