SOUTHFIELD, Mich. (WXYZ) — When you take a look at the commercial real estate market in metro Detroit, you will find many stressers. The office market vacancy rate it is now at 20.7%. That is an eight-year high.
And this doesn’t just impact the owners of those buildings, but surrounding buildings such as Fuddrucker’s in Southfield.
Just over seven years ago when Randy Bahoora bought the Fuddruckers in Southfield he had a business hypothesis.
“Fuddruckers is known for… we make our own bread,” said Bahoora.
“We have our never frozen beef, Angus beef.”
Lunchtime would be busy as workers from the nearby Southfield Town Center came to eat.
And for a time – it was.
Then came COVID-19.
“Lunch crowd has been total disaster for the last two to three years now,” Bahoora said.
Randy says workers who stop in mention they are working often from home — shrinking his market size.
7 Action News reached out to the leasing office and did not hear back, but as you can see on the Southfield Town Center website there are vacancies listed for rent.
“We’re still not sure yet how back to the office is going to work,” said Sandy Baruah, CEO of the Detroit Regional Chamber.
He says as leases expire in coming years, we will understand the impact of the pandemic on commercial real estate in metro Detroit.
The chamber shared research that shows when leases expire, large office users are taking advantage of remote capabilities by moving to smaller spaces. The Southfield, Troy and Farmington Hills office submarkets have been hit the hardest.
The three submarkets alone added over 1 million square feet of available space to the market during the first quarter of 2023.
Still, Baruah says there are areas of optimism.
“My level of conficence in commercial real estate is high. When you think about industrial – where manufacturing or logistics – the demand is very high,” said Baruah.
“Downtown Class A real estate there is still a demand,” Baruah said.
“Now, the class B and C buildings, I think those are going to be challenges.”
This could mean trouble for certain communities when and if values decrease, impacting tax assessments.
At Fuddruckers, Randy Bahoora is working to over come those challenges within his business by offering specials to attract a dinner crowd and families.
“Hopefully whoever is watching this can come support us because we can use all the help we can get,” Bahoora said.
DETROIT (WXYZ) — The city of Detroit is working to hold developers accountable for leaving commercial buildings in disrepair.
In the last few weeks, the city brought about four lawsuits against developers Dennis Kefallinos and Julian Kefallinos with Southend Development Group and JDK Investments. The lawsuits are in reference to a church on Grand River Ave., a theater on Kelly Rd., a building on Wabash St., and a former hospital on 20th St.
The city says the lawsuits are a part of Mayor Mike Duggan’s Blight to Beauty initiative.
“This is not a situation where these are buildings in partial development. This is not a situation where we have been made aware that the owner of the property is engaged in a very sophisticated real estate identification process,” said Corporation Counsel Conrad Mallett. “These buildings are on what we call the M-100 list. These are buildings that we believe based on the lack of structural integrity, need to be demolished.”
Mallett says the city has brought litigation against the Kefallinos before.
“This is simply a situation where we have people holding properties, holding it in a condition that is injurious to the health and safety of people who live in the neighborhood and are really waiting for a moment where based on the progress the city has made, which by the way they’re holding back, but based on the progress the city is making for them to get a higher price for which they paid,” Mallett added.
The city provided documents showing they’ve issued several emergency correction orders on the Kefallinos properties over the course of the last few years but say the properties are still not maintained in accordance with city ordinances.
Kathy Schneider lives near the former hospital on 20th St.
“My building was a Mercantile, turn of the century department store. We had some lofts up on the second and third floor,” said Schnieder. “I have been here 24 years. I raised my kids here, brought my daughter home from the hospital here so they were raised in this environment.”
Schneider says there hasn’t been a lot of progress on the former hospital since she’s lived in the area.
“It looks like it’s coming apart. I think people are taking metal off. I’m not exactly sure but I really hope to see something be developed from that because that’s a good chunk of land,” said Schneider. “I think the city is vibrant. I think it’s alive. There’s so many great potential developments and I’ve had my fingers crossed for all of them.”
The city says the developers now have 21 days to respond from the date the complaints were filed. 7 Action News reached out to Kefallinos for comment multiple times Monday but did not hear back.
