The Wall Street Journal has discovered that Chinese real estate investors are purchasing vacant or near-vacant properties in Detroit.
Wall Street Journal: In the most recent deal, Dongdu International, known as DDI, earlier this month paid a total of $13.6 million for two of Detroit's better-known buildings, including the former home of the Detroit Free Press. DDI is planning to convert the empty Free Press building into apartments and keep the David Stott building, which is less than 25% occupied, as an office building.
The whole article reads like one of those late night infomercials about buying foreclosed property for no money down. One wonders if they get cash back at closing.
Like those basic cable hustles, there's a lot of rhetoric about "once in a lifetime" opportunities and deep discounts on distressed properties. Although this is obviously operating on a much larger scale than anything Don Lapre peddled. Better Carleton Sheets than Klee Irwin, I suppose.
Of course, as the Journal notes, successfully investing in distressed properties often requires "local real-estate savvy" as well as the money and patience to deal with the costs and hurdles of improving these buildings. They don't call these properties distressed for no reason.
We'll see if the Chinese interest in distressed property, especially distressed property in Detroit, is something that alters the market or if it's just another real estate fad.
