Detroit's mixed-use property market is in the midst of a transformation that few cities in the Midwest can match. From the $1.4 billion Hudson's Detroit complex blending luxury residences, a world-class hotel, and corporate offices on Woodward Avenue, to the stadium and housing development rising in Corktown, the Motor City is proving that mixed-use development is the format that best captures this market's momentum. For investors and developers looking to participate, understanding how mixed-use loans work in Detroit is essential.
Mixed-use properties combine two or more types of uses, such as ground-floor retail with upper-floor apartments, or office space paired with restaurants and residential units, within a single building or development. These projects require specialized financing that accounts for the unique risk profile and income streams of each component. This guide walks you through everything you need to know about financing mixed-use properties in Detroit.
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Why Is Detroit Emerging as a Top Market for Mixed-Use Development?
Detroit has become one of the most dynamic mixed-use development markets in the Midwest, driven by billions in private investment, neighborhood revitalization, and a growing population of residents, workers, and entrepreneurs choosing urban Detroit over the suburbs.
The numbers are compelling. Dan Gilbert's Bedrock has invested more than $7.5 billion in downtown Detroit since 2011, and much of that investment has been explicitly mixed-use. The Hudson's Detroit complex pairs a 12-story office building (anchored by General Motors, JPMorgan Chase, and Accenture) with a 49-story residential and hotel tower. The planned $1.6 billion reimagining of the Renaissance Center envisions demolishing two office towers and replacing them with residential, hospitality, restaurant, and public market components. These are not isolated projects. They reflect a deliberate strategy to create the kind of walkable, multi-use urban environment that attracts both tenants and lenders.
Detroit's metro-wide multifamily occupancy rate stood at approximately 94.8% as of the third quarter of 2025, roughly 20 basis points above the national average. Annual rent growth reached 2.2%, a modest but steady pace that reflects healthy demand. Midtown, one of Detroit's premier mixed-use neighborhoods, reported occupancy rates above 95% in newer developments, anchored by Wayne State University and the Detroit Medical Center.
The city's development pipeline confirms sustained mixed-use momentum. The $377 million Mid Project in Midtown brings a Thompson Hotel, two apartment buildings, and over 55,000 square feet of retail to a 3.8-acre site on Woodward Avenue. In Corktown, the $198 million Detroit City FC stadium complex includes 76 affordable housing units and 8,500 square feet of retail alongside the 15,000-seat venue.
For developers exploring financing options, Detroit's improving fundamentals and institutional investment backing make this one of the most attractive mixed-use lending markets in the region. Visit our Detroit commercial loans hub for a comprehensive market overview.
What Types of Mixed-Use Loans Are Available in Detroit?
Financing a mixed-use property in Detroit requires matching the right loan structure to your project type, investment strategy, and borrower profile. Several loan programs are specifically designed for multi-component properties.
Conventional mixed-use loans from banks and commercial lenders are the most common option for stabilized Detroit properties with strong tenancy. These loans typically offer 70% to 75% loan-to-value ratios with terms ranging from 5 to 25 years. Rates currently range from 6.5% to 8.5% depending on the property's location, tenant quality, and overall debt service coverage ratio.
SBA 504 mixed-use loans offer an exceptional opportunity for Detroit business owners who plan to occupy at least 51% of their mixed-use property. The SBA 504 program allows financing up to 90% of project cost with below-market fixed rates on the Certified Development Company portion. For a restaurant owner building a ground-floor space with apartments above in Corktown, or a medical practice anchoring a mixed-use building in New Center, this program dramatically reduces the equity requirement. Learn more about SBA loan programs and eligibility on our dedicated page.
Bridge loans serve Detroit investors acquiring mixed-use properties that need repositioning, lease-up, or renovation before qualifying for permanent financing. Rates run higher at 8% to 12%, but these loans provide the flexibility to execute a value-add strategy, such as converting vacant office space to residential units or upgrading ground-floor retail to attract higher-paying tenants. Explore our bridge loan options for fast, flexible short-term financing.
Construction-to-permanent loans combine the building phase and long-term financing in a single closing. For developers building new mixed-use projects in Midtown or along the Woodward corridor, this structure eliminates refinancing risk and saves on closing costs. Learn more about construction financing options.
DSCR mixed-use loans qualify borrowers based on the property's income rather than personal financials. These are particularly useful for investors with multiple Detroit properties who want to avoid personal income documentation requirements. Visit our DSCR loan page for details on qualification criteria.
How Do Lenders Underwrite Mixed-Use Properties in Detroit?
