Finding value in Detroit

The challenges facing the Detroit area are certainly no secret. They have, in fact, been played out on the national stage.

From the state of the automotive industry to a market-wide economic downturn that has been both more severe and potentially longer lasting than in other states, real estate values in southeastern Michigan have been eroding at an unprecedented pace.

Of greatest concern are the countless broken residential developments that lie stagnant in various stages of incompletion, and are just now beginning to be liquidated by the project lenders and investors. These types of assets are potentially the most difficult to value. While banks continue to pursue the original developers for their personal guarantees, they often neglect the ongoing care of the real estate asset, not placing it within the hands of a receiver or asset manager as they would with a cash-flowing asset. These development projects unfortunately continue to lose tremendous value in real time.