Metro Detroit’s Office Market Sees 19th Consecutive Quarter of Positive Absorption
Commercial real estate advisory firm Newmark Grubb Knight Frank measures available office space as an economic indicator.
Commercial real estate advisory firm Newmark Grubb Knight Frank (NGKF) today released its first quarter 2017 office trends data for the Detroit region. According to the reports, metro Detroit’s office market hit its 19th quarter of positive absorption, highlighted by an office market vacancy of 16.5 percent, a 70 basis point decrease from last quarter.
The report also noted 697,000 square feet of office space was absorbed, totaling 7.8 million square feet. The Detroit Central Business District (CBD) led the way, accounting for 30 percent of overall absorption, leaving vacancies at record lows.
“The level of investments pouring into the Detroit Central Business District, not only in terms of the office market, but also retail and housing, will continue to make the CBD a magnet for companies,” says Fred Liesveld, managing director of NGKF’s Detroit office.
Office markets in Troy, Farmington Hills, and Novi also posted positive numbers, while Southfield was the only suburb to see an uptick in vacancy for the quarter. Specifically, Troy’s overall market vacancy rate fell 140 basis points to 19.5 percent and 114,000 square feet was absorbed, while Farmington Hills saw a 100 basis point decrease to 11.7 percent, and absorption of more than 62,000 square feet. The Novi office market vacancy rate fell from 18.9 percent to 11 percent, due to an absorption of 78,000 square feet, while Southfield’s rate increased 20 basis points to 22.1 percent, as 31,000 square feet of net vacant space was added to the market.
Blue Cross Blue Shield of Michigan is expected to offset that vacancy when the company relocates employees from Downtown Detroit and various other locations into roughly 65,000 square feet in the Town Center complex.