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Detroit Office Market

Average Asking Rent (Price/SF) $19.50
Vacancy Rate (%) 15.4%
Net Absorption (SF) 195,438

Metro Detroit's office vacancy rate fell 30 basis points to 15.4% during the third quarter of 2018, as just over 195,000 square feet was absorbed. There are signs the office market may be slowing down. With the exception of Auburn Hills, leasing activity declined in the suburbs, where most submarkets posted only nominal vacancy rate changes and sublease space is on the rise. Available sublease space totaled nearly 1.1 million square feet during the third quarter, which is nearly double the amount that was available at the same time last year. While absorption levels in the Detroit Central Business District have leveled off over the past few quarters, new future developments point to renewed strength in the city's office market.

Detroit Industrial Market

Average Asking Rent (Price/SF) $5.52
Vacancy Rate (%) 4.3%
Net Absorption (SF) 522,728

The Metro Detroit industrial vacancy rate held steady at 4.3% during the third quarter of 2018, as just over 482,000 square feet was absorbed. Five build-to-suit construction completions accounted for the bulk of absorbed space during the quarter. As a new deal to revamp and modernize the North American Free Trade Agreement (NAFTA) takes form, developers are betting on renewed confidence and demand in the market. This was evident as construction activity rebounded with five new projects totaling 1.3 million square feet breaking ground during the third quarter. Just over 60% of those new starts are speculative. Developers have seen success in past speculative development projects. Occupancy levels of the nearly 5 million square feet of speculative development built since 2013 is near 90%. Meanwhile, overall active construction totaled 6.5 million square feet during the second quarter, up from 5.6 million square feet during the previous quarter.



Detroit Office Market Report
3Q18
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Detroit Industrial Market Report
3Q18
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