Woodward Avenue is not just an important Michigan roadway, it is a historic and even iconic piece of Americana. The 27-mile-long artery running from Detroit to Pontiac was first paved road in America in 1909 and played host to the annual Woodward Dream Cruise, considered to be “the largest single-day automotive event in the world.”
Unsurprisingly, given its high profile and strategic location in the dynamic Southeast Michigan market, Woodward is also one of the most impactful and desirable retail corridors in the region. Woodward runs through some of the area’s most important Detroit suburbs and thriving neighborhoods, and understanding the unique dynamics of this fascinating roadway is essential for anyone looking for commercial real estate opportunities in the region.
On the road
A popular location for a wide range of retail and restaurant tenants, space along the Woodward corridor is in high demand. Woodward doesn’t just run through some of the most dynamic communities in Oakland County but offers proximity and access to Midtown and Downtown Detroit.
In many ways, Woodward is the cultural axis of Metro Detroit, a coveted address that offers the prestige and visibility that many retailers desire. That reputation as metro Detroit’s “Main Street” is arguably the greatest benefit for businesses: residents in the region immediately recognize a Woodward address.
Neighborhood nuance
One of the distinguishing characteristics about Woodward is that it passes through or runs adjacent to so many different neighborhoods, from Ferndale and Royal Oak, to Clawson, Berkley and Birmingham. While these neighborhoods are more alike than different, and each has a strong sense of community, there are subtle neighborhood dynamics and nuances that retailers should understand when looking for a new location or expansion opportunity.
Retail businesses in Birmingham tend to be more upscale, in terms of their offerings and rental costs. Royal Oak is not too far behind, although a notch lower in terms of commercial rents. It’s a community with lots of downtown housing and many restaurants, along with a strong entertainment component.
Ferndale has a similar reputation as a blossoming community that traded the “up and coming” tag for “thriving” in recent years. Ferndale now boasts a growing selection of eclectic restaurants and retail options. The retail landscapes in Clawson and Berkley are more designed to appeal to residents. While some retail and dining tenants in those communities have a regional draw, there is a noticeably more local character to those two neighborhoods.
Local factors
All real estate is local, and the Woodward commercial corridor is a great illustration of that. The character of the community and the retail ecosystem changes as you move along Woodward, not just from one town to the next, but from one block to the next.
There are lots of young families in neighborhoods like Huntington Woods, west of Royal Oak. Similarly, local street neighborhood parking ordinances have encouraged single-family housing in Berkley and subsequently attracted a high number of young families.
Retailers should also monitor significant construction projects along Woodward that could have an impact on the local market dynamics. One interesting update currently underway in downtown Ferndale is the Woodward Moves project: an initiative that includes road resurfacing, the reduction of travel lanes to create new bike lanes, improvements to curbs and shorter/safer pedestrian crossings.
Retailers looking for space on Woodward in downtown Ferndale, Royal Oak or Birmingham should expect to pay more per square foot than if they are located on a secondary road. That said, retailers need to be sure their business model is sustainable given that premium.
For those retailers still wanting to take advantage of the coveted Woodward without the price, consider setting up shop on a secondary road. Hip important retailers have done very well with this strategy. One successful example is in downtown Ferndale where a retailer recently relocated a few blocks away from Woodward, gambling (correctly, as it turns out) that a loyal customer base would follow. The improved parking and lower rents at the new location were a better fit for the business.
Finding opportunities
Parking availability varies considerably along Woodward, as does visibility for those located even one block from the main drag. Something as subtle as which side of the street you are on can make a difference for retailers. Buildings along the northbound side of Woodward are lit up by the setting sun in the afternoon and evening, so businesses that cater to shoppers in those hours might benefit accordingly.
The same dynamic applies in reverse to the southbound side of Woodward, where coffee shops might be a better fit, for example. Because of those nuances, anyone looking for commercial real estate opportunities along Woodward would be wise to partner with a trusted real estate broker who knows the area. Not only do those brokers have the necessary relationships and regional networks, but Woodward is such a hyperlocal corridor that detailed neighborhood knowledge and insights play an outsized role in identifying and closing on promising opportunities.
Rick Ax is a retail broker with Michigan-based Farbman Group, a Midwest full-service commercial real estate firm. To reach Rick directly, email [email protected].