Detroit Office Market
| Average Asking Rent (Price/SF) | $20.22 |
| Vacancy Rate (%) | 16.2% |
| Net Absorption (SF) | -498,223 |
The Metro Detroit office market vacancy rate edged up 80 basis points to 16.2% during the fourth quarter of 2020 as just over 548,000 square feet in net vacancies were added to the market. 2020 was a challenging year for the office market. The pandemic led to a slowdown in growth in the service sector and forced companies to implement work-from-home policies. As a result, the office market recorded nearly 780,000 square feet in net vacancies in 2020, a level not seen in 10 years. Also contributing to increased vacancies was newly renovated space coming back on the market in Detroit and Mercedes-Benz vacating a large block of space in Farmington Hills as it begins building a new headquarters facility. Meanwhile, sublease space trended up 7.0% to 1,067,288 square feet from pre-lockdown measures in the first quarter to the end of the fourth quarter in Metro Detroit’s core office markets. However, the increase was 5.0% when compared to levels during fourth-quarter 2019.
Download Detroit Office Market Report 4Q20Detroit Industrial Market
| Average Asking Rent (Price/SF) | $5.89 |
| Vacancy Rate (%) | 4.3% |
| Net Absorption (SF) | 1,303,245 |
The Metro Detroit industrial vacancy rate fell 20 basis points to 4.3% during the fourth quarter of 2020, as just over 1.3 million square feet were absorbed. Total net absorption for the year amounted to nearly 1.4 million square feet, compared to 4.5 million square feet in 2019. The difference is attributed to the drop in pre-leased speculative and build-to-suit completions in 2020 compared to 2019. In addition, many companies continue to vacate large pre-1960 era facilities in exchange for facilities that offer more efficient space to manufacture or store and distribute goods. The industrial market still has a strong undercurrent of demand with 6.5 million square feet of mostly pre-leased new product under construction during fourth-quarter 2020. Bulk warehouse makes up 72.0% of overall construction activity, not surprisingly, as the vacancy for bulk distribution space is just 1.3%. Many of the new bulk warehouse projects are being developed in Southern Wayne County, where companies such as Amazon, Lowes, Kroger, Pitney Bowes, DHL and Performance Food Group are pre-leasing significant blocks of space. Demand is also strong in Macomb, Southeast Oakland and, increasingly, the City of Detroit.
Download Detroit Industrial Market Report 4Q20