The Wurlitzer

The Wurlitzer project revives a 12 story historic tower, converting its use from office and manufacturing to Detroit’s most premium residential and restaurant space. The ambitious project, in tandem with two others, will complete the Harmonie Park district and fill a vital linkage between the revived Woodward Corridor, the stadium district and Greektown and the new county jail-site development.

Paige Shesterkin | MUP + REDC Stewart Hayes | MBA Brian Rassel | MS + MBA Table of Contents

Development Introduction 3 Project Inspiration & Vision 4 The Market 5 The Path of Growth 6 Neighborhood Amenities 7

Design 8-10 Restaurant 8 Floor Plans 9 Parking 10

Financials 11-17 History Comparable Rentals 11 The Wurlitzer building was completed in 1926 to be the Renaissance Comparable Rentals (cont) 12 Gross Potential Rent 13 Revival-styled Detroit office and sales headquarters of the thriving Operating Income 14 Wurlitzer Company, which was a diversified instrument and jukebox Sources and Uses 15 company most famous for its organs that accompanied silent films. At the Salvage Value 16 Value Creation 17 time the building was complete, the Detroit News described it as “a Sensitivity and Return 18 structure complete in every detail and entirely worthy of the art to which it will be devoted.” The building was situated within Harmonie Park, Stakeholder & Ownership Struct. 19 Detroit’s historic German district and among its oldest music districts. Circle of Risks 20 The Wurlitzer building fell into disrepair in the late 1970’s and early Contact 21 1980’s, finally becoming totally vacant in 1982 under absentee ownership that saw no re-investment in the building and the shutdown of even basic Appendix heating services. Today its steel reinforced structure stands proudly, and Team Resumes 22-24 its terra-cotta façade still comely, despite three decades of decay and very Project SWOT 25 certain dilapidation. Detroit would like to see the building revived, as would its nearest neighbor, a coffee shop offering the purchase incentive

in the photograph below. 2

Development Introduction The Wurlitzer Development Corp. is seeking investors, builders and community leaders to join the effort to revitalize an Detroit skyscraper into a luxury residential rental building and be a part of one of the few remaining iconic in-fill opportunities for a burgeoning premium end of the market.

• 24 Premium Units • 2 Junior Penthouses • 1 double-height full floor Penthouse

• 1 new restaurant

• 1 complete street

• 1 strong improvement for Harmonie Park

• $8.7M redevelopment • Projected 22% IRR

3 Project Inspiration and Vision

PROJECT INSPIRATION As Detroit’s young talent that lives downtown matures, what kind of apartment will they want as their income rises that still allows them to live, work & play in the city?

SUMMARY BUILDING PITCH The building will be remodeled for a more affluent, but still young and progressive consumer. Ideally, we would love to rent, and eventually sell, to a player or two on one of the Detroit sports teams to create buzz and cache. We will focus on promoting the building’s proximity to all of the events in Detroit, it’s historical character and Renaissance revival architecture, while focusing on design and finishes.

KEY SELLING POINTS TARGET RENTERS PROXIMITY. YOUNG. CHARACTER. HENRYs (High earning, not rich yet) QUALITY. PROGRESSIVE.

SELLING POINTS ELABORATION Proximity Character Quality

The building is situated next to the We want to play up the historical The finishes in the building will be M1 rail, the stadiums, the Opera nature of the building, taking cues very nice, and very clean. The quality House and the Detroit Athletic Club. from the Renaissance Revival will be high without being glitzy. It is a short walk to major architecture, and also the musical employers, and great restaurants & character of the Harmony Park bars. neighborhood.

