Detroit Retail: Leasing Activity Gains Momentum


Similar to the renewed fortunes of the Big Three automakers, retailers are experiencing a resurgence in retail activity and profitability in Southeast Michigan. With the influx of retailers leasing second-generation space once occupied by the likes of Farmer Jack, Linens ’n Things, Borders and Circuit City, demand is beginning to outpace inventory in the stronger retail submarkets. The pendulum is starting to swing toward the landlords as the second-generation opportunities become limited.

In the weaker trade areas, tenants can still negotiate what could be considered below-market rents along with some attractive tenant improvement allowances. Over the past two years, the means of expansion for most junior anchors has been the backfilling of existing boxes. The decrease in inventory of these boxes is beginning to spur developers to once again consider new ground-up development opportunities.


Active new development projects include the Gateway Marketplace located at the southeast corner of Woodward Avenue and Eight Mile Road in Detroit. Spearheaded by Redico, Gateway Marketplace, which will be anchored by Meijer, Marshalls and K&G, plans to open in the spring of 2013. Other new developments include Costco in Pittsfield Township and Kohls at the new Walmart Supercenter in Livonia, Michigan as part of the Livonia Mall redevelopment.

Similar to the Livonia Mall redevelopment, Novi Town Center has demolished the former Mervyns to allow for a 150,000-square-foot Walmart Supercenter. There are also extensive improvements underway to the remaining portions of the shopping center while at the same time improving the tenant mix.

Walmart is spurring more retail activity in the White Lake market with its expansion of an existing store to a supercenter and the attraction of JoAnn Stores and Bed Bath & Beyond to fill the once vacant Farmer Jack.

Large developments under discussion include a 500,000-square-foot shopping center at 7 Mile and Haggerty roads in Northville Township by Schostak Brothers & Co., as well as a 14-acre planned development at 26 Mile and Van Dyke in Shelby Township by the Moceri Co. Both new developments are in the initial planning and marketing stages.

Walmart, Meijer, Big Lots, Ollie’s Bargain Outlets, Salvation Army, Goodwill Industries and Five Below continue to seek new locations and capitalize on the shift toward discount and affordable goods.

Other national retailers seeking or opening locations include Dick’s Sporting Goods, LA Fitness, Hobby Lobby, JoAnn, TJX Cos., Sports Authority, Casual Male, Ashley Stewart, ULTA, Rue 21, Dots, Performance Bike, Carters and Aspen Dental.

Auto parts retailers such as Advance Auto, O’Reilly’s and Auto Zone, as well as the dollar store chains (Dollar Tree, Family Dollar and Dollar General) continue to open multiple units throughout the market.

We continue to see a strong demand for metro Detroit sites from food retailers, including casual-based theme restaurants with a liquor license, fast casual restaurants, fast food users and local family diners. This trend has sparked discussions of many new development opportunities in the 10,000 to 30,000 square foot range.

— Tony Schmitt and Jack Uhazie are brokers with Mid-America Real Estate-Michigan in West Bloomfield.

©2012 France Media, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.

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