Mixed-use underwriting is more complex than single-use property financing because lenders must evaluate multiple income streams with different risk profiles. Understanding how Detroit lenders analyze these deals helps you structure a stronger application.
The debt service coverage ratio (DSCR) is the most critical metric. Most Detroit lenders require a minimum DSCR of 1.25x for mixed-use properties, meaning the property's net operating income must exceed the annual debt service by at least 25%. Some lenders apply different DSCR requirements to each component, using 1.20x for residential and 1.30x for commercial.
Loan-to-value ratios for stabilized mixed-use properties in Detroit typically max out at 70% to 75%. Properties with a higher percentage of residential income may qualify for slightly higher leverage because apartment income is generally considered more stable than commercial lease income. Given Detroit's strong multifamily occupancy rates (approximately 94.8% metro-wide), the residential component of a mixed-use building often strengthens the overall loan application.
Lenders pay close attention to the tenant mix and occupancy levels. For the commercial components, Detroit lenders typically want to see at least 85% occupancy with creditworthy tenants on leases of three years or longer. For the residential portion, the target is usually 93% occupancy or higher, which aligns with Detroit's current multifamily market conditions.
Use our DSCR calculator to estimate whether your Detroit mixed-use property's income will meet lender requirements, or try our commercial mortgage calculator to model different loan scenarios.
Which Detroit Neighborhoods Are Best for Mixed-Use Investment?
Location is paramount for mixed-use success because these properties depend on foot traffic, neighborhood density, and amenity access to support their retail and commercial components. Detroit offers several distinct mixed-use corridors, each with its own character and investment profile.
Downtown Detroit is the epicenter of mixed-use development, anchored by Bedrock's portfolio of more than 140 properties. The Hudson's Detroit complex is the defining mixed-use project, combining corporate offices, The Detroit EDITION hotel, luxury residences, and ground-floor retail on Woodward Avenue. Ground-floor retail rents downtown range from approximately $25 to $45 per square foot annually, while residential units command $1,400 to $2,000 per month. The QLine streetcar connects downtown to Midtown along Woodward, providing the transit connectivity that mixed-use properties thrive on. The planned Renaissance Center transformation into a waterfront mixed-use destination signals continued institutional commitment to downtown's mixed-use future.
Midtown is Detroit's most walkable and amenity-rich neighborhood, making it ideal for mixed-use investment. Wayne State University's 27,000 students, the Detroit Medical Center's workforce, and the cultural institutions along Woodward Avenue (including the Detroit Institute of Arts and the Charles H. Wright Museum) create a built-in consumer base for ground-floor retail and dining. The $377 million Mid Project adds a luxury hotel, apartments, and retail to this already vibrant corridor. Residential rents range from $1,200 to $1,800 per month, with retail asking rents of $20 to $32 per square foot. Midtown's occupancy rates exceeding 95% give lenders strong confidence in mixed-use projects here.
Corktown has emerged as Detroit's most exciting mixed-use frontier. Ford Motor Company's Michigan Central Station campus has catalyzed surrounding development, creating a tech and innovation hub that attracts young professionals and entrepreneurs. The Detroit City FC stadium complex, with housing and retail components, will further densify the neighborhood. Residential rents range from $1,100 to $1,600 per month, with retail asking rents of $18 to $28 per square foot. The $70 million Michigan Avenue rebuild will transform the corridor connecting Corktown to downtown, creating new mixed-use opportunities along the route.
Eastern Market offers mixed-use opportunities rooted in the neighborhood's historic character. The 130-year-old public market anchors a district of industrial and commercial buildings that are increasingly being adapted into food and beverage, creative office, and residential space. Lower entry costs make Eastern Market attractive for smaller-scale mixed-use projects.
New Center and Dearborn provide additional mixed-use opportunities. New Center benefits from proximity to the Henry Ford Health System and historic Art Deco commercial buildings suitable for adaptive reuse. Dearborn, anchored by Ford Motor Company's global headquarters, offers suburban mixed-use potential along Michigan Avenue and the city's established retail corridors.
What Is the Difference Between Vertical and Horizontal Mixed-Use in Detroit?
Detroit's mixed-use market features both vertical (stacked) and horizontal (campus-style) configurations. The choice between these formats affects your financing options, construction costs, and target tenant base.
