Top Three Submarkets Seeing Most New Apartment Construction
Downtown, Midtown Dominate
Detroit’s re-emergence over the past few years is perhaps most visible in the large amount of multifamily and other commercial development taking place in Downtown and Midtown.
Once largely abandoned, the area is steadily regenerating as its auto-based economy recovers. Nearly 1,500 new apartment units have been added since 2014 with a robust construction pipeline of thousands of more units underway.
Auto-tech has emerged as a key growth area. And the combination of affordable office space, coupled with population growth across the Detroit metro, has proven enticing for major companies such as Microsoft, which has plans to move into Campus Martius in summer 2018. Reassured by net migration and newer employment prospects, multifamily developers are busy building new living space.
Approximately 15 new multifamily projects totaling more than 1,840 units are under construction here. Such construction levels have not been seen in Downtown and Midtown Detroit in well over two decades.
More importantly, development here shows no signs of stopping with an additional 35 multifamily properties proposed in the development pipeline.
Macomb County Not Far Behind
However, while Downtown/Midtown has attracted the majority of multifamily development in the metro, a few other submarkets are not too far behind.
Macomb County, largely suburban in nature, accounts for the largest apartment inventory in the Detroit metro. At midyear 2017, six new apartment properties totaling nearly 1,200 units were underway. Macomb County’s appeals to renters who don’t mind a longer commute for the sake of lower rents. At $840/month, apartment rents in Macomb County are among the lowest in the metro and roughly 30% less than those found in Downtown and Midtown.
The recent completion of General Motor’s Warren Tech Center is expected to increase employment in the area, another contributing factor to the uptick in apartment construction.
NW Oakland Off the Beaten Path
The next submarket with the largest apartment construction pipeline underway is NW Oakland County with four properties totaling around 500 units with another four development projects proposed.
While Downtown/Midtown and Macomb County are obvious choices for new apartment construction, NW Oakland County is not. What this submarket does offer is a steady pool of Baby Boomers and Empty Nesters content with being far away from downtown. The rural nature of the submarket, accompanied by some of the lowest rents in the metro, are the keys to the continued steady demand reflected in the submarket’s apartment vacancy below 2%.
Newer inventory here tends to be almost exclusively garden style, a far cry from the luxury midrise apartments sprouting all throughout Downtown and Midtown. But for renters seeking to escape the rising costs of rents Downtown and Midtown, suburban options such as NW Oakland County offer an appealing choice.
