Greater downtown Detroit residential real estate — a near-dead market only a few years ago — is now soaring with a few residential owners even listing their properties for fantasy prices running into the millions of dollars.
Two of the three Riverfront Towers residential buildings in Detroit have been sold to a New York City real estate firm that will likely keep the 557 units as rental apartments for now.
The $79.5 million sale on Wednesday to Manhattan-based Image Capital involved the 26-story Tower 100 and the 29-story Tower 200, according to the broker of the deal. The buildings are fully occupied. Tower 300, which is comprised of condo units, wasn’t part of the sale.
Like the Renaissance Center in the 1970s, Riverfront Towers was one of the bold waterfront developments created in the early 1980s to show that Detroit was purportedly recovering from its economic slide. Businessmen and civic boosters Max Fisher and A. Alfred Taubman joined up to build the first two towers, followed by the third in the early 1990s.
The towers are west of Joe Louis Arena and feature numerous amenities, including a restaurant, clubhouse, fitness center, indoor pool and a parking garage with rooftop tennis courts, shuffleboard and a jogging track. There also is a 77-slip marina that isn’t currently in use.
The two towers that sold had been owned since 2012 by a private investment group that bought the property out of receivership. The realtor said that group, like the new buyer, was out of New York.
The property was listed for sale last summer without an asking price and had been under contract since October. “There was a lot of interest. We had 21 offers,” the broker said.
The towers’ apartments have seen recent rent increases since the buildings underwent more than $4 million in renovations. The property listing showed units renting for just more than $1.40 per square foot as of last summer, before at least one round of subsequent rent increases.
The new owner of the towers will likely keep them as rental apartments, as any attempt to convert the units to condos would involve financial penalties under the property’s mortgage. The mortgage runs to 2024.
The firm’s website says it was formed in 2010 by Asher Koenig, a former Bear Stearns executive, “to provide real estate investment opportunities on behalf of its high net worth and institutional clients.” Its other buildings include the CNN Building in Washington and the 40-story One South Wacker office building in Chicago.