Real estate panel: 'Old' downtown inventory dries up
A panel of real estate leaders recently agreed that the inventory of rehab-able buildings in downtown Grand Rapids has essentially been depleted — after years of redevelopment projects.
On Friday morning at DeVos Place, Colliers International West Michigan and Grand Valley State University hosted the West Michigan Economic & Commercial Real Estate Forecast Report.
At the end of the annual event, Colliers International West Michigan President and CEO Duke Suwyn hosted a panel discussion that featured five other speakers: the day’s main speaker, Paul Isely, a professor and associate dean at GVSU’s Seidman School of Business; John Wheeler, president of Orion Real Estate Solutions in Grand Rapids; Kris Larson, president and CEO of Downtown Grand Rapids Inc.; Kurt Hassberger, board chairman and president of Rockford Construction in Grand Rapids; and Earl Clements, principal at Colliers International West Michigan.
The six experienced professionals discussed a number of topics, but conversation generally boiled down to a conclusion that the city essentially has no more buildings needing rehabilitation.
“Eating up the rest of the old inventory is great, and we’re just about done,” Wheeler said. “Kurt and I talked about this twenty-five years ago. When I was in Indianapolis, I watched it happen. We took a town that was almost empty, and they rebuilt their downtown. When we first came (to Grand Rapids), we were buying ten, fifteen buildings a year.”
Larson noted that in the last three years, the gaps have been filled in with complex projects, requiring everyone to think creatively about the re-creation of the city’s many great buildings.
Hassberger agreed, adding that one reason there’s been so many new construction projects in recent years is because there’s practically nothing left to redevelop downtown, calling it a “seismic change” for the community. The Morton project is really the last piece of that puzzle, he said.
“About three years ago, when Kris came to town, I was talking to his predecessor, Jay Fowler. . . . He was saying one of the first things they asked him to do when he came to town was do an inventory of our dead, empty buildings,” Hassberger said.
“If I remember right, he told me there were seventy-two of them twenty-five years ago. I think now you can argue there’s maybe one, maybe none. . . . We’ve pretty much rehabbed everything there is to be rehabbed.”
Hassberger said Grand Rapids has many of the major developments it needs except for one: a grocery store.
“I’ve always said (downtown retail will) be here five minutes after there’s a demand for it,” Hassberger said. “These people aren’t stupid. I think they’re going to be here very shortly. As a lot of the residential grows, the demographics change. They’ll be here.”
Clements said that although there probably will not be major department stores in downtown any time soon, there’s a high probability that a grocery store will be coming soon. The city needs a grocery store and has for years, he said, and, “Retailers are looking. It is happening.”
“What we’re seeing because of the filling up of buildings downtown, that’s starting to push Bridge Street direction, push south from South Division,” Clements said. “It’s pushing into the development of Wealthy and Cherry streets. We’re seeing development going north and with that, the demand.
“We need several different things and with more and more demand and people living downtown and working downtown, we are going to get that. We will — have to get that — because the demand is there. At some point, the right scenario is going to line up, and we will get stores that have typically and historically have been in the suburbs. They’re going to start coming back downtown.”
Isely said that residential is also needed downtown to create retail growth. He believes that now a breaking point has been reached with residential, meaning retail will follow.
Larson added that on any given day, there are about 12,000-14,000 students in downtown, and that’s talent the city needs to focus on retaining.
“I think we’ve now had that tipping point where we now have an upcoming residential coming, and we have enough stuff downtown to draw our students in — that’s going to have a dovetail on us,” Isely said. “That vibrant community is what’s going to draw the talent here. And that’s what makes us competitive.”
Larson said that ultimately, it’s about thinking about investments that can be made in downtown that are going to create value for real estate developments, especially transformative differences.
“The big play for many of us right now is the potential for the river community, not just what’s happening in the river itself, but to embrace that asset that creates a diverse set of activities and amenities from a land-use perspective,” Larson said.