New $14.2M Proposed Development on Detroit’s Avenue of Fashion
Detroit Investor News: A $14.2 million mixed-use development is set to transform the former Fred’s Furniture Liquidation Inc. store at 20201 Livernois Avenue into a vibrant hub featuring 50 apartments, a 4,000-square-foot restaurant, and an additional 3,000-square-foot commercial space.
Spearheaded by Warren-based Brown Schroeder & Co. and Shelby Township-based BmK Design+Planning LLC, the project is slated to begin demolition in spring 2024, with construction expected to conclude in 2027.
The new building will include a mix of studio, one-bedroom, and two-bedroom apartments, with rental rates ranging from $836 to $2,400 per month. 11 units will be affordable housing, catering to residents earning 60%-80% of the Area Median Income.
Why It’s Significant for Rental Investors
This project is part of a larger revitalization effort along the Livernois corridor, an area that has already seen notable developments, such as the conversion of the former B. Siegel department store into apartments and retail space.
The Avenue of Fashion is benefiting from a revamped streetscape and a wave of new businesses, which is turning it into a sought-after location:
- Job Creation and Economic Growth
The development will generate construction and service industry jobs, boosting local employment opportunities.
Its commercial spaces, including a restaurant, will further contribute to the neighborhood’s economy, increasing the attractiveness of the area for new residents and businesses.
- Impact on House Prices
Mixed-use projects like this often have a ripple effect on local property values.
Revitalizing a prominent corridor can drive demand and increase home prices in adjacent areas, attracting middle- and upper-class tenants and buyers.
- High-Quality Tenants
With modern units, amenities, affordable housing options, and proximity to new businesses, this development is likely to attract professionals, families, and long-term tenants with stable incomes.
The Avenue of Fashion’s growing reputation as a trendy and convenient location further enhances its appeal.
Funding and Tax Abatements
The project is being financed through $10.81 million in debt, $1.78 million in equity, $1.5 million in grants, and deferred fees.
To support affordability, it will benefit from significant tax abatements under the Commercial Rehabilitation Act and Neighborhood Enterprise Zone, valued at $157,000 and $965,000, respectively.
Nearby Areas for Portfolio Expansion
Rental investors seeking additional opportunities might consider expanding into neighborhoods adjacent to the Livernois corridor, including:
- University District – Known for its historic homes and convenient access to the Avenue of Fashion, this area combines charm with rising property values.
- Bagley – Just south of Livernois, this neighborhood offers relatively affordable properties with significant upside potential given its proximity to renovations and new businesses.
- Sherwood Forest – A sought-after area featuring larger homes and tree-lined streets, ideal for targeting families or higher-income tenants.
- Palmer Park/The Palmer Woods Area – Close to Livernois and offering unique architecture, this area is an excellent option for investors looking for high-end rental or flip opportunities.
Overall, this development signals continued progress in Detroit’s renaissance, presenting exciting opportunities for rental investors to capitalize on the city’s economic and housing growth.
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