It’s the American way, cheering for the underdog, rooting for those who are down on their luck or facing adversity and hoping for a miracle. After all, our nation’s history is rooted in the American patriots’ improbable victory over the mighty British Empire.
No American city has fallen as far as Detroit, which only makes the city’s Rocky Balboa–like comeback story more compelling.
For more than a decade, Detroit was at the bottom of the real estate industry heap. We knew this because every year when the Emerging Trends in Real Estate report was released, there was Detroit, ranked dead last (usually 50th or 51st depending on the number of markets in the survey) in the Markets to Watch section based on survey participants’ views of cities’ investment potential.
During those dark days, the city was littered with abandoned homes, overgrown lots and empty commercial buildings. Detroit’s population shrank from 1.8 million residents to 700,000. The city’s finances were so poor that Detroit filed for bankruptcy in 2013. The city had hit rock bottom.
Yet, instead of staying down for the count, the Motor City is on the road to recovery and is making a stirring comeback, thanks to some local leaders and visionaries. Urban renewal and redevelopment projects, and a reinvigorated auto industry, have created jobs and improved the city’s financial outlook. In just a few years, the unemployment rate has gone from approximately 15 percent — the highest in the nation at the time — to 5.4 percent at the end of 2015.
Some commentators have even gone so far to say Detroit is cool again. In its December 2015 issue, Travel + Leisure magazine listed Detroit as one of the “Best Places to Travel in 2016.” The article noted:
In a few short years, Detroit has gone from being a cautionary tale to a success story, and now bills itself as “America’s Great Comeback City.” This is more than just clever marketing — formerly desolate stretches of the riverfront, city streets, and buildings have been resurrected for locals and visitors alike. The first Aloft hotel in Michigan is open in the historic David Whitney Building, and the Detroit Marriott at the Renaissance Center recently unveiled a $30 million renovation. And the historic fire department headquarters across from the Cobo Center will be reborn as the boutique 100-room Foundation Hotel in early 2016. Aside from increasing its hotel offerings, the city has several other new draws: the West Riverfront Park, great for biking, running, and fishing; and the DNR Outdoor Adventure Center with a freshwater aquarium and man-made waterfall and climbing tree. Almost 100 new restaurants, along with breweries and distilleries, opened in the past two years, with more on the way.
Another round of economic growth is projected for the city in 2016, as a number of redevelopment projects get under way. Most property sectors are expected to record improved fundamentals, and more investors are showing renewed interest.
As affirmation of Detroit’s rebirth, for the first time in more than a decade, the city was not ranked last in the 2015 edition of Emerging Trends in Real Estate. Its ranking jumped from 51 all the way to 29. In the 2016 edition, Detroit climbed another six spots in the rankings to number 23.
Could Detroit crack Emerging Trends’ top 20 Markets to Watch next year? Don’t bet against it.
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Larry Gray is editorial director of Institutional Real Estate, Inc.
