Investor News: $3B Investment Coming to Detroit

Source: Austin Distel on Unsplash

Exciting news is on the horizon for the Motor City, and it's not just about cars and music. Detroit's New Center area is poised for a transformative $3 billion collaborative development involving key players such as Henry Ford Health, the Detroit Pistons, and Michigan State University. As property experts and enthusiasts, we can't help but see this as a golden opportunity to grow your real estate portfolios and investments.

Let's dive into the details of this massive project.

The Blueprint for Growth

The development comprises six groundbreaking projects spanning healthcare, apartment construction, and medical research. Although awaiting final approvals, two projects, the Orange-labeled new housing, and the Green-labeled joint Henry Ford-MSU research center, are scheduled to break ground next year.

The developers have meticulously outlined their vision in a comprehensive proposal for a Transformational Brownfield tax-capture incentive. The most significant venture, a $2.2 billion Henry Ford Hospital expansion, stands out for not seeking any incentives or tax breaks.

Investment Breakdown

The remaining five projects, totaling $773 million in costs, seek at least $287 million in tax breaks and incentives over 35 years. This includes a Transformational Brownfield tax capture, property tax abatements, federal low-income housing tax credits, and federal historic tax credits.

Henry Ford Health, which owns all the land, plans to enter 49-year ground leases with Pistons-related entities for the residential project sites. Pistons entities will construct and own the new buildings, injecting a dynamic element into the real estate landscape.

Community Impact

The $3 billion development is not just about figures; it's about transforming Detroit. With 2,145 construction jobs and 735 permanent full-time jobs on the horizon, the projects are expected to create a ripple effect of economic growth. Moreover, 662 new apartments, with 20% designated for below-market rents, address the city's housing needs.

The Jewel in the Crown: Henry Ford Hospital Expansion

A $2.2 billion, 1.1 million-square-foot expansion will feature a new 21-story hospital tower, upgraded operating rooms, and a revamped emergency room. The project aims to enhance patient experience with private rooms while maintaining a total patient bed count of 877. Construction could commence as early as "early 2024," contingent on Detroit City Council approval.

Pioneering Medical Research Center

The joint $393 million Henry Ford/MSU medical research center is set to be an eight-story hub for cutting-edge research. It will create 558 direct permanent full-time jobs with an average annual wage of $137,800 and house the Nick Gilbert Neurofibromatosis Research Institute. Groundbreaking is anticipated in May 2024, with completion by the second quarter of 2027.

Revitalizing Historic Spaces

The developers aim to breathe new life into historical spaces with the One Ford Place redevelopment, a $190 million project converting the 1918 building into 403 mixed-income apartments. With an eye on the inclusion of the National Register of Historic Places, the redevelopment is expected to create 98 new permanent jobs.

A Vision for Affordable Housing

The commitment to affordable housing is commendable, with 20% of the 662 apartments designated "affordable." These units' rents cater to various income levels, ensuring inclusivity and addressing the city's diverse housing needs.

Timeline for Growth

Construction timelines for the various projects range from "early 2024" for the hospital expansion to the second quarter of 2029 to complete the One Ford Place redevelopment. These timelines present a clear roadmap for potential investors looking to capitalize on Detroit's evolving real estate landscape.

Seizing the Moment: Use the Opportunity to Expand in Detroit

Detroit is at a crossroads, and as landlords and real estate investors, this is your moment to shine. The $3 billion investment presents unparalleled opportunities to diversify your portfolio, contribute to the city's growth, and reap the rewards of a revitalized Detroit.

Stay tuned for updates, and ensure you're at the forefront of this transformative journey.

Want to know more about the rental investment opportunities in Detroit right now? Feel free to reach out, and I’d be happy to share my tips.