Bedrock Is a Major Force in Motor City
You’d be hard-pressed to find a commercial real estate company in the Midwest more active than Bedrock Detroit. The full-service firm — which acquires, leases, finances, develops and manages commercial and residential space — has several projects in the development pipeline spread across property types.
Since its founding in 2011, Bedrock has located more than 160 office and retail tenants to Detroit’s “technology-centric” downtown. In addition, Bedrock and its affiliates have invested more than $3.5 billion in acquiring, renovating and developing slightly more than 100 properties totaling about 16 million square feet in downtown Detroit and Cleveland.
Bedrock is commonly referred to as the real estate arm of billionaire businessman Dan Gilbert’s Rock Ventures. Gilbert is the chairman and founder of Rock Ventures and Quicken Loans Inc., the mortgage lending giant headquartered in Detroit.
Diverse project portfolio
In January, a joint venture between Shinola/Detroit LLC and Bedrock broke ground on the eight-story, 130-room Shinola Hotel. Located at 1400 Woodward Ave., the boutique hotel is scheduled to open in fall 2018. (Shinola, a Detroit-based company, is best known as a manufacturer of watches, bicycles and leather goods.)
Chef Andrew Carmellini and Noho Hospitality are developing the food and beverage offerings to ensure the “experiential” atmosphere.
In late 2016, Bedrock acquired 321 W. Lafayette, the former home of the Detroit Free Press, which occupied the building from 1925 to 1998. Bedrock plans to convert the 14-story Art Deco building designed by famed architect Albert Kahn into a downtown residential tower with ground-floor retail and two floors of office space. Renovation of the 300,000-square-foot building could cost close to $70 million, according to Bedrock.
Bedrock is currently underway on an ambitious, 8.4-acre mixed-use project in Brush Park, a historic neighborhood in Midtown Detroit. Known as City Modern, the development will feature 410 new residences, including 107 for-sale residences and 303 for-lease residences.
City Modern will also incorporate at least 22,000 square feet of ground-floor retail space. The walkability factor is one of the strengths of the development, according to Bedrock.
The first of the for-sale units at City Modern will be completed in early 2018, with the rental units to be completed at a later date, according to Crain’s Detroit Business. For-sale carriage homes range from 1,460 to 2,005 square feet in size and from $423,690 to $645,860 in price, according to Crain’s. For-sale townhouses range from 1,835 to 2,680 square feet and from $536,450 to $761,960.
“City Modern combines a diversity of housing types, architectural aesthetics, historic preservation strategies and residential unit costs in order to appeal to a broad spectrum of existing and future Brush Park residents,” states a brochure provided by Bedrock.
Bedrock is also nearing completion on 28 Grand, a 13-story development of micro-apartments in Capitol Park. The building will feature 218 finished apartments averaging 260 square feet each, according to Curbed Detroit, an online publication that provides local real estate and architecture news.
In February, Gilbert proposed building Detroit’s tallest building on the site of the former Hudson’s flagship department store along Woodward Avenue. The store closed in 1983 and was demolished 15 years later.
The plan calls for a 52-story structure that would include 250 residential units plus a nine-story podium that would feature office, commercial and other space. The mixed-use project would total 1.2 million square feet. The developer could break ground as early as Dec. 1 if project financing is in place by that time.
In April, sportswear company Under Armour opened its first Brand House in downtown Detroit at 1201 Woodward Ave. The high-end shop, which specializes in apparel and shoes, leases slightly more than 16,000 square feet across three floors. Bedrock owns the building.
In February, Microsoft Corp. announced plans to move its Michigan Microsoft Technology Center from nearby Southfield, Michigan to the One Campus Martius building owned by Bedrock in downtown Detroit.
Microsoft will occupy more than 40,000 square feet at One Campus Martius beginning in early 2018. Microsoft is reportedly bringing in more than 200 employees.
“This is another great example of an innovative, global business moving downtown and further evidence that Detroit is quickly becoming one of the technology centers of the country,” said Gilbert at the time the deal was announced.
Hotel room shortage
During the recent RECon show in Las Vegas — an event that attracted more than 37,000 retail real estate
professionals — Bedrock President Dan Mullen said that the Shinola Hotel will most definitely help fill a void downtown. Mullen attended RECon to woo prospective retailers to Detroit.
“We’re 1,700 rooms short annually right now within the Detroit CBD. The convention centers are full. They can’t take on any more shows, and we don’t have enough hotel rooms. There’s so much demand. Conventions want to be here, hoteliers want to come. We’re under-roomed,” said Mullen.
Mullen should know. Among Gilbert’s holdings is the Greektown-Casino Hotel. “We own the casino and the hotel and our numbers are staggering — mid-90s occupancy rate, big ADR (average daily rate) and the RevPAR (revenue per available room) is amazing,” said Mullen.
The general contractor for the Shinola project is Southfield-based Barton Malow Co. Kraemer Design Group of Detroit is the architect.
“We’re going big in hospitality,” said Mullen, pointing out the company has launched Bedrock Hospitality. “There is big demand for five-star hotels in Detroit. We decided to roll out the hospitality division and start building hotels. The person we hire to run hospitality will have a hybrid role. That individual will focus on development and asset management.”
Unlike Chicago, Detroit is relatively new to the game when it comes to boutique hotels, said Mullen. “The Foundation Hotel just recently opened. That’s the first boutique hotel to open in years in the city of Detroit.” (The 100-room hotel is in a historic firehouse across from Cobo Center. The hotel houses the Apparatus Room Restaurant.)
In his role as president of Bedrock Detroit, Mullen is responsible for creating and implementing the company’s vision for Detroit’s downtown. He has played a crucial role in locating and attracting unique, innovative companies and retail tenants to the city’s CBD. What does Mullen want retailers to know about Detroit that they might not already know?
“The opportunity is endless. The exposure that they can get in Detroit will help them with their public relations and marketing strategy. It’s still a little unexpected [for a big-name retailer to come to Detroit], and it helps elevate the retailer’s brand,” said Mullen.
Retailers are completely “blown away” when they see the sales per square foot generated by tenants in Bedrock’s portfolio because they are standout performers, said Mullen. He didn’t provide any details, however.
Mullen is a consummate promoter of Detroit and it’s evident in his voice. “People come from all over just to shop in the city. I think retailers would just be pleasantly surprised with everything the city has to offer.”
— Matt Valley
This article first appeared in the July 2017 issue of Heartland Real Estate Business magazine.