211-243 N Main Street, Leland MI 49654

Property Description

The Reserve Leland is a luxury condominium development presented by J Peterson Homes, an experienced builder in Northern Michigan, and Venture Properties Real Estate, a successful 43-year-old boutique real estate company in Leelanau County, Michigan. The To-Be-Built building will be located in beautiful downtown Leland, Michigan. The Reserve Leland will be a mixed-use luxury residential/commercial building in town offering short-term stays. The units will be sought after by the most discerning of visitors, offering comfort, privacy, and walkable to dining, shopping, Lake Leelanau, and Lake Michigan beaches. Nearby are Sleeping Bear Dunes National Lake Shore, Empire, Glen Arbor, and Frankfort to the South, Northport to the north, Suttons Bay, Traverse City, and Old Mission Peninsula to the East.

Millions of visitors return to the region's vineyards, restaurants, shopping, and miles of sugar sand beaches and crystal-clear freshwater coastline annually.  

Leland has the distinction of being one of the most desirable places to stay for vacations in Northwest Michigan. Many in-town Leland properties have hosted the same guests for decades thus, the available properties for rent are limited to the new visitors coming to Leland desiring to stay a week or more. With availability often scarce, the law of supply and demand dictates that higher rental rates are the norm. Since most of the rental properties in Leland are older homes with minimal updates yet generally premium rental rates, there is an opportunity to create new options to meet the demand of visitors.

Leland, a quaint, timeless Northern Michigan Town

Leland is a dream coastal town, known for its charming fishing village (Fishtown) vibe. It wows visitors, summer residents, and full-time locals with its unmatched beaches. Leland is a prized strip of land between Lake Michigan and Lake Leelanau, offering beautiful beach access for boating, walking, rocking, sunset watching, and more! There are a number of hiking trails with gorgeous water views and forest wonders in all four seasons. Aside from its natural beauty, Leland boasts boutiques, fine dining restaurants, wineries, tasting rooms, galleries featuring local artisans, and much more. Learn More

The Building, Cost, and Proposed Sale

The Reserve Leland will be a green roof, three-story mixed-use residential and commercial building located on a quarter acre of land at the corner of William and Main St. in Leland, Michigan. It will contain (4) two-story condo units with 3 bedrooms, 2.5 bathrooms, 2 car garage, patio, and 1,800 square feet of living space on the upper two floors, and, (4) 600 sq. ft. “white box” ground floor commercial spaces, each plumbed for a 1/2 bath. The residential units will be finished with Luxury Vinyl Flooring, Quartz countertops throughout with Frigidaire Gallery Stainless appliances, tiled baths, and Kohler plumbing fixtures. This will be zoned as a PUD or planned unit development, and it is anticipated that all the residential and commercial units will be rented— the residential units on a short-term basis (3-7 days a week or longer) and the commercial units on standard commercial net leases, typically a one year term.

The completed building cost will be $5.1 million with estimated construction beginning fall of 2023 and completion to be approximately 10-12 months.

The cost breakout for the residential units will be $1.1 million each and the commercial spaces at $175K each. A sale of the entire building to one investor is anticipated with all the units to be dedicated rental units. The sale of the building would be structured as follows: purchase of the land (well installed, and all permits in place) at $900K – Contingent on the following:

1. Seller (Joel Peterson) obtains the PUD approval for the building.
   
   
2. The buyer (investor) and the seller (Joel Peterson) reach a $4.2 million construction agreement. The construction agreement would require the buyer to place 50% ($2.1 million) of the building cost in escrow at closing with monthly draws (sworn statements, lien waivers, etc.) as construction is completed, with the remaining 50% of the cost ($2.1 million) placed in escrow when the initial 50% is drawn down.
   
   
3. Mutual agreement on condominium documents and by-laws. 

Although the rental market is difficult to predict we estimate the nightly condo rate to be $850 in the peak season and $700 per night in the offseason and the commercial spaces to run approx. $600+ per month depending on the finishing required (base of $12/sq. ft.). 

Capital Appreciation

In tandem with the rental income potential, a powerful second component of the value proposition of the investment in The Reserve Leland is capital appreciation.  The value of residential properties in Leland has risen, on average, at least 10-20% for the last 4 or 5 years and commercial space is scarce, if ever, available.  The bottom line is that by the time The Reserve Leland is completed, we believe the market value of the residential units will have increased from $1.1 million, the pre-construction price, to approximately $1.3 million and the commercial units will increase from the pre-construction price of $175K to $225-265K+. So, before $1 of rental income is earned, there will be a projected increase in total unit value of approximately $1 million.  Thus, an investor may decide to have Venture Properties sell all the units simultaneously upon closing this investment, with an effective return of approximately 20% before sales commissions and closing costs.

The Management Team

Venture Properties will be responsible for the management of the residential and commercial units.  This will include marketing, bookings and reservations, cleaning services, maintenance, etc. Venture Properties will receive the going commercial rate for management services of 35% of gross rentals. The plan for The Reserve Leland is intended to be scaled. This will be the first property in a larger group of similar properties, all located in Michigan cities, that cater to the higher-end guest seeking to stay in fresh, upscale properties in the most desirable towns in Michigan. Brand creation and scalability is the goal of The Reserve group of properties where beautiful accommodations and exemplary guest service will always meet or exceed our guest’s expectations.

J Peterson Homes, Joel Peterson
Developer, and General Contractor
Joel Peterson is an expert in building and renovating Northern Michigan's finest properties.
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Kimberly Bork, Broker/Owner
Venture Properties Real Estate
Top 10 Selling Broker in the Northern Great Lakes Realtors MLS 2017-2022
Vacant Land, Residential, and Waterfront Properties
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Mark Hood, Realtor, and Finance Expert
Venture Properties Real Estate
Involved in over $3 Billion of financing of a wide spectrum of assets.
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Melissa Crimmins, Realtor & Vacation Property Management
Venture Properties Real Estate
Vacation Rental and Hospitality Management, Interior Design & Architecture
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Marissa Wege, Realtor, Investor, Residential & Commercial Design
Venture Properties Real Estate
Store owner, designer, and social media influencer
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