Mallett says the four lawsuits are just the tip of the iceberg. The city also recently sued Perfecting Church for failing to move development forward on a church. Mallett says with the help of seven additional attorneys, which the city was able to hire through the use of American Rescue Plan dollars, at least 17 more lawsuits are in progress.
The city also plans to soon begin bringing similar litigation against residential property owners. Over the course of Mayor Mike Duggan’s time in office, the city has begun demolishing a number of blighted residential properties.
“What we want by bringing these lawsuits is for the owner to accept responsibility, demolish the building and bring them, have that vacant space properly maintained until some more productive use of that land can be made,” said Mallett.
Mallett says the developers could lose their property to the city through the court process. If that were the outcome, Mallett says the city would demolish the buildings, maintain ownership of the property and sue the developer for the cost of the demolition.
(CBS DETROIT) – The city of Detroit announced the launch of the Second-Floor Residential Grant Program, which will reimburse property owners up to $10,000 to convert vacant second-floor commercial spaces into affordable housing.
The program, a partnership between the city’s Housing & Revitalization Department (HRD) and the Southwest Detroit Business Association, is targeting affordable housing in Southwest Detroit.
Property owners can apply by 5 p.m. on March 31.
Officials say the project is funded by HRD as part of the $203 million housing plan announced back in July.
“The City of Detroit is always looking for ways to create affordable housing and opportunities for Detroiters,” HRD director Julie Schneider said in . “This great program does both, by converting unused space into affordable places for Detroiters to live, reinvigorating our commercial corridors and helping to stabilize income for local property owners.”
Officials say eligible properties must be unused and located above ground-floor commercial space. They must also be located within the West Vernor Highway from Woodmere Street to 15th Street; Springwells Street from West Vernor to the West Fisher Service Drive; Junction from Michigan Avenue to Konkel Steet; and Bagley Avenue from the West Fisher Service Drive to 25th Street.
The city expects to have 24 affordable housing units with rental rates ranging from $780 to $1,250 for residents earning between 50% and 80% of area median income.
“We are excited for our continued partnership with the City of Detroit, bringing economic development opportunities to Southwest Detroit and simultaneously increasing access to safe and affordable housing for Detroit residents,” Laura Chavez-Wazeerud-Din, SDBA vice president of Programs and Compliance, said in a press release.
For more information, visit www.southwestdetroit.com.
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Ford F-150 Lightning trucks manufactured at the Rouge Electric Vehicle Center in Dearborn Michigan.
Courtesy: Ford Motor Co.
DETROIT – About 65% of Ford Motor’s dealers have agreed to sell electric vehicles as the company invests billions to expand production and sales of the battery-powered cars and trucks, CEO Jim Farley said Monday.
About 1,920 of Ford’s nearly 3,000 dealers in the U.S. agreed to sell EVs, according to Farley. He said roughly 80% of those dealers opted for the higher level of investment for EVs.
Ford offered its dealers the option to become “EV-certified” under one of two programs — with expected investments of $500,000 or $1.2 million. Dealers in the higher tier, which carries upfront costs of $900,000, receive “elite” certification and be allocated more EVs.
Ford, unlike crosstown rival General Motors, is allowing dealers to opt out of selling EVs and continue to sell the company’s cars. GM has offered buyouts to Buick and Cadillac dealers that don’t want to invest to sell EVs.
Dealers who decided not to invest in EVs may do so when Ford reopens the certification process in 2027.
“We think that the EV adoption in the U.S. will take time, so we wanted to give dealers a chance to come back,” Farley said during an Automotive News conference.
Ford’s plans to sell EVs have been a point of contention since the company split off its all-electric vehicle business earlier this year into a separate division known as Model e. Farley said the automaker and its dealers needed to lower costs, increase profits and deliver better, more consistent customer sales experiences.
Farley on Monday also reiterated that a direct-sales model is estimated to be thousands of dollars cheaper for the automaker than the auto industry’s traditional franchised system.
Wall Street analysts have largely viewed direct-to-consumer sales as a benefit to optimize profit. However, there have been growing pains for Tesla, which uses the sales model, when it comes to servicing its vehicles.
Ford’s current lineup of all-electric vehicles includes the Ford F-150 Lightning pickup, Mustang Mach-E crossover and e-Transit van. The automaker is expected to release a litany of other EVs globally under a plan to invest tens of billion of dollars in the technologies by 2026.
