16 Nov Billionaires and Businesses Betting Big – Reading Between the Lines of Some of Detroit’s Biggest Deals
Billionaires and Businesses Betting Big – Reading Between the Lines of Some of Detroit’s Biggest Deals
It has been 90 days since I last chimed in on the ICONIC Real Estate blog (August 17th to be precise), unfortunate for those of you who had looked forward to my weekly ruminations, but for ICONIC it has been an excellent 3 months. Leasing activity at the Ford Building continues to flourish as the renovations are underway and the activity increases each day. We launched a 15 Week Commercial Real Estate Boot Camp with 3 new agents in the middle of October, teaching the ICONIC ways and jumpstarting their careers in CRE. Representing BurgerIM franchisor in Michigan, and have executed leases in Oak Park, Dearborn and soon to open Royal Oak. Representing a Landlord in Taylor, we secured a long-term Citizens Bank lease; we also sold a gut re-habilitation apartment building in Detroit’s Boston Edison neighborhood, for close 10% over asking. Our latest assignment comes from overseas, TunnelTech, has engaged us to secure indoor skydiving facilities across North America as we ramp up to the New York ICSC, ICONIC is firing on all cylinders!
Back in July, our blog asserted that the OZ Funds were going to play a big role in the future of Commercial Real Estate, this week we saw two major announcements that seem to support this hypothesis with flying colors, orange and black. First, Amazon announced H2Q in Long Island Cityand Northern Virginia. The New York Times shed light on how the OZ funds may have played into this first of its kind, reverse Dutch auction for the online retailer’s corporate headquarters. Over the course of this week, I have heard a lot of commentary on the H2Q decision, most of it negative. However, if your obligations lie in shareholder value and the perfect storm to capitalize on a myriad of incentives and ultimately to defer and avoid the Everest of all tax bills, wouldn’t you have to? The move may be criticized today as one that takes advantage of the loose wording around qualifying areas and the way the politicians played the game, but what will it look like in 2050?
The second orange and black flag that was raised, which may not be as clear cut, was local billionaire, Dan Gilbert, selling off the Greektown Casino and Hotel. Is Dan getting out of gaming, or is he doubling down on a much bigger scale? Utilizing Opportunity Zone Funds combined with recently approved tax incentives could be the “Bedrock” that provides the foundation for his ambitious Hudson Site and Monroe Block developments. The possibility of deferring major capital gains, to invest back into the city he has already poured so much money into, seems particularly enticing. Mr. Gilbert and the State of Michigan fought hard, to “Move Here, Move the World” to win the other orange and black, but it doesn’t matter so much that we didn’t win that bid.
If you are realizing capital gains and aren’t sure of the best approach, the game in Detroit isn’t only for billionaires, reach out to ICONIC and find out how we can put your gains to work with you in Detroit’s Opportunity Zones.
Kees Janeway – Managing Partner, ICONIC Real Estate