Toronto Developer Scouting Detroit Real Estate Market

A prominent Toronto developer who is building Canada’s tallest skyscraper has been scouting for property to build on in Detroit as well.

While city boosters and real estate experts regularly talk in general terms about the amount of out-of-state and international interest in the Detroit real estate market, rarely do the identities of those interested parties — still drawn to the area by higher returns on comparatively cheap properties — become known until they buy a building or land.

It’s different for Sam Mizrahi, who registered business entities in Michigan last month, one of which describes its “general character” as “real estate development and financing.”

Two real estate sources briefed on his interest in Detroit development also say he’s been looking for land to build on for the last several months.

Precise locations in the region are not known, and land records in Wayne and Oakland counties don’t indicate any property purchases have yet been made.

He would be the latest out-of-state investor in the Detroit market, following Philadelphia-based developer David Grasso, who is working on a development (potentially a high-rise) at the southwest corner of Woodward Avenue and West Grand Boulevard and New Yorkers Mario Procida (Midtown West), ASH NYC (The Siren hotel and Eastern Market project) and Ron Castellano (the Herman Kiefer property), among others.

Internationally, Fernando Palazuelo, a developer out of Peru, has been working for years on the Packard Plant project. Mexican telecom mogul Carlos Slim Helú, regularly listed as one of the world’s richest men, made millions when he bought and then sold less than two years later a mostly vacant downtown office building to Adient plc for a new headquarters plan that earlier this year was scrapped.

Multiple emails and phone messages were left with Mizrahi the last two weeks. Two attorneys at Detroit-based law firm Kotz Sangster Wysocki PC, Keith Soltis and John Ulrich, who are listed on the business entity registrations also did not respond to emails and phone calls from Crain’s.

Credit: Mizrahi Developments via Facebook

Mizrahi Developments is in the process of building a 1,005-foot, 85-story tower called The One, which is slated to have 416 condominiums, a 175-room hotel and retail space.

Mizrahi, who was born in Iran and came to Canada as a young boy, most recently was in the luxury dry cleaning industry, starting a company in 1992 called Dove Cleaners, which had more than 100 locations before he exited the business, according to a 2015 interview in Toronto Life. The precise circumstances surrounding his exit were not known; the company faced financial trouble in 2007 as DoveCorp Enterprises sought bankruptcy protection, a CBC article at the time said.

Mizrahi Developments was founded in 2008.

The company is in the process of building a 1,005-foot, 85-story tower called The One, which is slated to have 416 condominiums, a 175-room hotel and retail space, according to an October 2017 story by The Globe and Mail. The story says a 33-foot-tall first floor is rumored to include an Apple store. The Toronto Star in June said the building will have its own postal code when completed in 2023.

Mizrahi also is developing the building at 1451 Wellington in Ottawa with 93 condominiums and a building at 128 Hazelton Avenue in Toronto with 21 condos across nine stories.

Broker James Becker has perspective on both Canadian and Detroit real estate, having worked in the industry for JLL (formerly Jones Lang LaSalle) in Toronto for several years as president and international director.

Now the principal and managing director of the Detroit office of Toronto-based brokerage Avison Young, Becker said Mizrahi’s attempts to plant a flag in the Detroit market make sense.

“It’s pretty logical,” he said. “There are not a lot of returns to be found in Toronto because everything is compressed and expensive. Looking at a 7 or a 7.5 percent return here probably looks pretty attractive versus the 4 or 4.5 percent he is seeing in Toronto.”

Published By https://www.crainsdetroit.com/real-estate/toronto-developer-scouting-detroit-real-estate-market