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Downtown Detroit as seen from the roof of the Broderick Tower.

(Jonathan Oosting | MLive.com)

DETROIT, MI - Did you hear the one about the largest American city to file for bankruptcy? It's no joke, it happened last month to Detroit, which sought federal protection under Chapter 9 of U.S. Bankruptcy code.

But while many city services struggle, to put it mildly, and entire neighborhoods are filled with empty and blighted houses, active investment in the city's core continues unabated.

CNN Money took note of this, going so far as to call it the "hottest downtown" in the country this week in an article called "Detroit's stealth business boom."

From CNN Money:

John DeGroot, vice president of research for Newmark Grubb Knight Frank, which tracks office vacancy rates nationwide, tells CNN Money that it “seems like a paradox.” But the city’s office vacany rates, still high by national standards, have dropped by 6 percentage points from 33 percent two years ago. The drop in vacancy rates is typically a percentage point, DeGroots said.

(RELATED: Shrinking vacancy rate in Detroit's downtown office space belies city's bankruptcy)

CNN Money notes that Quicken Loans founder and chairman Dan Gilbert has been one of the business leaders at the forefront of bringing back some of the commercial real estate in downtown Detroit, spending about $1.2 billion to renovate 35 properties in the past two years alone.

The latest tally available to MLive shows that Gilbert now owns or controls 7.5 million square feet of real estate in downtown Detroit. About four million square feet of that is office and commercial space, the rest is parking.

Also noted is marketing firm Campbell Ewald’s move into the city, which has yet to impact Newmark Grubb Knight Frank’s latest vacancy-rate report, which tracked the second quarter of this year. The company is moving its headquarters and more than 600 employees from Warren to the former J.L. Hudson Warehouse at Ford Field in December or early 2014.

According to Newmark and co., that move will take about 120,000 square feet of space off of the Central Business District (downtown) market, which means the vacancy rate there could drop to 25 percent, a rate not seen since 2002.

While Campbell Ewald is one of the largest companies to make the move from the Metro Detroit suburbs in to the city's core, it is far from the only one doing so.



The vacancy rate in the CBD stood at 27 percent in the second quarter, a drop of 40 basis points. The vacancy rate there was near 40 percent in the second quarter of 2011.

While Vacancy rates have been steadily declining since then, leasing prices appeared poised to correspondingly rise, but have instead fallen since the first quarter of 2012, when they averaged close to $26 per square foot. The price per square foot for CBD office space stood at about $23 for Class A space and $20 for Class B space in the second quarter of this year.

David Muller is the business reporter for MLive Media Group in Detroit. Email him at dmuller@mlive.com or follow him on Twitter.