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Original article URL: http://bridgemi.com/2016/11/as-state-economy-recovers-commercial-real-estate-adjusts-to-fit/
4 November 2016
There are 5.6 million people in the five counties in southeast Michigan. Many of them are extremely mobile, with home, work and play environments changing rapidly. Michigan cities have experienced a devastating drain of young, educated talent in recent years – with college graduates flocking to cities with more personal and professional opportunities for living a well-rounded lifestyle in engaging environments.
But now, with a market driven mostly by the millennials and, to a much lesser degree, the longer-living empty nesters giving up their family home, bookend generations are looking to return to communities like metro Detroit, Grand Rapids, Traverse City and Ann Arbor to raise families, be closer to kin and take part in Michigan’s resurgence.
With this change, more are likely are to follow, especially if there is access to cities with a sense of place, authenticity, a downtown, four-season activities and high-speed connectivity.
There is great reason to be optimistic about the current economy in Michigan. With continued movement into central cities, developers and business owners – especially those native to Michigan – are following. Michigan businesses like Carhartt, as well as transplants like Will Leather Goods and Shinola, have all opened retail stores in Midtown Detroit, for example.
In this technology-infused era, there is demand for innovation and a sense of ease to all shopping experiences. With a surge in online shopping – online sales are projected to increase by about 6 percent in 2016 – the traditional ways of thinking in retail need to evolve. In order to drive consumers to stores and shopping centers, retailers and developers need to embrace channels that consumers will find interesting, such as mobile technology, beautification, creating walkable, inviting environments, and other special features that influence whether a retail destination will sink or swim.
Consumers still want to be engaged by retailers without needing to walk into the brick and mortar stores. If retailers look beyond technological aspects already in play, they will come out smarter and be able to create synergy for payments, loyalty, marketing and advertising with consumers.
Michigan’s recovering economy and the expected substantial growth improvements in the market result in lower competition and higher returns. The need to capitalize on the areas in Michigan that once seemed undesirable and positioning organizations to revitalize these regions are ripe with opportunity. Areas such as New Center and West Village in Detroit, and Depot Town in Ypsilanti, are some that are seeing a turnaround.
With the boom in Michigan over the past couple years, the confidence to buy has grown substantially. That supports not only higher valued real estate purchasing in commercial and residential, but also lends a helping hand to owners of all sizes by allowing them the revenue to update and make the improvements necessary to stay relevant. People want to go to more glamorous states and bigger cities thinking it’s the right move, but, right now, Michigan is on the rise and the return and demand is here. With a strong auto industry and foreclosure sales dropping, the Michigan market is more attractive than ever for buying and selling for individuals and businesses.
Bridge welcomes guest columns from a diverse range of people on issues relating to Michigan and its future. The views and assertions of these writers do not necessarily reflect those of Bridge or The Center for Michigan.