4 The Market

Through major market indicators, we have concluded that the Wurlitzer redevelopment project presents an ideal opportunity to leverage extremely encouraging market data and trends. Employment in downtown Detroit has been bolstered by both large firms such as Quicken Loans, Blue Cross Blue Shield, GM, DTE Energy, and smaller start-ups. We expect job creation in the CBD to continue through the relocation of firms from the suburbs, but also through the emergence of a new diversified industry base seen in areas like Tech Town. The largest gain is expected in relatively higher-paying professional and business service sectors, which bodes well for upper-tier rentals in highly desirable neighborhoods. With attractive vacancy rates of approximately four percent for the Detroit apartment market, demand is far outpacing supply, even with several new loft and apartment projects coming on board in the next few years. Job growth will continue to drive renter demand, even with an future increase in apartment inventory. While historically low interest rates incentivize home ownership, a forecasted increase in rates coupled with the desired flexibility of young professionals will continue to drive rental demand.

27,000 4.3 600

{Jobs created in 2013} {% Apartment Vacancy} {Units Completed in 2013}

*Source: Marcus & Millichap Market Research for Detroit, Michigan, 2013. The Path of Growth

The David Whitney - $82 million Z-Shaped Parking Lot – 535,000 SF Restaurant, hotel, apartments An infectious wave of change Complete, 1st Floor Retail & Parking in the CBD

Mini Campus Martius – “Western Hudson’s Quarter – Retail, gym, Downtown” Park with food trucks apartments, outdoor art & music

Capitol Park – New apartments and offices with 1st floor retail The Globe Building – $12.8 million Sporting activity, kid’s center

Downtown Detroit is currently experiencing one of the largest urban redevelopment booms in the country. M1 Rail – 2013 Broke Ground Future suburb linkage, 3.3 miles Several retail, office, and apartment developments have come on-line in the past few years , as more young Monroe Block - $111 million urban professionals and empty nesters continue to flock 16-story office, parking, retail to downtown Detroit. This renaissance has seen large corporations like Compuware, DTE, Quicken Loans, and Blue Cross Blue Shield move their headquarters downtown. The momentum realized by the completed projects has been a springboard for several more redevelopment plans and further gentrification. Neighborhood Amenities

Walk89 Score Design: The Restaurant

Echoing the Harmonie Park legacy, the first floor of the Wurlitzer building intends to have restaurant, bar and live music programming. This is complementary to the existing programming on Broadway. The new restaurant would serve patrons of the Detroit Opera House, Tigers’ and Lions’ games, and other entertainment options in the area. Furthermore, the restaurant would be a new destination for Detroit’s dining scene.

Atmosphere that is nostalgic of the Wurlitzer’s time period. Live music and entertainment venue to add another destination to Detroit’s nightlife. Design: 3-9 Floor Plans Luxury Unit Finishes UNIT A UNIT B 1 BR option

BR

26 units make up the Living Living Walk-in Wurlitzer. Each floor is a space + space + different combination of kitchen kitchen units ranging from 1 BR, 1 Bath to the largest 3 BR, 3 Bathroom Bath.

All units in the Wurlitzer come with spacious living areas that accommodate entertaining or adaptable Living office space. Additionally, Bath Bath space + all units have walk-in kitchen closets that are conveniently attached to BR BR the unit’s bathroom.

BR BR

Unit # SF Bath 1 BR + 1 Bath 7 610 Bath

2 BR + 1 Bath 9 1,186 STAIRS 2 BR + 2 Bath 7 1,254 ELEVATOR

3 BR + 2 Bath 2 1,776

STAIRS 3 BR + 3 Bath 1 3,080 Parking

Z-Garage | Library & Gratiot

Parking for the Wurlitzer residents and restaurant patrons will be located at the new Z-garage. The garage is a short 5 minute block to the Wurlitzer. The Wurlitzer will have 25 standard monthly parking permits, for restaurant patrons, and 25 off-peak monthly parking permits, for residents, which can only be used from 3 p.m. to 9 a.m. 24 hr Valet service is provided for residents and restaurant patrons. Financials: Comparable Rents The Wurlitzer will compete with these comparable buildings, but aims to offer first class finishes in arguably Detroit’s best location. We believe our target demographic (HENRY’S) would be willing to pay higher rents for our unparalleled level of luxury and service. Broderick Tower Kales Building Village Green Lofts of Merchant Row

