Real estate and investment management firm JLL today released its annual report on Detroit’s commercial tenants, which shows the central business district is in its eighth consecutive year of occupancy growth, has record-setting rental prices, and a landlord-friendly market. Additionally, overall vacancy was at 7.5 percent as businesses are increasingly choosing to locate downtown.
“We’ve seen an important shift in demand for skyline office buildings in Detroit,” says Harrison West, a research analyst for JLL. “With multiple transformational projects in the pipeline, the future looks bright for the downtown Detroit office market and the skyline could look much different five years down the road.”
Additionally, the report reveals net absorption has totaled at 1.1 million square feet since 2012, and vacancy remains below the national average of 12.9 percent. Detroit’s vacancy levels were 17.1 percent in 2012.
High profile tenants continue to be attracted to Detroit’s skyline, including Microsoft, which recently announced its move from Southfield to Detroit’s One Campus Martius building. JLL expects Detroit’s skyline to look “much different” in the coming years, following announcements of major transformational projects that will bring mixed-use office space to the downtown area, including the Hudson’s site, the Monroe Blaco, and along the riverfront east of the Renaissance Center.
The report also notes that increases in desirability and decreasing vacancy levels gives Detroit landlords the upper hand, leading to an increase in rental prices to $22.55 per square foot on average.
Investors and tenants can access JLL’s Skyline via a digital platform. The interactive website features JLL’s exclusive market insights regarding office supply, demand, rents, leverage, and investment into 57 commercial markets across the U.S. and Canada. JLL’s platform can be found here.