ULI British Columbia Blog

2018 ULI Spring Meeting: General Observations on Detroit from the Bedrock Tour and additional exploring and conversations.

Detroit had millions of square feet of empty office that is now largely filled, and a downtown that literally scared people away. This was only 7 years ago. What a transformation.

“Surprise and Delight” – How Detroit’s Rock Ventures (Bedrock) filled up vacant office buildings

Some major private investors including Dan Gilbert (of Bedrock, Quicken Loans), bought many of the historic buildings, including whole blocks and have gradually restored their Art Deco grandeur, while converting some to residential and others to office. They added street-level retail, and generally animated the public realm often fairly inexpensively with landscaping, funky furniture, and art. There is public art everywhere. It’s a fun place to walk around.

In adding retail they typically were careful in curation and brands. On some streets they wanted iconic brands. Elsewhere it is independent chefs, micro roasteries, craft breweries and distilleries.

Their idea was to make downtown Detroit unique, with unique retailers so people had to come downtown. They didn’t want many of the big box suburban brands, as there’s no reason for suburb dwellers to come and animate the streets on evenings and weekends.

Relying on local artists and local food entrepreneurs makes the area unique. They also have “incubator” type opportunities for emerging chefs with food truck space as well as “pop up” type restaurant spaces. When they prove a concept, they are helped to move into their own permanent space.

The area is fun and interesting attracting office tenants and renters.  They’ve now filled most of the office space (expect in a few buildings still under restoration) so will be building new office space.

By focusing on the street level experience, it attracted both office tenants and residential. They worked with the city, although since the city was bankrupt, most of the funds were private and it seems the city has largely let these private developers implement their vision (and it’s a good vision that’s working).

In residential, 7 years ago they were achieving $0.85 per square foot. Today $2.25.

Not clear what the office pricing is.  A lot of the anchor-tenants-sized users are Bedrock companies (Quicken Loans, for example), but they also have banks, Google and other tech, and a lot of WeWork.

A lot of the retail space is leased at very low rents, it would appear. It sounds like they consider retail a lost leader to generate office and residential demand.

Note: according to JLL, Detroit has 13.3 Million square feet of CBD office, half of that A class space.

Use of Art

The Art Deco buildings (Detroit has the largest number and greatest concentration in the world, apparently). This creates a great foundation for creating a unique experience in DT Detroit. But the city has gone further.

Every blank wall has art.  Alleys have curated murals and art from well known Michigan and mid west painters (as well as some cafes). These are changed every few months. We even saw a parking garage which apparently has seven storeys of parking, with all the walls an art canvas.

Even some of the free outdoor seating is creative—a work of art.

Use of technology

Rocket Fibre – Bedrock’s internet fibre company has laid new generation fiber-optic cable throughout downtown Detroit. Fastest in North America, apparently. This is helping attract technology companies such as Microsoft, as well as powers their own tech company QuickenLoans.

Free wifi is available on a lot of streets.

Detroit is also experimenting with self-driving shuttles as a way to create and prove the technology for later export elsewhere. I rode in one.  Still a ways to go, but they are getting real world feedback.

Providing a full service to office tenants

To help attract tenants into their downtown Detroit buildings, the Bedrock group offers workplace design through their dPOP Culture company, which used to be in house design services and now is independent.

They have a team whose job it is to make the move into downtown Detroit as seamless as possible for new tenants. They help source anything a company needs, find parking (not a lot of it), catering, supplies, etc.

Rock Ventures – Bedrock has a team that shows off downtown Detroit. They are ambassadors and help companies considering DT Detroit understand the city, the opportunities, etc.  They show people around (including the ULI tour I was on). They are enthusiastic, locals, with one or more university degrees (the individual running my tour had degrees in urban geography and historic building preservation and was a native of the area.)

Even though other struggling downtowns or districts (such as Calgary’s CBD) may not have the advantage of billionaire families willing to invest, other lessons could be considered:

  • Using art to animate spaces
  • Putting furniture in plazas or wide sidewalks near food service, or inviting food trucks, to create interest on the street.
  • Offering cheap or free retail space for up-and-coming chefs, breweries, or café entrepreneurs to create something unique.
  • Animating alleys with temporary art displays that get replaced every few months (better come see it now, or it will be gone).
  • Curating retail to an authentic Downtown or neighbourhood experience, not available in the suburbs or elsewhere.
  • Converting office space to residential: will be more difficult in places without tall, skinny, grand art deco. But it was key to the successful re-birth of DT Detroit.

Opening up portions of office buildings to interior light wells (if possible) or just grand, tall interior spaces with art.

Written by: Wendy Waters, Senior Director, Research Services & Strategy, GWL Realty Advisors & ULI BC Chair of Mission Advancement

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