Renovated historic high rise Renovated historic high rise High rise apartment Renovated high rise apartment apartments apartments complex complex 34 stories 19 stories 28 stories 10 stories

Valet Parking (=) Connected Parking (+$.05) Connected Parking (+.05) Valet Parking (=) Gas & Water Included (+$.04) Gym & Business Center (+$.09) Gym, Pool, Entertainment Stainless Steel Appliances (=) Stainless Steel Appliances (=) Stainless Steel Appliances (=) Facility (+$.12) Secured Entry (=) Secured Entry (=) Secured Entry (=) Secured Entry (=) Gym (+$.03) Washer/Dryer in unit (=) Washer/Dryer in unit (=)

Amenities discount** (-$.04)/SF (-$.14)/SF ($-.17)/SF ($-.03)/SF

Studio: $980, $1.93/SF 1B 1Ba: $1500, $1.84/SF 1B 1Ba: $1095, $1.45/SF Studio: $1100, $1.34 2B 1Ba: $1645, $1.78/SF 2B 2Ba: $2000, $1.70/SF 2B 2Ba: $1550, $1.41/SF 1B 1Ba: $1220, $1.38 2B 1.5Ba: $2050, $1.64/SF 1B 1Ba: $1995, $2.47/SF 2B 2Ba: $2065, $1.38/SF 1B 1Ba: $1795, $1.27 3B PH: $3740, $1.77/SF (furnished) 2B 2Ba: $1715, $1.26 *Comparable properties all within “a driver and a wedge” of subject property. ** Amenities adjustment only quantifies those amenities the Wurlitzer will not offer, but does not attempt to quantify differences such as location, style, prestige or hard amenities that are unique that the Wurlitzer will offer. Financials: Comparable Rents (Continued)

Out-of-State Comparable Emerging Markets

Pittsburgh, PA Baltimore, MD Milwaukee, WI Cleveland, OH

River Vue Apartments Sutton Place Apartments The North End Stonebridge Tower

Studio: $1450, $2.41/SF Studio: $1292, $2.37/SF Studio: $1390, $2.05/SF 1B 1Ba: $1060, $1.06/SF 1B 1Ba: $2075, $2.18/SF 1B 1Ba: $1420, $2.18/SF 1B 1Ba: $1835, $1.86/SF 2B 2Ba: $1368, $1.30/SF 2B 1Ba: $2559, $2.23/SF 2B 2Ba: $1936, $2.08/SF 2B 2Ba: $2135, $1.84/SF PHouse: $2029, $1.01/SF 2B PH: $3085, $2.05/SF 3B 3Ba: $2725, $2.03/SF

Restaurant Comparable Rents 1) 1325 Broadway -$15.75/NNN Although these are on-market comps, we found these ground 2) 751 Griswold - $18.50/NNN floor retail listings helpful in arriving at a reasonable rental

amount for our retail space. We 5 3) 1525 Woodward - $20.00/NNN based our assumption of 3 1 W $15/SF/NNN on the average of 4) 1201 Woodward - $19.50/Mgross these five listings in the immediate area ($17.75/SF) less a 15% 4 5) 10 Witherell - $15.00/NNN negotiation premium.

2 Financials: Gross Potential Rents

Base Case Rent Roll Unit Mix Number Rentable SF (per unit) Rentable SF (total) Rental Rate (monthly) Rental Rate (per SF) Year 1 Year 2 Year 3 1 Bed 1 Bath 7 610 4,270 $1,281 $2.10 $107,604 $110,294 $113,051 2 Bed 1 Bath 9 1,166 10,494 $2,332 $2.00 $251,856 $258,152 $264,606 2 Bed 2 Bath 7 1,254 8,778 $2,508 $2.00 $210,672 $215,939 $221,337 3 Bed 2 Bath JPH 2 1,776 3,552 $3,730 $2.10 $89,510 $91,748 $94,042 Assumptions 3 Bed 3 Bath PH 1 3,030 3,030 $6,666 $2.20 $79,992 $81,992 $84,042 • Base Rent Rates Total Residential 26 30,124 $739,634 $758,125 $777,078 • Assumes 2.5% rental Ground Floor Restaurant 1 6,362 6,362 $7,953 $15/NNN per month $95,430 $97,816 $100,261 growth each year 2nd Floor Restaurant Kitchen 1 2,500 2,500 $3,125 $15/NNN per month $37,500 $38,438 $39,398 Billboard $15K per month $180,000 $184,500 $189,113 Gross Potential Rent $1,052,564 $1,078,879 $1,105,850