Vertical mixed-use buildings stack different uses on top of each other, typically with retail or restaurants on the ground floor and office or residential on upper floors. This format dominates in Detroit's urban core, particularly Downtown, Midtown, and Corktown, where land is limited and density is valued. Hudson's Detroit and The Mid Project are both vertical mixed-use developments. These projects deliver premium rents due to their walkable locations and urban amenities, but they carry higher construction costs per square foot and more complex engineering requirements.
Horizontal mixed-use developments feature separate buildings on a shared site, with each use occupying its own structure. This format is more common in suburban locations like Dearborn, Troy, and the Oakland County corridors. Ford's Corktown campus is a notable urban example of horizontal mixed-use, with separate buildings for office, innovation, and hospitality spread across the Michigan Central Station site. From a financing perspective, horizontal mixed-use is often easier to underwrite because each building can be evaluated independently, and lenders may allow phased construction draws that reduce risk.
For developers deciding between formats, the Detroit market generally rewards vertical mixed-use in the urban core (where walkability commands rent premiums) and horizontal mixed-use in suburban or campus settings (where phased development reduces financial risk).
How Do Detroit's Cap Rates Affect Mixed-Use Financing?
Cap rates directly influence how lenders value your mixed-use property and, by extension, how much they will lend. Detroit's cap rate environment varies significantly by property component, creating both opportunities and challenges for mixed-use investors.
Multifamily cap rates in Detroit range from approximately 5.5% to 6.0% for Class A properties and 6.0% to 7.0% for Class B properties. These rates reflect strong investor demand for Detroit apartments and translate into higher property valuations for the residential portion of mixed-use buildings. Detroit's multifamily cap rates offer meaningful yield advantages over coastal markets while still providing institutional-quality investment characteristics.
Office cap rates tell a different story. Class A office cap rates have risen to approximately 8.4%, while Class B sits at 8.68%, reflecting the CBD vacancy rate of around 21.3%. If your mixed-use property has a significant office component, expect lenders to apply a more conservative valuation to that portion. However, Detroit's office market is bifurcating sharply between Class A trophy space (which is attracting major tenants like GM and Accenture) and older buildings that face structural vacancy challenges.
Retail cap rates in Detroit's walkable corridors average approximately 7.0% to 8.0% for neighborhood-serving retail. Ground-floor retail in high-traffic mixed-use buildings often outperforms standalone retail because residential and office tenants above provide built-in customer traffic. The strongest retail rents in Detroit are found along Woodward Avenue in Midtown and Downtown, where the QLine streetcar adds foot traffic.
When underwriting a mixed-use property, lenders typically apply a blended cap rate that weights each component according to its share of the property's income. A mixed-use building that generates 65% of its income from apartments, 25% from retail, and 10% from office might receive a blended cap rate of approximately 6.3%, reflecting the dominance of the lower-risk residential income.
What Incentive Programs Support Detroit Mixed-Use Development?
Detroit offers a layered incentive structure that can dramatically improve mixed-use project economics and make construction loan applications more attractive to lenders.
Opportunity Zone designations cover significant portions of Detroit's core neighborhoods, including Downtown, Midtown, Corktown, Eastern Market, and New Center. Mixed-use developments in these zones allow investors to defer and potentially reduce capital gains taxes by investing through qualified opportunity zone funds. The tax benefits can meaningfully improve after-tax returns on mixed-use projects, particularly for investors redeploying gains from other real estate transactions.
Michigan's Brownfield Redevelopment Financing Act allows developers to capture incremental tax revenue to reimburse eligible environmental cleanup costs. For mixed-use projects on former industrial sites, which are common throughout Detroit, Brownfield incentives can offset tens of thousands or even hundreds of thousands of dollars in remediation expenses that would otherwise burden the construction budget.
Historic tax credits provide another incentive layer for mixed-use projects involving the rehabilitation of historic buildings. The Federal Historic Preservation Tax Incentive offers a 20% tax credit on qualified rehabilitation expenditures for certified historic structures. Michigan's State Historic Tax Credit adds up to 25% on qualified expenses. For Eastern Market warehouse conversions, downtown office building rehabilitations, and New Center adaptive reuse projects, stacking federal and state historic credits can cover a substantial portion of renovation costs.
Neighborhood Enterprise Zone (NEZ) certificates and Industrial Facilities Tax (IFT) exemptions administered by the Detroit Economic Growth Corporation provide property tax abatements that reduce ongoing operating costs and improve debt service coverage ratios.
Combining these incentive programs creates a financial structure that can make borderline projects feasible and strong projects exceptional. Lenders recognize the value of these incentives and often give credit for them in their underwriting analysis, resulting in better loan terms for projects that take full advantage of Detroit's incentive landscape.
