Developer Predicts Detroit's Turnaround in 10 Years

The city's population has dropped below one million residents, though Oakland County to the north has grown to over one million. This trend is turning around, though, says David Farbman of the Farbman Group.

Large developments such as the sports stadiums and casinos, as well as improvements to Orchestra Hall, have drawn people into downtown. Not necessarily seen as a large Class A office market, more new offices are being built, including the new five-block Campus Martius endeavor, which will include thousands of new workers at the Compuware headquarters by the end of the year.

Employees are also surging downtown to join General Motor's and Electronic Data Systems' move into the Renaissance Center complex. These moves have spurred new demand for loft and condominium projects in the struggling city. "Right now the residential market in Detroit is pretty good when compared to other residential markets in the state. Supply and demand are meeting pretty good, with even some demand in the upper-end condominium market," Farbman said.

His company's projects, such as the 90-unit Indian Village and the 50-unit Graymont, have sold out, Farbman said. Another development is currently still being renovated, the 48-unit, high-end River Place project, he said. "It's the old Parke Davis building, right on the river," Farbman said. "We're already 60% sold and 50% closed."

He went on to say that the last four to six weeks have really brought a lot of interest in Detroit. That doesn't mean it's easy yet to develop in the city with all the red tape one has to wade through. "There is demand, but you have to work with the city and make sure you can meet all codes," Farbman said. "It's not easy to make a big margin. It makes sense, but you have to run the numbers, and get a full grasp of what the scope is to build a project."

For example, the units in River Place will go for up to $550,000, Farbman said, but even with these prices his company won't see a lot of money. "It will be a profitable transaction, but the margins are tight," Farbman said.

Regardless, he told GlobeSt.com that the next 10 years will be great for the city. According to Farbman, his three-year vision sees substantially improved entertainment and retail districts in the downtown area, with at least 350 to 400 lofts built. "This includes a number of necessity retailers coming in, such as grocery stores and service stores. They're looking so aggressively, it's wild," Farbman said to GlobeSt.com.

Five years from now, Farbman describes, a city that will see more ground-up developments and lots of loft conversions. By 2013, Detroit will look totally different," he went on to say.

"Without question, in 10 years Detroit will not only be the place to office, it will be the place to live as well," Farbman said.