Optimistic Rent Roll Unit Mix Number Rentable SF (per unit) Rentable SF (total) Rental Rate (monthly) Rental Rate (per SF) Year 1 Year 2 Year 3 1 Bed 1 Bath 7 610 4,270 $1,409 $2.31 $118,364 $124,283 $130,497 2 Bed 1 Bath 9 1,166 10,494 $2,565 $2.20 $277,042 $290,894 $305,438 2 Bed 2 Bath 7 1,254 8,778 $2,759 $2.20 $231,739 $243,326 $255,492 3 Bed 2 Bath JPH 2 1,776 3,552 $4,103 $2.31 $98,461 $103,385 $108,554 Assumptions 3 Bed 3 Bath PH 1 3,030 3,030 $7,333 $2.42 $87,991 $92,391 $97,010 • +10% from Base Rent Rates Total Residential 26 30,124 $813,598 $854,278 $896,992 • Assumes 5% rental growth Ground Floor Restaurant 6,362 6,362 $8,748 $15/NNN per month $104,973 $110,222 $115,733 each year 2nd Floor Restaurant Kitchen 2,500 2,500 $3,438 $15/NNN per month $41,250 $43,313 $45,478 Billboard $15K per month $198,000 $207,900 $218,295 Gross Potential Rent $1,157,821 $1,215,712 $1,276,497

Pessimistic Rent Roll Unit Mix Number Rentable SF (per unit) Rentable SF (total) Rental Rate (monthly) Rental Rate (per SF) Year 1 Year 2 Year 3 1 Bed 1 Bath 7 610 4,270 $1,153 $1.89 $96,844 $96,844 $96,844 2 Bed 1 Bath 9 1,166 10,494 $2,099 $1.80 $226,670 $226,670 $226,670 Assumptions 2 Bed 2 Bath 7 1,254 8,778 $2,257 $1.80 $189,605 $189,605 $189,605 • -10% from Base Rent Rates 3 Bed 2 Bath JPH 2 1,776 3,552 $3,357 $1.89 $80,559 $80,559 $80,559 • Assumes 0% rental growth 3 Bed 3 Bath PH 1 3,030 3,030 $5,999 $1.98 $71,993 $71,993 $71,993 each year Total Residential 26 30,124 $665,671 $665,671 $665,671 Ground Floor Restaurant 6,362 6,362 $7,157 $15/NNN per month $85,887 $85,887 $85,887 2nd Floor Restaurant Kitchen 2,500 2,500 $2,813 $15/NNN per month $33,750 $33,750 $33,750 Billboard $15K per month $162,000 $162,000 $162,000 Gross Potential Rent $947,308 $947,308 $947,308 Financials: Operating Income

3-Year Operating Statement (w/ Base Case Rent Roll) Year 1 per/SF Year 2 per/Sf Year 3 per/SF Gross Potential Rent $ 1,052,564 $ 20.94 $ 1,078,879 $ 21.46 $ 1,105,850 $ 22.00

Expense Reimbursements Real Estate Taxes $ 35,448 $ 0.71 $ 36,334 $ 0.72 $ 37,243 $ 0.74 Insurance $ 2,659 $ 0.05 $ 2,725 $ 0.05 $ 2,794 $ 0.06 CAM $ 6,203 $ 0.12 $ 6,358 $ 0.13 $ 6,517 $ 0.13 Total Expense Reimbursements $ 44,310 $ 0.88 $ 45,418 $ 0.90 $ 46,553 $ 0.93