What Are the Biggest Challenges of Mixed-Use Financing in Detroit?
Mixed-use loans present unique challenges that single-use properties do not. Being aware of these challenges helps you prepare stronger applications and avoid common pitfalls.
Component valuation conflicts arise when different parts of the property perform at different levels. If your Detroit mixed-use building has a fully leased residential component but struggling office space on the upper floors, lenders may apply more conservative terms to the entire property. Detroit's office vacancy rate of approximately 21.3% in the CBD makes this a particularly relevant risk for any mixed-use project with significant office exposure. The solution is often to minimize office components in new mixed-use developments or to convert underperforming office space to residential use.
Tenant coordination and management complexity affect both operations and financing. Lenders evaluate your management plan carefully for mixed-use properties because conflicts between uses (restaurant noise affecting residential tenants, for example) can drive vacancy and reduce income. Having an experienced mixed-use property manager in Detroit strengthens your loan application.
Parking requirements can be complex in Detroit's urban neighborhoods. While the city has become more flexible about parking minimums in walkable areas, lenders still want to see adequate parking for all property components. The cost of structured parking in Detroit ranges from approximately $20,000 to $35,000 per space, a significant expense that must be built into the project budget and loan request.
Environmental considerations are more prominent in Detroit than in many mixed-use markets. Many desirable development sites have prior industrial uses that require Phase I and Phase II Environmental Site Assessments. Michigan's Brownfield program helps offset cleanup costs, but developers should engage environmental consultants early and build remediation timelines into their construction schedules.
What Steps Do You Follow to Get a Mixed-Use Loan in Detroit?
Securing a mixed-use loan in Detroit follows a structured process, though it typically takes longer than single-use financing due to the complexity of evaluating multiple income streams.
The process begins with project planning and feasibility. Before approaching lenders, define your mixed-use concept clearly. Identify your Detroit target submarket, and complete a preliminary pro forma that projects rents and occupancy for each component. Lenders want to see that you understand the local market dynamics for every use type in your project. Detroit's widely varying rent levels across neighborhoods make this analysis especially important.
Pre-qualification and lender selection come next. Not all commercial lenders have experience underwriting mixed-use properties, and choosing a lender unfamiliar with multi-component deals can lead to delays or unfavorable terms. Submit your project package to at least three to four lenders and compare their approach to mixed-use underwriting. Local and regional banks like Flagstar, Comerica, and Old National have deep familiarity with Detroit's market nuances.
The appraisal and market analysis phase is where mixed-use financing gets more involved. The appraiser must evaluate each component separately and as a whole, using comparable properties in Detroit's various submarkets. For newer mixed-use projects in emerging neighborhoods, finding direct comparables can be challenging, which may lead to more conservative valuations. However, Detroit's growing pipeline of completed mixed-use projects is creating a more robust set of comparables for appraisers to reference.
Underwriting and approval require the lender to assess tenant mix quality, lease terms, DSCR for each component, borrower financials, and Detroit market conditions. Expect this phase to take three to five weeks for mixed-use properties, compared to two to three weeks for simpler property types.
Contact our team to discuss your Detroit mixed-use financing needs and get matched with lenders who specialize in multi-component properties.
What Major Mixed-Use Projects Are Reshaping Detroit's Lending Landscape?
The scale and quality of Detroit's current mixed-use development pipeline directly influences how lenders evaluate new projects. Understanding the major developments underway provides context for your own loan application.
Hudson's Detroit stands as the most ambitious mixed-use project in the city's modern history. The $1.4 billion complex combines the 12-story Block Building (680,000 square feet of office space anchored by GM) with the 49-story Tower housing The Detroit EDITION hotel and luxury residences, all connected by ground-floor retail and restaurant space. This project has fundamentally changed how national lenders view Detroit mixed-use development risk.
The Mid Project in Midtown is a $377 million development that exemplifies the mixed-use format at neighborhood scale. The project features a 15-story Thompson Hotel with 216 rooms, a seven-story apartment building, a 13-story apartment complex atop a parking garage, and over 55,000 square feet of retail. This represents the kind of moderate-scale mixed-use development that independent developers and smaller lending institutions can use as a benchmark.
Detroit City FC Stadium Complex in Corktown pairs a 15,000-seat stadium with 76 affordable housing units, a 421-space parking deck, and 8,500 square feet of retail space, demonstrating that mixed-use can work even when a sports venue is the anchor.
