Rivertown Lofts Incubator: Loft Demand "Getting Hot" Submitted by Jim Ross

LOFT LIVING WHERE ALL THE ACTION IS

DEMAND IS GETTING HOT, ESPECIALLY IN DETROIT

By JUDY ROSE FREE PRESS SPECIAL WRITER

From her third-floor balcony in Willys Overland Lofts, Patricia Wren’s view is the downtown Detroit skyline. She rides her bike to Detroit Tigers games, to Hart Plaza for festivals and to Eastern Market for produce. When Wren and her partner Melissa Smiley are home, they share 2,000 wide-open square feet. That space is their living room, dining room, kitchen, office — everything but their two bedrooms and two baths. Says Wren, “It’s quite a spectacular place to live.”

Wren, 47, and Smiley, 34, are part of the loft boom in the core of Detroit and a few other “cool, 24/7 areas like Royal Oak,” to quote developer Andy Farbman. From vintage city buildings to flashy, from-scratch suburban construction, lofts have snagged a significant chunk of housing for younger, unfettered professionals.

And inside Detroit, city-boosters report a happy phenomenon: The great majority of people who move into a Detroit loft come from outside the city.

That’s the case with Wren and Smiley. Wren had owned her home in Ann Arbor for 16 years before she became director of the Health Science Department at Oakland University. The pair could have made the predictable buy, a house nearby in Rochester Hills.

Instead, urban life called them. “We walk to dinner, walk to the dry cleaner, walk to the bank,” Wren says. Both bicyclers, they reach farther destinations on their bikes.

After living on the west side of Ann Arbor, Wren says there’s a lot more to do and see in Detroit.

“There’s a festival every weekend, movies in the park. There’s a huge dodge ball tournament going on this weekend,” Wren says.

Tenants on cutting edge

Developers say folks who like lofts often like other innovations. On Garfield Street near Woodward, there’s a project called 71 Garfield. Zachary and Associates converted a vintage building into business space and lofts, warmed and cooled by sustainable energy.

The company drilled deep wells for geothermal heating, added solar water heaters as well as a water recovery system . “Utility costs are so low we don’t charge for utilities,” Ernest Zachary says.

In its first 100 days, 71 Garfield completely rented out, he says, crediting “the very knowledgeable tenant base that wants to live here.”

Zachary says about 70% of these tenants are newcomers to the city, and about 60% are from a creative field like architecture or design.

Now the company has brought the same super-efficient energy system to its conversion of the old Newberry Building, an 1895 nurses residence near Detroit Medical Center that will be ready to rent in September.

Heavy demand means short supply

In Detroit or in the suburbs, if you hunt for a loft, you’ll find 90% are rentals.

When low-down-payment mortgages crashed around 2007, they took the for-sale loft market with them. Back then, developers building lofts for sale found they had to rent them or fold.

Now both locally and nationally almost all new lofts are for rent, says Andy Farbman, president and CEO of the Farbman Group in Southfield.

But even for rent, he says, Detroit is close to running short of lofts. For the first time, his company’s Woodward Lofts in Midtown has a waiting list.

“With all the young work force coming downtown, you’d have to be blind to not see what’s happening.”

At The Loft Warehouse, owner/ broker Sabra Sanzotta handles both sales and rentals in areas like downtown, Midtown and Cork-town. The larger part of her business is rentals, she says, but she could sell more lofts if she had them.

“People moving into Detroit is a phenomenon,” Sanzotta says. “We really have to work hard to find individual condo owners who want to sell.” As with single-house sales, she says many loft sales are foreclosures or short sales.

The loft idea is so popular, many apartments now incorrectly call themselves “lofts.” Of true lofts for sale right now, the largest is Willys Overland Lofts on Canfield near Cass, where Wren and Smiley bought two smaller lofts and combined them into one. The complex only offers lofts for sale.

This 1918 building was a service center for Willys Overland autos. Willys built it four stories tall; the developer, DeMattia Group in Plymouth, added two floors of penthouses.

The structure was built strong enough for cars to drive on interior floors, so it can support two more floors, says DeMattia President Gary Roberts.

“You can have a tap dancer over your head, and you won’t hear anything.”

Ramps that funneled Willys cars into the building now lead to two floors of indoor parking, a luxury downtown.

The Willys has 75 lofts from 1,100 square feet at $140,000 to the best view penthouse, with balconies on two sides, for $640,000.

MetLife offers mortgages there with 20% down, says Austin Black II, broker/owner at City Living Detroit, which handles Willys’ sales. “But we are very close to getting approval for FHA loans,” he says, which would make down payments as low as 3.5%.

After that, it’ll be easy, Black says. “This neighborhood sells itself.”