Demand for downtown retail exceeds expectations, Brookings study says

A new Brookings Institution study shows that there's growing demand in downtown Detroit for retail options as more people call the city's core home.

"There's tremendous purchasing power in the downtown, and it's growing," says Alyssa Lee, a researcher with the Brookings' Urban Markets Initiative who presented the findings at the Urban Land Institute/University of Michigan Real Estate forum at Cobo Hall last week Thursday.

With more households, more population and higher average incomes for downtown residents, the area has great potential for retail, she says.

The study showed that:

• 74,300 residents live in the downtown core and adjacent neighborhoods, up 13 percent from 2006 census projections.
• Median home values in the area were $115,000, up 31 percent from 2006 census projections.
• 193,000 people work in the area, yielding potential spending of $350 million per year.
• There is 125,000 square feet of demand for grocery stores in the market area.
• The market holds 389,000 square feet of demand for clothing, home and garden, electronics and other retail.

A sign of the potential is that grocery retailers downtown make on average $700/square foot, compared to the average $200/square foot that such retailers usually pull in, she says.

Click here to see the full report.

The study incorporated residential market research done recently by Katherine Beebe and Associates for Detroit Renaissance and the Lower Woodward Housing Fund. To view that research, click here. Part of that research included a survey of new downtown residents conducted through Model D.

Source: Alyssa Lee and the Brookings Institution Urban Markets Initiative
Writer: Clare Pfeiffer Ramsey