Look inside the luxury apartments renting for $2,300 per month at the Joe Louis Arena site

As the developers of Detroit’s newest high-end apartment building prepare to welcome residents as soon as this week, the high cost of the units appears to be serving as little deterrent for tenants.

With 496 luxury units in a gleaming, new glass tower on the Detroit River, developers behind The Residences at Water Square say leasing of the project — where rents for available units start at nearly $2,300 per month — shows positive momentum.

“We’re heading in a good direction,” Danny Samson, chief development officer for Detroit-based real estate firm Sterling Group, said of the lease-up for the building that will begin allowing residents to move in later this week or early next week. “We’re really in a good vein with the amount of momentum that we’ve seen and the pipeline (of residents) continues to fill up.”

Speaking with reporters Tuesday morning following a ceremonial ribbon cutting for the building, Samson declined to address specifics around overall lease velocity or an anticipated lease-up for the project. 

 

But it makes for a topic many real estate observers in the city are paying attention to, as the development aims to set a new bar in the city in terms of the rent charged and the amenities offered.

A website for the building shows 167 units available as Tuesday morning, meaning approximately two-thirds of units have been spoken for since leasing began in August.

In addition, the building has four two-bedroom penthouse units with “reservations” already in place and priced between $9,000 and $10,000 per month, Samson told Crain’s in August.

The leasing website shows that every unit beneath the ninth floor has been rented, and the lowest-cost available unit is a 10th-floor, 586-square-foot studio renting for $2,275 per month. An identical apartment on the 24th floor leases at $200 more per month, per the project’s website.

The price of the units at Water Square have been a hot topic since lease rates were announced in the summer, as they’ve exceeded nearly every other luxury development that has come online in recent years and make for an “anomaly” in the marketplace, said Jerome Huez, a Realtor and owner of The Loft Warehouse, a Detroit-based residential real estate brokerage that works with myriad condo and apartment developers.

While the figures extracted from the project’s website do indicate positive leasing momentum, Huez cautioned that they don’t tell the complete story as it’s unclear if units are being leased at the full advertised rates or whether the owners might be providing concessions to new tenants.

“We’re a bit in the dark,” said Huez, adding that he’s unsure of the number of potential renters in the city who can afford such rates. “If it’s truly leasing at those rates, that’s fantastic. But I don’t know who those renters are.”

The Waters Square development joins other high-end apartment developments new to the market, including the Perennial Corktown. The latter project advertises rents more in line with traditional luxury apartments in the city, Huez noted. 

By comparison, slightly smaller studio units at the Perennial and the recently opened Book Tower rent for about $1,750 per month.

The asking rents at Water Square have also caught the attention of top elected officials in the area.

“I wish I could afford to live here,” Wayne County Executive Warren Evans quipped during the ribbon cutting. “One day when I get paid, I will.”

The developers for the project, the adult children of Detroit businessman Gary Torgow, chairman of Huntington Bank, tout that the Water Square building was entirely privately funded, and as such, a development cost is unknown.

Officials in Detroit have put a strong emphasis on affordable housing policy matters in recent years, and projects that receive public incentives in the city are required to make some units affordable at various income levels.

But high-end, market-rate developments are also important, Detroit Mayor Mike Duggan said.

“This apartment building is a high-end development and it really is for people who are paying a very large amount of rent,” Duggan said Tuesday in remarks prior to the ribbon-cutting. “And the city that we want to build is a city where there’s room for people of all incomes. There should be residences for people who are high income and there needs to be residences for those of lower income.”

Units at the Water Square building include 10-foot-tall, floor-to-ceiling windows with Detroit River and downtown views, as well as high-end interior finishes and a host of amenities, including an indoor pool and outdoor sun deck, a rooftop terrace, dog wash, fitness center, indoor bicycle storage, valet parking and direct access to the Detroit Riverwalk. Retail options are set to open soon.

Sterling Group is also developing a hotel on the same site — formerly home to Joe Louis Arena — and seeking $90 million in public incentives, as Crain’s recently reported.

Editor’s note: This story was updated to correct the percentage of apartments leased in The Residences at Water Square.

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