Newmark Grubb Knight Frank (NGKF) released its first quarter 2016 industrial trends data for the Macomb County this week. According to the report, the area’s industrial vacancy rate reached an all-time low this quarter for the submarket. The already tight Macomb County industrial real estate market became even tighter during the first quarter of 2016, as over 412,000 square feet of space was absorbed, leaving vacancy at an all-time low of 2.7 percent. Out of nearly 1,000 buildings over 20,000 square feet, only 26 in the entire county are physically vacant. The lack of supply is also pushing lease rates up. Since 2012, Macomb County’s average industrial asking lease rate has jumped 22 percent.
“Supply is so limited that users either have to consider new construction, renovate an existing building or find an occupied building that is underutilized,” said NGKF Senior Managing Director Mike Davidson.
A large share of absorption during the first quarter of 2016 came from AGM Automotive, LLC’s move into its completed 73,000-square-foot build-to-suit facility at Progress Park in Sterling Heights. Companies like AGM Automotive are choosing new construction because the existing options are very limited. These limited options and fast growing lease rates are leading developers to gradually increase speculative construction. One of the largest speculative projects is being developed by the Titan Group. The project will include three buildings ranging from 56,000 square feet to 122,000 square feet located in the Cherry Creek Corporate Park in Shelby Township. In the past two years, the Cherry Creek Corporate Park completed three major build-to-suit projects for Paslin Company, TransForm Automotive and JVIS USA totaling 420,000 square feet of industrial space. Meanwhile, a speculative 73,000-square-foot facility on Van Dyke Avenue in Sterling Heights is being developed by Mancini Enterprises and is expected to begin construction by mid-2016. Also in the planning stages is the redevelopment of the former Sunnybrook Golf Course in Sterling Heights into the Enterprise Industrial Park. The Sterling Group and J.B. Donaldson Company plan to develop the park to accommodate users from 50,000 to 800,000 square feet.
About Newmark Grubb Knight Frank
Newmark Grubb Knight Frank is one of the world’s leading commercial real estate advisory firms. Together with London-based partner Knight Frank and independently-owned offices, NGKF’s 12,800 professionals operate from more than 370 offices in established and emerging property markets on six continents.
With roots dating back to 1929, NGKF’s strong foundation makes it one of the most trusted names in commercial real estate. NGKF’s full-service platform comprises BGC’s real estate services segment, offering commercial real estate tenants, landlords, investors and developers a wide range of services including leasing; capital markets services, including investment sales, debt placement, appraisal, and valuation services; commercial mortgage brokerage services; as well as corporate advisory services, consulting, project and development management, and property and corporate facilities management services. For further information, visit www.ngkf.com.
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