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Detroit Market Reports

Detroit Office Market

Average Asking Rent (Price/SF) $19.43
Vacancy Rate (%) 15.6%
Net Absorption (SF) 848,358

Metro Detroit's office vacancy rate fell 50 basis points to 15.6% during the second quarter of 2018, as just over 848,000 square feet was absorbed. The Detroit Central Business District continues its historic trend of growth, as Ford Motor Company announced major investments into the city that include the purchase of Michigan Central Station. In the suburbs, quarterly absorption was bolstered by United Shore's move into its new, 638,000-square-foot headquarters at 585 South Boulevard in Pontiac.

Detroit Industrial Market

Average Asking Rent (Price/SF) $5.39
Vacancy Rate (%) 4.2%
Net Absorption (SF) 2,028,446

The metro Detroit industrial vacancy rate fell 60 basis points to 4.2% during the second quarter of 2018, as just over 2.0 million square feet was absorbed. Three completed construction projects in Livonia, Auburn Hills and Plymouth accounted for 50.0% of the overall absorption. Despite extremely low vacancy rates in most submarkets, the number of active construction projects continued to fall. Thirty-two active construction projects were underway during the second quarter of 2018 across metro Detroit, down from its peak of 37 during the third quarter of 2017. New construction starts have dropped dramatically. The second half of 2017 saw 18 new construction starts, compared to ten starts during the first half of 2018. The second quarter of 2018 saw just four starts. By year's end, active construction could be down to roughly eight projects. The lack of new construction will prolong the scarcity of available space; particularly in areas of Oakland County and Macomb County were vacancies are below 3% and in Wayne County where bulk warehouse vacancies are under 2%. Uncertainty with NAFTA negotiations, ongoing tariff disputes and rising interest rates are trumping positive market conditions such as growing GDP, healthy U.S. automotive sales, reduced corporate tax rates, low unemployment rates and higher consumer confidence. This uncertainty is creating unease among companies looking to invest significant capital in new facilities. Nevertheless, the market will likely absorb another 5.0 million square feet in ongoing build-to-suit by year-end.

Detroit Office Market Report
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Detroit Industrial Market Report
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