"The city's ability to attract companies will be especially crucial this year as office completions will be relatively high and little relief from the economic slowdown is onthe horizon," he adds. "Absorption of new space will be of prime importance in keepingrents rising and vacancy down."
Following are some of the most significant aspects of the firm's office research report:
* Construction starts will fall this year, as the pace of absorption will be uncertain in the face of the continuing downturn in the economy.
* Oakland County is by far the leader in the region with an estimated 2.2 million sf of office product scheduled to come on line in 2001, accounting for approximately 85% of all new space in the Detroit area.
* Average vacancy is forecast to rise slightly in 2001 due to job cuts and increasing office stock, but will remain below 10%.
* On average, rent growth will slow to 4% this year, compared with 6.8% in 2000.
* Office buildings in the Detroit area will experience average rent increases of approximately 4% in 2001, with class C product continuing to attract companies reluctant to sign expensive class A leases.
* Sales are forecast to pick up this year, as product that has been recently completed will be more actively traded.
* Per square foot sales prices are forecast to rise by approximately 4.5%, just above the gains expected for rents, as low interest rates give buyers an opportunity to pay slightly more and still achieve desired returns.
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