Pending Deals Show Investor Demand in Detroit
After Emre Uralli sold his Florida real estate at the peak of the market in 2007, he set out across the country to find the next spot for an upside.
He wound up in Detroit.
If the pending sales of his two major downtown investments close, Uralli stands to leave Detroit with $6 million in profit.
One buyer cast the winning bid in auctions for two of Uralli's buildings: the David Stott Building on Thursday and the former Detroit Free Press headquarters building on Wednesday at prices of $8.95 million and $4.025 million, respectively. This comes after Uralli invested $5 million and $2 million in the buildings.
Uralli largely declined to comment on the deals, or the buyer, other than to confirm that one buyer is interested in both buildings and is not based in the United States. He also noted that the deals are not closed.
In past interviews with Crain's, Uralli has expressed optimism in the city's upside potential as an investor.
"There's nothing but upside here," he said in a 2012 interview, pointing to the vacant buildings in the city. "These are amazing, historic structures. Buildings like this will never be built again. We're going to bring them back, and with them, the city is going to come back."
That may well be the case, said Paul DeBono, a vice president with Southfield-based Farbman Group.
Selling the 209,410-square-foot David Stott Building, at the corner of Griswold and State streets, for $4 million more than the investment in it reflects a high level of investor demand that has been absent in recent history.
"Demand is up tremendously right now," he said. "And people are willing to take risks on buildings that they wouldn't have taken in the past."
The fact that both buildings are Class C also demonstrates the high demand in the Detroit market, said Sam Munaco, president of Southfield-based Advocate Commercial Real Estate Advisors LLC.
"The overall market is as active as I've ever seen it," he said.
On the prices Uralli's buildings commanded, DeBono quipped: "And he should be sure to send a thank-you note to Mr. Gilbert," alluding to the increased value of Detroit real estate created by the recent buying spree by Quicken Loans Inc. founder and Chairman Dan Gilbert.
But it was more than just a stroke of luck caused by a billionaire's 30-plus real estate investments downtown.
A.J. Weiner, executive vice president of office brokerage in the Detroit office of Jones Lang LaSalle, also credited Uralli for picking the right time to buy and sell the buildings.
"When he bought those buildings, there was certainly an element of risk involved," Weiner said. "The risk was rewarded when the market was there to push the price up to a level he felt was sufficient to sell the buildings."
Source: Crain's Chicago