Gross Potential Income $ 1,096,874 $ 21.82 $ 1,124,296 $ 22.37 $ 1,152,404 $ 22.93 Vacancy Factor (5% GPR) $ (52,628) $ (1.05) $ (53,944) $ (1.07) $ (55,293) $ (1.10) Effective Gross Income $ 1,044,246 $ 20.77 $ 1,070,352 $ 21.29 $ 1,097,111 $ 21.83

Operating Expenses Real Estate Taxes $ 150,798 $ 3.00 $ 154,568 $ 3.08 $ 158,432 $ 3.15 Insurance $ 15,080 $ 0.30 $ 15,457 $ 0.31 $ 15,843 $ 0.32 CAM $ 35,186 $ 0.70 $ 36,066 $ 0.72 $ 36,968 $ 0.74 Management Fee (3% EGI) $ 31,327 $ 0.62 $ 32,111 $ 0.64 $ 32,913 $ 0.65 Ground Lease With City $ 28,670 $ 0.57 $ 29,387 $ 0.58 $ 30,122 $ 0.60 Total Operating Expenses $ 261,062 $ 5.19 $ 267,588 $ 5.32 $ 274,278 $ 5.46

Net Operating Income $ 783,185 $ 15.58 $ 802,764 $ 15.97 $ 822,833 $ 16.37 Reserves for Roof $ (7,540) $ (0.15) $ (7,728) $ (0.15) $ (7,922) $ (0.16) Debt Service $ (501,894) $ (9.98) $ (501,894) $ (9.98) $ (501,894) $ (9.98) Debt terms: 8%, 30 years, no Before Tax Cash Flow $ 273,751 $ 5.45 $ 293,142 $ 5.83 $ 313,018 $ 6.23 prepayment penalty Before Tax ROI (Cash on Cash) 8.6% 9.3% 9.9%

Plus Principal Reduction $ 47,615 $ 51,568 $ 55,848 Less Depreciation $ (307,871) $ (307,871) $ (307,871) Less Interest $ (454,279) $ (450,327) $ (446,047) Taxable Income (Loss) $ (440,784) $ (413,488) $ (385,052) Taxes (Savings) @ 35% $ 154,275 $ 144,721 $ 134,768 After Tax Cash Flow $ 428,025 $ 437,863 $ 447,786 After Tax ROI 13.5% 13.8% 14.1%

Return on Cost 8.8% 9.1% 9.3% Financials: Sources and Uses

Construction Costs Total SF Cost Per SF Total Cost % Sources Total Amount % Basic Hard Costs Retail 3,565 $ 40.00 $ 142,600 7% LP Equity $ 1,965,661 22% Residential 42,780 $ 110.00 $ 4,705,800 86% Basement 3,565 $ 30.00 $ 106,950 7% Deferred Developer Fee $ 403,127 5% Base Hard Cost Subtotal 49,910 $ 99.29 $ 4,955,350 Land Owner Passive Equity $ 800,000 9% Construction Loans $ 5,700,000 64% Additional Hard Costs Building/Site Acquisition Cost $ 16.03 $ 800,000 Potential Tax Credits $ - 0% Structural/Foundation Work $ - $ - Sources Total $ 8,868,787 Site Preparation $ - $ - Elevator $ 9.52 $ 475,000 Laundry Equipment $ 1.04 $ 52,000 Closed Circuit Surveillance $ 0.76 $ 37,700 Smoke Detectors $ 0.20 $ 9,786 Emergency Lighting $ 0.20 $ 10,000 Sprinkler $ 3.00 $ 149,730 Appliance Combo $ 3.33 $ 166,400 Compactor $ 0.42 $ 20,800 Dishwasher $ 0.73 $ 36,400 Garbage Diposer $ 0.14 $ 6,760 Hood $ 0.52 $ 26,000 Base Construction Upgrades $ 2.60 $ 129,766 Landscaping $ 0.90 $ 44,919 Additional Hard Cost Subtotal $ 23.35 $ 1,965,261

