Detroit Office Market
Average Asking Rent (Price/SF) |
$20.40 |
Vacancy Rate (%) |
18.3% |
Net Absorption (SF) |
(321,327) |
Metro Detroit’s office market vacancy rate climbed 40 basis points to 18.3% during the first quarter of 2022 as just over 321,000 square feet in net vacancies were added to the market. Available sublease space grew 3.0% during the quarter for a total of 1.2 million square feet. This marks the seventh consecutive quarter the metro office market has posted negative absorption. During that period, which began during the onset of the pandemic, the metro office market has posted over 2.1 million square feet of negative absorption while available sublease space grew by 34.0%, or over 314,000 square feet. Despite the new supply of office space, asking rates have not shown much of a decline. The average asking rate has fallen just over 1.0% since the beginning of the pandemic as landlords continue to be reluctant to reduce rates in a market with little to no market participation. Moreover, pre-pandemic leasing have provided most landlords cashflow despite real and shadow vacancies created as employees work from home. In addition, landlords are anticipating more firms will return to the market as workers gradually come back to the office.
Download Detroit Office Market Report 1Q22Detroit Industrial Market
Average Asking Rent (Price/SF) |
$6.19 |
Vacancy Rate (%) |
4.2% |
Net Absorption (SF) |
1,013,714 |
Metro Detroit’s industrial market continues to see strong demand. During the first quarter of 2022, just over 876,000 square feet was absorbed, pushing the vacancy rate down 10 basis points to 3.9% from the previous quarter. According the Bloomberg, Michigan’s economy has improved “the most in its history” since the pandemic started in 2020. While the state has rebounded in terms of employment, corporate profitability and tax revenue following Covid-19 shutdowns, the Metro Detroit Industrial market has been a mainstay. With the exception of the second quarter of 2020, when Art Van’s, 1.2-millon-square-foot headquarters was vacated, the Metro industrial market has posted positive absorption every quarter over the past 10 years. Since 2012, over 64 million square feet was been absorbed, with 28.0 million square feet coming from new construction. Demand has spurred scarcity and development; however, new supply has barely kept up with demand, as the overall vacancy rate has gone from 12.0% in 2012 to 3% today. In 2022, over 6.6 million square feet of new construction is scheduled to be completed, with nearly 90% being bulk warehouse product.