Quote:
Originally Posted by mhays
It's gray from my perspective as a general contractor for towers. None of your arguments change anything.
It's possible to build the below-grade portion of a project without considering the eventual tower underway or even very clear...it's not even that unusual. For example, it's common to build the below-grade portion and then one wing of the future project, but leave the other above-grade building for later. That sounds plausible here, though it's probably not their hope.
No, Steely, a press release wouldn't change anything either.
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The tower could have been finished years ago if that's all they wanted to do was build a tower. Bedrock could have done basic apartments and a boutique hotel but they're trying to go above and beyond and push the boundaries of what can be built in Detroit.
People compare this to Chicago or other hot cities, but in those places towers like this get built all the time so much so that the market is actually competitive. Detroit isn't like those markets. Dan Gilbert is the only one building any sizable project capable of upsetting the regional market.
As reported some years ago, the Hudson's site could top $3 per square foot for apartments when the greater downtown average is like $2 to $2.20. For office space, the Hudson's could command $35 to $40 per square foot when Detroit's current average for Class A space is $26 foot (even SE Michigan overall doesn't top $30). This is all on the backdrop of occupancy rates near 100% for both residential and office space (at least pre-COVID). So no question there's unsatisfied demand for space in Detroit but what's gray is whether the Hudson's site (plus Gilberts other planned projects) will oversupply the market with new construction.
Since Dan Gilbert has a near monopoly on downtown real estate, he has no incentive to finish the tower ASAP, but there's nothing that would force him to cancel the tower altogether. In fact finishing the tower too quickly could cannibalize his current success and cause rents to fall. It has nothing to do with permits or even the overall design. It's purely because Detroit is such an underdeveloped market dealing with a handful of big players.