Net absorption has decreased in office space, availability has increased in warehouses and construction activity has stalled across the board.
The only thing that has saved the area has been incentives, says Marianne Evans, spokeswoman for the company.
"From Empowerment Zones to the Michigan Economic Development Corp., local and state tax based incentive programs are helping real estate activity moving forward," she says.
For example, the I-75 corridor industrial submarket is going to benefit from two such incentive programs.
Recticel North American will be moving into a 260,000-sf development by Northern Equities in Independence Township, MI with the help of a tax incentive from the MEDC.Also, the Oakland County Economic Development Corp. and the MEDC have partnered with Osmic Inc. to expand their high-tech operation in Auburn Hills, MI.
Approximately 3.1 million sf of property was sold and leased in the Detroit industrial market in the third quarter, CB Richard Ellis says, but this represented a 32.6% decrease from the same quarter a year ago. Also, 5.2 million sf of industrial space was under construction, a 35.7% decrease from the 8.2 million sf under construction at the end ofthe second quarter.
The biggest news in office space was the increase of the vacancy rate to 13.3% in the third quarter, up from 9.8% in third quarter 2000. The largest increase was Auburn Hills, which has a 44.6% vacancy rate, more than double the vacancy rate of the city of Detroit. Also, there was 1.09 million sf of negative absorption of office space in this quarter. In the third quarter of 2000, there was 701,581 of net absorption.
Subleasing is still going on, and 1.2 million sf of office space now under construction, but the fundamentals of the local real estate economy remain healthy, according to CB Richard Ellis.
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