In June 2013 the City of Detroit set the record for declaring the largest municipal bankruptcy in The United States. Barely 18 months later, in December 2014, it set an even more impressive record of exiting that bankruptcy whilst preserving its most valuable assets.
Thus, with the bankruptcy behind it and an energetic and transparent leadership at City Hall, Detroit stands at the threshold of a renewed vitality.
The green shoots of recovery are everywhere:
- The exodus of people is slowing.
- Downtown and midtown occupancy rates are >96% according to developers.
- Office buildings, derelict for so long as a symbol of Detroit’s troubles, are now full of office workers and vacancy rates down to 11.5% (report from the Detroit office of Jones Lang Lasalle).
- The unemployment rate across Detroit has dropped 3.4% since the bankruptcy was announced (Bureau of Labor Statistics).
- University of Michigan economists predicted nearly 60,000 new jobs in Detroit for 2015 in their annual forecast.
- More than 100 new startups are now based in Detroit as well as many new restaurants opening, with some boasting waiting times of over an hour.
The Detroit Future Cities plan will provide $1.7 billion over the course of the next decade to improve city services and infrastructure and remove blight. The plan has outlined neighborhoods that should and can be saved. This year, 25 neighbourhoods have property values that are increasing (Mayor’s Office).
We’re seeing it’s core economy, which continues to be industrial, augmented by a new economy with businesses in the tech, financial, and healthcare sectors.
Of course, Detroit is not out of the woods yet. These green shoots will need careful nurturing before the recovery becomes robust. For investors therefore, a healthy appetite for measured risk, coupled with agility and local knowledge will be keys to success in a resurgent Detroit.
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