Independent Report Questions Market for DeVos, Van Andel Luxury Development in Downtown Grand Rapids

An independent analysis commissioned by state officials raises significant questions about whether the downtown Grand Rapids housing market can support a planned $796 million luxury development led by members of the DeVos and Van Andel families.

The July 2025 underwriting report by SB Friedman Development Advisors found "limited evidence" the Fulton & Market project can sell its 76 condominiums at the projected pace of 19 units per year at an average price of $1.1 million, according to MLive/The Grand Rapids Press.

The project would replace a nearly 7-acre riverfront parking lot with three high-rise towers: a 21-story office building, a 27-story boutique hotel with 76 luxury condos, and a 43-story residential tower with 595 apartments that would be the tallest building in Grand Rapids.

The report, which was required by the Michigan Strategic Fund to evaluate the project's request for $560.9 million in Transformational Brownfield incentives approved in December 2025, identified several market challenges across the development's components.

Apartment pricing concerns

The 595 apartments are projected to rent 36% to 92% higher than today's most expensive downtown units, with rental rates targeting $120,000 annual income for studio units, $180,000 for one-bedrooms, $210,000 for two-bedrooms, and up to $240,000 for three-bedrooms.

The report noted that a site-specific market study has not been conducted to evaluate demand for the apartments at their proposed rental rates. While Kent County's housing needs assessment estimates higher-income households will need more than 1,000 rental units and nearly 1,400 owner-occupied homes by 2029, SB Friedman cautioned that "only site-specific market studies can identify the appropriate unit mix, pricing and absorption for particular development sites."

Condo sales pace called unrealistic

One of the report's sharpest questions focuses on the 76 luxury condominiums, which would be in the same 27-story building as a 130-room boutique hotel.

The Fulton & Market development team expects to sell the units over about four years. To test that assumption, SB Friedman reviewed recent sales data from Zillow and found that at least 11 downtown Grand Rapids condos priced at $1 million or more sold over the past five years — about 2.2 per year.

Based on that comparison, the report concluded there is "limited evidence" the market can support condo sales at the pace and price point projected.

"The pace of condo sales anticipated by the development team is significantly more aggressive than what has been observed in the market recently," according to the July 2025 report.

One local realtor disputed the completeness of the data included in SB Friedman's report, noting that public listing databases such as Zillow can miss high-end transactions that occur before units are formally listed for sale.

Chuck Gallagher, a Grand Rapids realtor who has sold downtown condominiums since 2008, said he might have sold that many by himself in the last five years.

The report estimated the condos would be geared towards residents with average household incomes at $515,000. By comparison, the median household income in Grand Rapids is $69,108, compared with $82,631 countywide, according to the U.S. Census Bureau.

Hotel rates appear aggressive

The project includes a 130-room luxury boutique hotel designed to offer services and room finishes above those currently available in the downtown market.

While the projected average daily room rate was redacted from the version of the report obtained by MLive, the analysis cited a CBRE market study that found a $271 average rate is feasible when the hotel opens, potentially in 2029.

That's higher than downtown's top-tier hotels, which averaged $194 per night in 2023, the most recent year of complete data, according to the report.

The average daily rate estimate cited in SB Friedman's report was prepared by AHC Hospitality, which is owned by the DeVos and Van Andel families. The company owns or manages several downtown hotels, including the Amway Grand Plaza, the JW Marriott and AC Hotel by Marriott Grand Rapids Downtown.

The projected occupancy for the Fulton & Market hotel is notably higher than that of comparable downtown hotels, according to the SB Friedman analysis. Developers estimate the hotel will open at 75% occupancy in its first year, increasing to 78% in subsequent years.

However, the SB Friedman analysis cites data from the firm STR, which shows that top-tier downtown hotels averaged 65% occupancy in 2023. The SB Friedman report said the projected occupancy rate for the hotel appears "aggressive relative to the existing market."

Office tower anchored by single tenant

The Fulton & Market project includes a 21-story office tower with about 420,000 square feet of office space, along with ground-floor retail and an integrated parking deck. The building is envisioned as a single-tenant headquarters campus.

The report said the office tower's feasibility depends heavily on securing a major corporate tenant willing to lease the entire space.

Taxpayers bear no financial risk

Despite concerns about demand, officials said taxpayers are not financially exposed if leasing or sales fall short.

"Ultimately, the financial risk of lower than projected occupancy is entirely on the development team," said Joe Agostinelli, founder of Michigan Growth Advisors, who helped lead the project's request for public funding through the state's Transformational Brownfield program.

The $560.9 million incentive package is not an upfront payment to developers. Instead, it allows Fulmar Development Partners to be reimbursed with up to that amount in future state and local taxes generated by the project over 30 years to offset construction costs.

If the Fulton & Market development underperforms once it opens, less tax revenue would be generated — and therefore less would be reimbursed to the developers.

Fulmar Development Partners, a joint venture between members of the DeVos and Van Andel families and Chicago-based Magellan Development Group, declined an interview request for this story.

J.R. Berger, president of Magellan Development, expressed confidence in the project in a prepared statement.

"This project envisions product that does not currently exist in the market, and we are confident that the project will outperform historical market trends," he said. "Our confidence is bolstered by the positive impact of exciting projects including Acrisure Amphitheater, Amway Stadium, and the Grand River Greenway that will make downtown Grand Rapids an even more attractive place to live, visit, and do business."

The project is part of a broader vision for Grand Rapids' riverfront known as Grand Action 2.0, which includes the Acrisure Amphitheater and Amway Stadium developed by Grand Action, a company co-chaired by Dick DeVos, Carol Van Andel and Fifth Third Bank Regional President Tom Welch.

City leaders have touted the project as a transformational investment that will draw residents, jobs and visitors while building on momentum from nearby riverfront attractions.

Grand Rapids Mayor David LaGrand expressed confidence in the project's viability.

"I am very confident that this makes sense," LaGrand said. "These are things that we haven't seen before because we're living in a city that's never been growing this way before."

LaGrand addressed the project's scale and pricing by pointing to downtown's growing population and high-wage employees at businesses such as Corewell Health and Acrisure as indicators of potential demand, along with empty nesters downsizing from single-family homes.

The project's construction of the office tower is expected to start in summer 2026, with work on the hotel and residential towers slated to begin in summer 2027, according to a memo from the Michigan Economic Development Corporation.