Newmark released its first quarter 2020 industrial trends data for the Detroit region this week.
Metro Detroit’s industrial vacancy rate held steady at 4.0 percent during the first quarter of 2020. New construction completions accounted for nearly half of the quarter’s 780,000 square feet of overall absorption. Most submarkets continued to see falling vacancies and quick re-leasing time. Construction was also robust; more than 605,000 square feet of construction was completed, and another 4.6 million square feet is underway. Though first quarter data indicated a continuation of the Detroit industrial market’s strong performance, in the current economic and health situation, real estate perspectives are speculative and will continue to evolve over days, weeks and months. Along with other economic factors, the halt in automobile and automotive part production caused by COVID-19 poses a financial burden for suppliers and connected companies down the line.
“After 10 years in expansion mode, the Detroit industrial market may experience some challenges as we move forward,” said Fred Liesveld, Managing Director of Newmark’s Detroit office. “However, the performance of the industrial market during the first quarter in terms of positive absorption and construction activity illustrated the underlying strength of metro Detroit’s manufacturing and logistics sectors.”
John DeGroot, Research Director of Newmark’s Detroit office added, “Looking ahead, there are thirteen major industrial firms scheduled to move into new build-to-suit developments totaling over two million square feet in the coming months. In addition, eight speculative developments are scheduled to be completed in the coming months that will add 2.4 million square feet of new supply or a potential 60 basis point vacancy rate increase of to the market.”
See the full report for submarket-specific summaries here: http://www.ngkf.com/Uploads/FileManager/1Q20-Detroit-Industrial-Market.pdf
Newmark (“Newmark”), operated by Newmark Group, Inc. (“Newmark Group”) (NASDAQ: NMRK), is one of the world’s leading and most trusted commercial real estate advisory firms, offering a complete suite of services and products for both owners and occupiers. Together with London-based partner Knight Frank and independently-owned offices, Newmark’s 18,000 professionals operate from approximately 480 offices on six continents. Newmark’s investor/owner services and products include investment sales, agency leasing, property management, valuation and advisory, diligence, underwriting, government-sponsored enterprise lending, loan servicing, debt and structured finance and loan sales. Occupier services and products include tenant representation, real estate management technology systems, workplace and occupancy strategy, global corporate services consulting, project management, lease administration and facilities management. For further information, visit www.ngkf.com.
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