Total Hard Costs $ 122.63 $ 6,920,611

Architect & Engineering Fees 6% $ 415,237 Construction Management 2% $ 138,412 Environmental Study $ 10,500 Legal Fees 1% $ 69,206 Financing Fees 0.75% $ 51,905 Liability Insurance $ 10,500 Permit Fees $ 20,000 Initial Lease Marketing $ 98,989 Title Insurance $ 4,200 Soft Cost Subtotal $ 39.00 $ 818,948.81

Construction Contingency Cost 5% $ 8.08 $ 403,349 Developer Fee 5% $ 8.08 $ 403,349 Total Construction Cost $ 177.79 $ 8,873,677 Development Cost Less Land $ 161.76 $ 8,073,677 Financials: Salvage Value The building has suffered immensely during the past thirty years of vacancy, and as such is being considered a complete gut rehab with expected asbestos-related remediation. It has also been noted that the outside brick is compromised in places. The development team believes this can be repaired with fresh anchors, and otherwise considers the steel-reinforced concrete frame to be in reusable condition. There is expected to be little to no value in the electrical, plumbing and HVAC systems. Financials: Means of Value Creation Financials: Sensitivity and Return

22% 8.6% IRR Year 1 (After Tax) Cash on Cash

Capitalized Value Sensitivity Year 1 Year 2 Year 3 7.50% Best Case $ 10,635,042 $ 10,900,918 $ 11,173,441 8.00% Better Case $ 9,970,352 $ 10,219,611 $ 10,475,101 8.50% Base Case $ 9,383,861 $ 9,618,457 $ 9,858,919 9.00% Worse Case $ 8,862,535 $ 9,084,098 $ 9,311,201 9.50% Worst Case $ 8,396,086 $ 8,605,988 $ 8,821,138

EXIT Strategy Sources Projected Cash FlowsTotal Amount Our exit strategy for the Wurlitzer redevelopment Equity TotalYear 0 Year 1 Year 2 $ Year 3,173,677 3 IRR is to sell the property on a capitalized NOI basis Total Debt$ (3,168,787) $ 428,025 $ 437,863 $$ 4,583,210 2,500,000 22% after Year 3. After speaking with several experts Total Tax Credits $ 3,200,000 in the market and determining that a Total Sourced $ 8,873,677 condominium conversion strategy is not feasible Depreciation Calculation Residential Commercial now or in the foreseeable future, the best Square Ft 39,215 7,130 strategy is to sell after Year 3. Another attractive Percentage 85% 15% exit options our team is willing to entertain 27.5 39.0 consists of refinancing the property after three Total Value $ 8,868,787 years and holding the property until a favorable Allocated Value $ 7,504,359 $ 1,364,428.82 cap rate market presents itself. We feel very good Annual Allocated Dep $ 272,886 $ 34,985.35 about our net proceeds potential assuming cap Total Annual Depreciation $ 307,871 rates compress to levels in the low 8.0%/high 7.0% in 3-5 years. Stakeholders & Ownership Structure

The Wurlitzer Development Corp. LLC (10% Equity from Def. Dev. Fee)

The Wurlitzer Limited Partners (65% Equity from Cash Investment) The Wurlitzer Partnership LLC Bank Debt - Construction (100% of Equity) The Wurlitzer Group LLC

(15% Equity - building ownership)

lot lot for -

The Wurlitzer Builders & Architecture Consortium

(5% Equity – On-time, on-budget) use as a patio a use the by restaurant as Lease theLeaseadjoining side Financial Stakeholders Non Financial Stakeholders Conclusion: The Circle of Risks & Opportunity

