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Detroit's Residential Rental Rate Goal: $2 Per Square Foot

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Chairman and founder of Quicken Loans (and bulk buyer of downtown buildings), Dan Gilbert, must have tipped someone heavily at the Crain's Detroit department of graphics. In the above image he is the tallest of the heavy-hitting Detroit developers when in real life, the man is puny 5 foot 6. Speaking of coming up short, the article discusses how current rental rates are the hold up in more residential development: in downtown and midtown, the average residential rental rate is $1.25 per square foot but to turn a profit, projects need to bring in around $2 per square foot. "Filling that gap between rental income and project cost remains the role of subsidies from federal, state and local governments as well as philanthropy. There are hopes of a virtuous circle: As more projects push up the limits of the rental rate, more development can occur to push the limits higher yet again. " Gilbert has been exploring plans for a 350-unit apartment building on the site just north of the Compuware Building on Woodward Avenue. (And we've heard talk of an infinity pool on the roof. Does anyone have more info?) He is optimistic because "The marketplace works, and especially when you're 98 percent occupied with high demand, prices will go up." One encouraging sign is the Broderick Tower, where regular units are around $1.35 per square foot, but the penthouse units are more than $2 per square foot.

· Building patience: Developers ready their plans, await day when market outshines subsidies [Crain's]

Broderick Tower

10 Witherell St., Detroit, MI 48226