Corktown real estate shows no sign of cooling
Detroit — Real estate prices shifted into overdrive in historic Corktown and surrounding neighborhoods as soon as news leaked that Ford Motor Co. wanted to buy the long-dead Michigan Central Depot. And they show no sign of slowing a year later, according to public property records.
Next week — March 19 to be exact — marks the one-year anniversary of the first media reports that the Dearborn automaker was in talks to buy the former train station, empty since 1988, along with multiple other Corktown properties totaling 1.2 million square feet. Ford's aim is use the city's oldest neighborhood as the hub for development of mobility, autonomy and electrification technologies expected to radically alter the auto industry.
By the time Ford officially bought the train station in June for $90 million and announced plans for a $740 million renovation for its multiple properties, Corktown-area real estate prices had already spiked, public records show. And it wasn't just Corktown, which is small in size, but the entire 48216 ZIP code, which includes parts of the Hubbard Richard/Mexicantown, North Corktown and Core City neighborhoods.
"I remember even the news of the potential Ford deal changed what people became interested in," said Tony Formosa, whose family has invested in Corktown properties for three generations.
"Before, everyone really considered the old Tiger Stadium as the center, but now it's the Ford train station. But Ford, you know, it's a global carmaker, and that's different than having another small business open."
As of February, residential real estate prices in the 48216 ZIP code had risen 14 percent to a median sale price of $137,250, compared to $119,500 in March 2018, according to Realcomp II Ltd., which is Michigan's largest real-estate listing service. By comparison, home and condominium prices increased less than 1 percent annually from 2016 to the start of 2018, Realcomp II data shows.
The number of sales also began to rise by the end of last March, data shows. In the month before news of the Central Depot sales leaked, the area was in a four-month lull. Only 11 homes sold in January 2018. Since last March, an average of 29 residential units have sold each month, according to RealComp II.
The official boundaries of Corktown, the city's oldest neighborhood, are relatively small and when a home or condominium becomes available, prices are climbing, several real estate agents say. A historic house on Leverette Street sold for $433,000 in September. The same house sold for $145,000 in December 2017, public records show, but that owner did major renovations before selling it last year.
At the time of the Leverette home sale, Corktown-based Realtor Ryan Cooley of O'Connor Real Estate was trying to sell a historic home in the nearby Woodbridge neighborhood. That home and the one on Leverette were similar in size and condition, he said.
"Houses in Woodbridge and Corktown usually sell for similar prices," he said. That appears to be changing. The Woodbridge home sold for $360,000 — $73,000 less than the Corktown home.
A potential new six-story apartment building on an empty patch of land in North Corktown shows that developers are finding nearby properties attractive. The deal is not yet sealed, but local developer Steven Rubinstein is working on the mixed-use development that calls for first-floor commercial space and more than 100 apartments. The location would be on an empty stretch on Pine Street between Trumbull and Cochrane. Rubinstein declined comment because the potential deal has not been finalized.
Commercial real estate prices have jumped, too, but it's harder to say how much because some prices have not yet been publicly disclosed — and because of the wide range of buildings sold. Major developers like billionaire Dan Gilbert, as well as small entrepreneurs, have purchased properties beyond Corktown.
In December, Gilbert's Bedrock company bought a five-story 138,000-square-foot warehouse at 1800 18th St. for an undisclosed price. The building is in the shadow of the train station, just west of the train viaduct on Vernor. The viaduct is often considered the dividing line between the Corktown and Hubbard Richard/Mexicantown neighborhoods.
The company cited the great potential of the property, given its proximity to the Ford developments. Plans for the warehouse have not been disclosed.
Last month, Ponyride, the small-business incubator that's helped foster dozens of entrepreneurs and artists, sold its Corktown building at 1401 Vermont for $3.3 million and will keep the nonprofit going in the nearby Core City neighborhood.
Phil Cooley, who co-founded the Ponyride organization, had purchased 30,000-square-foot building in 2011 in a bank foreclosure for $100,000. He and his wife Kate Bordine put in hundreds of hours to fix it up.
Cooley said his listing price went up after the Ford deal. The sale came in at nearly $118 per square foot, compared to the pre-Ford asking price of less than $100 per square foot.
Local developer Marc Nassif, who purchased the former Ponyride building, said he plans to renovate it and charge market rents for the space.
A local successful restaurateur has cited the Ford deal for its October purchase of Michigan Avenue building, about 1½ miles from the train station
Dave Kwiatkowski of the Detroit Optimist Society, which is the parent company for the Sugar House, The Peterboro, Honest John's and Bad Luck Bar, bought an empty two-story building near Michigan and Clark avenues for $111,000 in the county tax foreclosure, record shows. Plans call for a Korean bar and restaurant.
Kwiatkowski has cited Ford's plan to use as Michigan Avenue as its "transportation invention corridor" — from Corktown to Dearborn to Willow Run and Ann Arbor — as the major factor in his purchase.
Indications of how heated the Corktown market is can be seen at the new townhouses being built at the former Tiger Stadium site at Michigan and Trumbull. The units have sold so far from $484,540 to $507,150, public records show.
Long-time property Corktown developer Formosa doesn't see an end in sight, especially after Ford opens the doors of Central Depot in 2022 with 5,000 people expected to work there.
"I can't even predict how things will be when it opens."