1 2 3 4

Economic Growth Environmental Market Research Architecture & Design

Right now, Detroit is coming out of We expect that the building has The site was selected for being The Renaissance Revival the worst recessions in a some remediation needs, among the most promising architecture is extraordinary. We generation and is poised to grow especially asbestos, which we plan locations at the heart of a want to compliment the outside after bankruptcy, especially the to do, as well as build solar panels transforming market with clean, crisp, deluxe interiors. CBD

5

Construction The Wurlitzer Our project entirely relies on keeping construction costs in-line The project can be a home-run in Detroit. It has the with expectations. This is a risk we will need to manage. opportunity to complete Broadway, revive Harmonie

13 Park, and create infill towards Greektown and the 6

Personal & Family planned developments at the jail site. It will create a Political Approvals

Our team is young, motivated and new value tier in the marketplace that should sync We expect political support for not tied to other commitments. creating jobs, completing the Personal and family considerations well with meeting demand for something up-market street and stabilizing Harmonie are minimal. for people who are moved into the city in 2012/13. Park, but also plan on approvals being slow.

12 7

Legal Relationships Social & Comm. Goals With an expected return of 22%, it is an attractive We are seeking a true construction investment opportunity. Like political, we expect partner, who will benefit from community support, especially keeping the project on-budget and from neighboring owners who has on-time. Ditto equity investors. suffered through having it as an abandoned, dangerous structure.

11 10 9 8

Property & Asset Mgmt. Sales & Leasing Taxes Equity & Loans

We believe we have projected Though there is competition, we We forecast tax increases, but this We do not anticipate challenges reasonable vacancy, and want to expect our high end differentiator is also a source of NOI risk because raising equity, as there is create a partnership, possibly and a focus on getting a pro the city leadership could change significant interest in Detroit. The through equity, with the athlete will help sell the building tax policy to maximize revenue construction loan and tax credits restaurant tenant. and attract our pro-forma rents from the CBD. are essential and challenging. Paige Shesterkin [email protected]

CONTACT Stewart Hayes [email protected]

Brian Rassel [email protected] Paige Shesterkin Masters of Urban Planning Real Estate Certificate Program Brian Rassel Masters of Business Administration Masters of Science - Environment Stewart Hayes Masters of Business Administration Associate – Marcus & Millichap

FORTHCOMING SWOT

STRENGTHS WEAKNESSES • 7,000 unit coming 10 years apartment shortage in • Structural integrity uncertain – Rehab cost may kill long- Detroit’s downtown and surrounding neighborhoods. term profitability • The Madison block and Harmonie Park neighborhood • Side-lot is owned by city – may not be able to use offer an existing established sense of place and active outdoor area sidewalks • Elevator shaft located in a challenging area and • The Wurlitzer completes its block preventative of street-level retail • Walkable to critical mass of competitive employers • No on-site parking • New Gilbert backed parking structure one block away • Few grocery and drug-store offerings in immediate area that allows for creative parking solutions. • Water build-up in basement and other issues resulting • The DEGC owned Metropolitan building is likely to get a from deferred maintenance gut redesign.

OPPORTUNITIES THREATS • The building has been overlooked because of perceived • On-going bankruptcy proceedings structural challenges, but the team believes these are • Persistently high (as they are now) or even higher imminently remediate-able through a external metal corporate and personal income taxes in Detroit frame with an ivy overlay • Massive development of residential, class A apartment • Prime location (adjacent to People Mover, downtown, supply glut in the coming 5 years as projects are brought and grand circus park) on-line in Capital Park, the Wayne County Jail House site, • Historic Building, which will draw positive media the new Hockey entertainment district and along the • Positive history--used to be the Wurlitzer Music Center waterfront and mid-town corridor. • Ties in with the Harmonie Park entertainment and music • Overall regional recession or weakness among the auto district manufacturers, who have the lion’s share of highly paid • Opportunity to work with neighbors to create white collar workers in the region. more coordinated, nightly programming that • Failure to break ground and construct the M-1 Rail Line keeps people in the neighborhood • A significant rise in crime, particularly if there is racial or socio-economic discontent seeded by the suburban repopulation of Detroit.