Considering the current fiscal climate in the area, SOBB Sterling LLC’s successful purchase of a commercial shopping center in Sterling Heights, Michigan, is a bold move.
The property called “Market Place Shopping Center”, is a multi-tenant retail center located in a suburb of the City of Detroit. SOBB Sterling LLC acquired the foreclosed 260,000 square foot shopping center for $7.6 million.
Led by Joshua Simon, president of commercial real estate development firm SimonCRE, the SOBB Sterling LLC partnership brings investors from Arizona and Kansas to Michigan. While investing in the Detroit area may be viewed as a risk to many, Simon feels differently. Last year, he successfully developed a freestanding Verizon Wireless retail store in neighboring suburb Canton, Michigan, and the area has been of particular interest since.
“Even though the City of Detroit is experiencing financial difficulties, there are numerous reasons to invest in the greater Detroit area,” explains Simon of his most recent purchase. “We are investing not only in the Market Place Shopping Center, but also in the city for the long term. Maintenance was deferred on this particular shopping center as is typical when properties fall into foreclosure. We plan to immediately remedy those outstanding issues. By investing fresh capital into it, consumers will once again be drawn to the shopping center, infusing more sales tax dollars into the city. It also creates positive economic momentum in that a bustling retail center attracts new tenants who bring more business and much needed jobs.”
A Target retail store and 20-screen MJR Theaters anchor the Market Place Shopping Center. The remainder of the shopping center consists of a freestanding Ruby Tuesdays and a variety of regional and local retailers. More than 50,000 square feet of retail space is available in the 20 plus acre shopping center which is located on the highly trafficked Van Dyke Avenue in Sterling Heights. Simon is working with several national, regional, and local prospective tenants to occupy the space.
A few of the planned renovations for the shopping center are full landscaping updates, parking lot repairs and overall building improvements. Target is currently remodeling their store to match the freshened look of the rest of the shopping center.
The City of Detroit has experienced harrowing financial troubles leading to its July 18 bankruptcy filing, and is the largest municipality to request Chapter Nine protection. Although the population of the city has declined to 700,000 from its peak in the 1950’s of 1.8 million, it is more than double the size, by population, of the next largest municipal bankruptcy. The estimated city debt is $18 billion. By contrast, Sterling Heights, Michigan maintains a less than seven percent unemployment rate with average household incomes of more than $60,000.
“There are few commercial real estate developers who are paying attention to Detroit and its surrounding areas because of the stigma associated with bankruptcy,” adds Simon on the purchase. “We view this property as a “diamond in the rough” and know that with focused improvements and the correct retailer mix, it will again be a thriving shopping center.”