Multifamily Demand in City is Questionable

"There definitely is a demand," Rende told GlobeSt.com. "There's tons of6-unit, 10-unit and 20-unit projects going on, that have, to my knowledgemet with some majority of success."

Dozens of investors are turning vacant, crumbling buildings into loftprojects. For example, state and local loans are supposed to help rebuildthe Kales Building for $16.9M. The 84-year-old office building, which housedthe headquarters of the company that later became Kmart, is supposed to betransformed into 119 multifamily rental units with retail space on thebottom floors.Old hotels and technology park plans also have loft redevelopment projectsattached in the city.

However, the multifamily plans in Detroit just don't have the same zing asChicago's residential burgs, Rende said."They just don't compare. Chicago is a great city with a vibrant, livingdowntown, with an environment that doesn't shut down after 5 p.m.," Rendesaid.

The city of Detroit isn't like that, Rende said. Even hotel rooms at new,permanent casinos and stadiums, which are supposed to bring more peopleDowntown, won't likely inspire them to move there.Detroit has had image problems, with high crime and a lack of retail andrestaurants to entice new residents.

That's not to say there isn't enough buildings for multifamily projects."You go down to the Detroit central business district, it doesn't matterwhat street, and you can see vacant buildings with the potential for loftsor condominiums," Rende said.

The question is, he said, do investors believe they can make moneyrehabilitating a deteriorating building, or demolishing it, to start anew.Incentives help, but the level of demand is highly questionable, Rende said.