Skip to main content
Part of complete coverage on

Can Detroit go from Motown to grow-town?

By John Defterios and Kristin Cuff, CNN
updated 2:22 PM EDT, Fri April 18, 2014
STORY HIGHLIGHTS
  • Detroit was once a powerhouse of automotive manufacturing but has suffered in recent years
  • International investors are snapping up sites for a fraction of their previous value in the city
  • Some are looking to build big property development projects on the land they buy

One Square Meter explores the leading architectural designs, city plans and demand for property investment in emerging markets. Join CNN's John Defterios as he visits some of the world's most dynamic cities for an insight into the fast-paced world of real estate development. Watch the show on CNN every Tuesday during Global Exchange.

(CNN) -- Detroit was once known as the automobile capital of the world -- a global symbol of modernity and a testament to the power of American capitalism.

After decades of industrial decay, however, the "Motor City" finally crashed when it filed for municipal bankruptcy in July 2013.

Many long-time investors fled for safer havens beyond the city limits as property prices plummeted and businesses suffered.

But not everyone took flight.

Others settled in for the long haul, sure that the city that brought us the sounds of Motown and some of the most iconic cars ever built would bounce back.

Can Detroit transform itself?
Could Cyprus be the next luxury yacht marina?
Beirut proves its resilience

One such man was Fernando Palazuelo.

The Peru-based developer stunned Detroiters by purchasing the abandoned Packard automotive plant earlier this year -- one of the most famous buildings to be sold after the city filed for bankruptcy and the most emblematic eyesore of Detroit's fall.

But Palazeulo sees beauty and possibility amid the ruin of the Packard site.

"I think that the Packard Plant is in the best location ... surrounded by extraordinary highways, railways, airports, very close to Canada," Palazuelo said.

A look at the numbers illustrates why international investors Like Palazuelo are entranced by Detroit's under-appreciated assets.

Palazuelo bought the 325,000 square meter (3.5 million square feet) Packard space for just $405,000.

To put these figures into context, San Francisco's average price per square meter of office space is about $6,000.

With Detroit home to an estimated 78,000 abandoned buildings, it is little wonder then that international buyers spy an opportunity with big potential returns.

A Chinese firm bought three properties downtown last year.

In around 15 years, at a cost of approximately $350 million, Palazuelo envisions transforming the Packard site into a residential, commercial and industrial hub.

"Ten years (and) you will not recognize it," he said excitedly. "You will think it was always in perfect shape. So we will do it."

Six years ago Palazuelo invested heavily in Lima's historical center, an area also blighted by vandalism and decades of deterioration.

He bought property at rock-bottom prices then sat back and watched the value quickly rise.

Detroit, and the world, will be watching closely watch to see if history repeats itself and if Palazuelo's financial prediction bears fruit.

See also: Dutch architects build 3D printed house

See also: London's insane luxury basements

See also: Bourdain in Detroit

ADVERTISEMENT
Part of complete coverage on
updated 11:04 PM EST, Sun December 14, 2014
An artists impression of a Shinzu Corp structure on surface level.
What would happen if the legend of the Lost City of Atlantis was crossed with the screenplay of Kevin Costner's 1995 hit movie "Waterworld"?
updated 11:39 PM EST, Wed December 3, 2014
An development off the coast of Singapore is set to be the world's largest eco-resort.
updated 4:54 AM EST, Mon December 1, 2014
2014 has been a big year for towering new skyscrapers, but next year will be bigger.
updated 9:18 PM EST, Thu November 20, 2014
Viticulture meets real estate development in the Dominican Republic.
updated 9:02 PM EST, Thu November 13, 2014
It's the latest landmark on Singapore's already busy skyline.
updated 12:38 PM EDT, Fri October 24, 2014
The city has found a novel way to revive depressed neighborhoods.
updated 10:33 AM EDT, Tue October 21, 2014
CNN's John Defterios explores how Japan is transforming abandoned factories into soil-less hydroponic vegetable farms.
updated 11:08 PM EDT, Wed October 1, 2014
Brazil might be viewed as booming emerging market, but with growth has come problems.
updated 9:52 AM EDT, Tue September 30, 2014
CNN's John Defterios explores how the company is re-designing its headquarters in Munich, Germany.
updated 11:21 PM EDT, Thu September 18, 2014
A new kind of location service could change the way we look at the world.
updated 10:58 PM EDT, Thu September 4, 2014
It's the townhouse that twists like a Rubik's cube, to bask in the summer sun and shield itself when winter bites.
updated 10:38 AM EDT, Wed August 20, 2014
Could you fit your life into 300 square feet? Developers are betting on it, with new, tiny living spaces for urban millennials.
ADVERTISEMENT