Detroit Office Market
Average Asking Rent (Price/SF) |
$20.25 |
Vacancy Rate (%) |
17.6% |
Net Absorption (SF) |
(428,668) |
The Metro Detroit office market vacancy rate climbed 100 basis points to 17.6% during the third quarter of 2021 as just over 428,000 square feet in net vacancies were created. The bulk of the Metro area’s negative absorption is the result of major corporate consolidations and relocations. Notable vacancies created from consolidations include the advertising agency GTB, formerly known as Team Detroit, vacating 217,000 square feet in Dearborn. While in Farmington Hills, Mercedes-Benz Financial Services completed and moved into the company’s new 200,000-square-foot headquarters at Twelve Mile Road and Drake Road. In the process, the company vacated 153,000 square feet at Farmington Hills Officenter II and additional space in Farmington Hills Officenter I. Also in Farmington Hills, the Gale Group vacated its former 160,000-square-foot headquarters. Finally, in Troy, Dialog Direct Inc. relocated staff from Troy to Highland Park, which contributed to a 66,000-square-foot vacancy in Troy. The market continued to be in pandemic mode with many companies continuing to balance work-from-home and work-from-office rules. The balance continues to create hesitancy in committing to new lease agreements.
Detroit Industrial Market
Average Asking Rent (Price/SF) |
$6.03 |
Vacancy Rate (%) |
4.2% |
Net Absorption (SF) |
956,334 |
The Metro Detroit industrial vacancy rate fell 20 basis point to 4.2% during the third quarter as just over 956,000 square feet was absorbed. Industrial demand remains strong causing construction activity continues to grow. With availability of existing space scarce, new construction developments accounted for the bulk of the Metro area’s absorption. During the third quarter, active construction grew 13.3% to 7.58 million square feet. The bulk of construction is now centered around the City of Detroit, where the submarket is seeing more commercial industrial development than at any point over the past 20 years. Bulk warehouse continues to be the main driver in industrial construction in the City of Detroit and around the metro area. Roughly 86% or just over 6.6 million square feet currently under construction in Metro Detroit are bulk warehouse facilities. Those new developments will add to the 13.5 million square feet of bulk warehouse built since 2015. With an existing inventory of 69 million square feet, the vacancy rate for bulk warehouse is just 0.07%.