DDI Group, a Shanghai-based investment group that has been purchasing skyscrapers in the City of Detroit a few years ago has started to see the rewards of investing in Detroit. They currently have the former Detroit Free Press headquarters building for sale, at a price of 16 million USD. That’s 4x the price they paid in 2013, and local real estate professionals are estimating that the actual value might be even higher.
Foreign investors cashing in on the great deals in Detroit is nothing new, and according to the Bernard Financial Group, hundreds of millions of foreign money has poured into the Detroit Real Estate market in the past few years. Compared to other real estate markets in the USA, the Detroit market is insanely attractive due to its great payout, and most recent appreciation rates.
Detroit serves as a great place for foreign investors to park their cash, without worrying about losing big. The big advantage over markets such as New York City, Miami and Los Angeles is the huge relative cap rate in Detroit. While prime investment locations of Detroit yield capitalization rates in the ballpark of 8%, other markets barely make it to 6%.