Detroit’s commercial real estate opportunity: empty store fronts, lots.

Detroit's commercial real estate challenges call for another look at creativity.

As echo boomers migrate into core urban centers and abandon suburbs, Detroit's "donut effect" is a unique problem for many commercial real estate management companies stuck with empty store fronts and retail locations within the city limits.

According to the Counselors of Real Estate, the best sought solutions are born out of creativity.

The CRE cited an example of an abandoned, unfinished hotel development in New York City that was repurposed as a rental high-rise.

"Younger workers who want to live close to where they work could not find suitable housing," said Kenneth Browne, partner at Urban Development Partners. "It was literally a hole in the ground with a foundation poured when it was abandoned but we envisioned something new, something different. Now the building is helping to reinvigorate the neighborhood."

In cities like Pittsburgh that inherited large, aging industrial infrastructures, creative partnerships have helped transform vacant buildings and storefronts into community centers, community arts collaboratives or theaters in urban centers as well as suburban strip malls.

Christopher Gerlach, director of public policy research at the International Council of Shopping Centers, said property owners and leasing agents should consider the character of the community, as well as the adverse effect of empty storefronts – and for the benefit of all, find a creative solution to fill the space, rather than leave it empty for an extended period of time, hoping for a more lucrative tenant. Examples include local arms of educational institutions, entertainment venues, fitness centers medical or dental offices, even churches and resale shops – anything so long as it's occupied. If occupancy is maintained, the probability of property damage, theft, or vandalism go down significantly.

Detroit's angle
For the city of Detroit, the scope and intentionality of its creativity is slightly different. Many commercial real estate companies are seeking both creative solutions and creative businesses with plans to sign long-term leases.

"We are excited about opening up a studio space downtown where we can be closer to our clients and the incredible revitalization taking place," Joel Smith, partner at Neumann/Smith Architecture, told the D Business Journal. "The new Detroit office will provide an opportunity for more face-to-face meetings, foster a closer client experience, and increase our involvement in the community."

The problem in Detroit is two-fold. The city has a high vacancy rate, coupled with low traffic. So the draw is to attract large to mid-size creative firms and all of their employees with attractive rent packages. Retailers can return once people traffic and consumer demand is restored.

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