The Renaissance Center Reimagining, while still in the planning phase, represents the next generation of Detroit mixed-use development. Bedrock's proposal to transform the 27-acre waterfront site from primarily office use into a mix of residential, hospitality, restaurant, and public market space would remove significant office inventory while creating new mixed-use lending opportunities.
These marquee projects create a market context that benefits all mixed-use developers in Detroit. When lenders see that institutional investors like Bedrock, Ford, and the Gilbert family of companies are making multi-billion-dollar mixed-use commitments, they become more willing to finance the $2 million to $15 million mixed-use projects that fill in the gaps.
Frequently Asked Questions About Mixed-Use Loans in Detroit
What is the minimum down payment for a mixed-use property in Detroit?
The minimum down payment depends on the loan program and whether you plan to occupy the property. Conventional mixed-use loans typically require 25% to 30% down. SBA 504 loans for owner-occupants who will use at least 51% of the building can go as low as 10% down. Bridge loans and construction loans generally require 25% to 35% equity. Experienced investors with strong portfolios and a track record in the Detroit market may negotiate lower equity requirements with relationship lenders.
Can I finance a mixed-use property with residential and commercial tenants on one loan?
Yes, and this is the standard approach for mixed-use financing in Detroit. Commercial lenders underwrite the entire property as a single asset, evaluating the income from all components to determine loan amount and terms. The property must be financed as a commercial loan, not a residential mortgage, regardless of how much residential space it contains. If the property has five or more residential units plus commercial space, it falls squarely into commercial lending territory.
How does Detroit's office vacancy rate affect mixed-use loan approval?
Detroit's CBD office vacancy rate of approximately 21.3% does affect mixed-use underwriting for properties with significant office components. Lenders may apply higher vacancy assumptions, require longer lease terms from office tenants, or reduce the loan amount allocated to the office portion. Mixed-use projects with minimal office exposure (for example, ground-floor retail with apartments above) are less affected. Some Detroit developers are designing new mixed-use projects without office components entirely, focusing on the residential-plus-retail format that lenders view most favorably.
What DSCR do Detroit lenders require for mixed-use properties?
Most Detroit lenders require a minimum debt service coverage ratio of 1.25x for mixed-use properties, meaning the property's net operating income must be at least 25% more than the annual debt service. Some lenders apply component-level DSCR requirements, such as 1.20x for the residential portion and 1.30x for the commercial portion. Properties in strong Detroit locations like Midtown or Downtown with proven rent histories may qualify with slightly lower DSCR thresholds from certain lenders. Use our DSCR calculator to check your numbers.
Are there Opportunity Zone benefits for mixed-use projects in Detroit?
Yes, Detroit has extensive Opportunity Zone designations covering Downtown, Midtown, Corktown, Eastern Market, New Center, and many other neighborhoods. Investors can defer and potentially reduce capital gains taxes by investing in qualified opportunity zone funds that develop mixed-use properties in these designated areas. When combined with Michigan's Brownfield incentives and historic tax credits, the layered incentive structure can materially improve project returns. Consult a tax advisor to understand the specific benefits available for your Detroit project.
How long does it take to close a mixed-use loan in Detroit?
Mixed-use loan closings in Detroit typically take 60 to 90 days for conventional financing and 90 to 120 days for SBA 504 loans. The timeline is longer than single-use properties because the appraisal must evaluate multiple components, and underwriting requires analysis of different tenant types and income streams. Bridge loans can close faster, sometimes in 30 to 45 days, but at higher rates. Having a complete package with current rent rolls, tenant leases, environmental reports, and a clear pro forma ready before applying can help speed up the process.
Making Your Detroit Mixed-Use Investment Strategy Work
Detroit's mixed-use market is in a generational growth phase. The convergence of Bedrock's multi-billion-dollar portfolio, Ford's Corktown campus, the Midtown development surge, and the stadium complex rising in southwest Detroit is creating a mixed-use corridor that stretches from the riverfront through downtown and into the city's most vibrant neighborhoods. For investors and developers who understand the financing landscape, this market offers opportunities that few Midwest cities can match.
Whether you are acquiring a stabilized mixed-use building in Midtown, developing a ground-up project near the new stadium, or converting a historic Eastern Market warehouse into a mixed-use live-work space, the key to favorable loan terms is matching your property and business plan with the right lending program and presenting a well-documented application that addresses Detroit's unique market dynamics.
Contact Clearhouse Lending to discuss your Detroit mixed-use loan requirements and explore financing options from lenders who understand the Motor City's evolving development landscape.