DEXTER, Mich. (WXYZ) — Michigan State Police troopers want to stop I-94 crashes that involve commercial trucks.
They are joining forces with police departments in both Illinois and Indiana for an effort called “Eyes on 94.”
Over the next four days, troopers will watch the freeway like a hawk, looking out for violations committed by commercial drivers.
“This coordinated operation is an effort to increase awareness by means of high visibility enforcement on the I-94 freeway, which is prone to weather-related crashes involving interstate commercial vehicle drivers this time of year,” MSP said in a press release.
“In my opinion, you got a lot of unsafe drivers out here,” Anthony Wallin said.
Wallin has been driving trucks across state lines for 40 years. He’s seen his fair share of terrible wrecks.
“Lots of them involving big trucks and a couple involving bulldozers, but it can be very heartbreaking what you see out there,” Wallin said.
Eyes on 94 is aimed at preventing exactly what Wallin is talking about
“This is the first of hearing of it,” said Donny Sanders, who just started driving trucks. “They are out here all the time anyway.”
Wallin says he got the heads up about the heavy enforcement from his employer.
“It’s no problem with me as long as you got your log books in order,” Wallin said. “I’m not breaking any laws out here, I am out here making a living for my wife.”
Troopers will focus their enforcement on violations most likely to contribute to a crash. Those violations include but are not limited to distracted driving, following too close, improper passing, speeding, improper lane use and failure to slow down or move over.
“Things happen out here, you just have to be alert,” Wallin said. “Pay attention to what you’re doing and you should be fine.”
DETROIT – A first of its kind investment to put a dent in a major problem in metro Detroit.
“We’ve talked to people from all over the state,” said Chad Benson, rental development director for the Michigan State Housing Development Authority. “From the UP, all the way down to the southern parts of the state and rural areas and in more urban areas, the issue is the same.”
It’s called missing middle housing, which generally represents homes, townhouses, or multi-family apartment buildings for families making between $50,000 and $83,000 a year. Michigan’s median income last year, according to Census data, was $3,000 squarely in the middle of the missing middle.
MSHDA opened the tap on $50 million in federal money from the American Rescue Plan Act for developers to start building new homes. The money is meant to offset construction costs to keep rent or mortgages low for those families for 10 years.
“We’re really hopeful that it’s going to, you know, go a long ways in order to help sort of alleviate the burden that you know, missing middle households are having in terms of finding units that they can afford to rent or buy,” Benson said.
For now, just $15 million is being made available for developers, with more to come next spring but it will be a waiting game for places to be built. The plan is also to set aside 30% of the total money to be used in rural communities.
The money is first come, first serve, according to MSHDA. Developers can apply online here at MSHDA-MissingMiddle@michigan.gov.
Copyright 2022 by WDIV ClickOnDetroit – All rights reserved.
DETROIT – Walking into the North American International Auto Show for the first time since January 2019, you can’t help but notice that the auto industry has come a long way since the last auto show in Detroit. Specifically on the development of electric vehicles.
After getting a look at some of the electric vehicles on the auto show floor, I came across a display area called Autel. It looked clean and futuristic. Perhaps a glimpse of what’s to come in the coming decades. I stopped to talk to some of the experts on the floor to learn more about what Autel is.
Autel stands for automotive intelligence. The company has been making automotive diagnostic tools for the past 18 years.
On display, they had home chargers and commercial ones. The home chargers were much smaller and take longer to charge your car. About 6 hours overnight can get you a full charge and they start out at around $500. These would likely be placed in your garage.
The commercial ones are being marketed to places like grocery stores, gas stations, car dealerships and apartment complexes. On display, they had a small prototype of what parking lots could look like at these facilities.
The commercial chargers start at around $30,000 and will get you around 60 kilowatts. But commercial places will likely want to purchase ones that have around 240 kilowatts, which can fully charge an electric vehicle in about 30 mins. This way people can park their cars, plug in, grab a few groceries or snacks and then be on their way with a full charge. Those cost about $67,000.
If you’re headed to the Detroit Auto Show, I recommend checking out the Autel display. A pretty cool glimpse of what our future could look like!
Copyright 2022 by WDIV ClickOnDetroit – All rights reserved.