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Detroit Area Will Continue to Do Well With Office, Report Says

SOUTHFIELD, MI-Marcus and Millichap predicts property values should continue to rise after last year's gains in the city and suburban markets. "A healthy number of sales and more large transactions" are predicted.

By Robert Carr | Updated on February 15, 2001

SOUTHFIELD, MI-Strong market conditions have finally persuaded local builders to pick up the pace of construction in the Detroit area, says Sean Hamilton of Marcus and Millichap. “Though the building activity is justified, construction levels will justexceed demand as the Detroit, and national economies, head toward a slowdown,” he says.

Hamilton says despite the predictions of slightly higher vacancy rates and slower rent growth, the Detroit office market will remain healthy. Average vacancy rose 1.8% in 2000, due mainly to reduced absorption. Rents grew at a slower pace during the year, but still posted a 7.8% gain.

He said the area is not expected to experience a major downturn once automotive sales begin to cool, for the following reasons:

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