HEARTLAND SNAPSHOT, NOVEMBER 2004

Detroit Retail Market

The Detroit retail market is seeing hot growth in banking center and restaurant development, according to William LaKritz, president, CEO and principal at LaKritz-Weber & Company in Southfield, Michigan. There is positioning for three new lifestyle centers in the northeast, northwest and southwest parts of the city, and there is continued development of power centers anchored by big boxes like Target and Wal-Mart.

Ford Land is developing Fairlane Green, a two-phase, 1 million-square-foot project currently undergoing final approvals. The center, located at the intersection of Interstate 94 and the M-39 Expressway in Allen Park, will be anchored by Target and OfficeMax.

Independence Marketplace, also along the M-39 Expressway in Allen Park, is under construction. The 275,000-square-foot center features Lowe’s Home Improvement Warehouse, Staples, Jo-Ann Fabrics & Crafts and Petco.

Allen Park Town Center, a 550,000-square-foot retail project at M-39 and I-94, is still in planning stages. Sam Danou is developing the center and is currently in negotiations with two department stores and a home center. Construction is set to begin fall 2005, with a summer 2006 completion.

The 26,447-square-foot Shops at Main North, which is located in the Central Business District (CBD) in Royal Oak, is also in planning stages. “This will tremendously enhance the existing CBD area with new retail, restaurants and condominium components,” LaKritz says. Tenants include Hollywood Video, Moe’s Southwest Grill and Mama Fu’s Asian House.

On the west side, Gary Jonna recently completed Woodhaven Village. Located on Allen Road, the approximately 350,000-square-foot development features a new Wal-Mart, which joins existing anchor tenants The Home Depot and Office Depot. An additional 100,000 square feet of new space will be added.

There is continued activity at M-23 and Lee Road, with a new Kohl’s, Costco Warehouse and a planned 400,000-square-foot retail center.

“Growth is 360 degrees in the Detroit suburbs — being fueled by population and housing growth because of age, job, education and income changes,” LaKritz says.

Some of the major developers in the Detroit area include Grand Sakwa, Ramco-Gershenson, Joseph Freed, Lormax Properties, Stuart Frankel Development and Taubman.

New to the Detroit retail market are National Wholesale Liquidator, Cato, The Vitamin Shoppe, Arhaus Furniture and Steve & Barry’s University Sportswear. “The food category is hot, with Carvel, Cold Stone Creamery, Noodles & Company, Moe’s Southwest Grill, Jimmy John’s Gourmet Sandwiches, Mama Fu’s Asian House, Fleming’s Steakhouse and Montana’s Cookhouse currently looking for sites in the area,” he says. IKEA and The Fresh Market are also scouting sites.

“One area to watch out for in Detroit is US-23 North between Ann Arbor and Livingston County because of its central location to four major Michigan cities,” he says. “Development along the M-14 corridor between Detroit and Ann Arbor is also booming due to high income levels and the presence of the University of Michigan.” US-23 South between Ann Arbor and Milan will have a new Toyota plant and a major housing boom, he says.

Interstate 275 downriver, Interstate 75 North and Interstate 96 West to Lansing are also areas to keep an eye on.

There is continued housing and retail growth in Detroit, and buyouts and closings, such as Frank’s Nurseries and Kmart, are providing opportunities for developers, according to LaKritz. “Consolidation and relocations are causing duplications for retailers and are providing a good stock of excess property space,” he says. “Land costs are high, but they seem to be leveling.”

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