Industrial Development Funded By Retail Investors Nears Completion

Prospective tenants are eyeing Gateway Industrial Center as the multitenant industrial campus in the heart of metro Detroit nears completion.

In the last 60 days, Gateway has provided five leasing proposals to prospective tenants for the 1.4 million-square-foot project. The businesses are looking for spaces ranging from 100,000 square feet to 421,000 square feet. Another four tenants have scheduled tours and submitted requests for proposals for leasing space.

The prospective tenants have the potential to bring an additional $3.2 million to annual revenue generated by the property. A lease extension with Lear for 154,000 square feet increases cash flow by another $1 million from March 2023 through March 2024.

Innovo Development Group paid $94.5 million for the property in January. At the time, it was less than 50% occupied. The two existing industrial buildings totaling 1 million square feet are now 100% leased to four tenants at below-market rents, with a weighted-average remaining lease term of 4.3 years from Jan. 1.

Innovo is raising funds on crowdfunding platform RealtyMogul to help pay for a 421,000-square-foot addition to the northwest corner of the property located on the corner of Interstate 96 and Southfield Freeway, offering tenants easy access to Canada, Chicago and the broader Michigan area. It’s surrounded by General Motors, Fiat Chrysler Automobiles and Ford Motor Co. and connected to one of Detroit’s five intermodal terminals.

“The Detroit industrial submarket has a glaring lack of supply in a highly sought-after region in the Midwest by logistics and manufacturing users,” project sponsor Innovo Development Group says on the RealtyMogul offering site.

A minimum of $35,000 is required to invest in Gateway Industrial Center, and the project is 92% funded.

Michigan-based Innovo’s acquisition and development pipeline totals more than $300 million in projects that are primarily sourced on an off-market basis. Innovo has developments across the country, including multiple projects in the Midwest and Florida. It has developed and managed more than $738 million in assets since its inception.

Photo: Courtesy of RealtyMogul