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Vacancies, Low Absorption Hit Office Owners

DETROIT-A rocky economy boosts the amount of empty space in most Southeast Michigan submarkets, Paragon Corporate Realty Services' Matthew Fenster says, but overbuilding has not occurred in this downturn.

By Robert Carr | Updated on February 15, 2002

DETROIT-Metropolitan Detroit’s office market recorded more than 1 million sf in negative net absorption in 2001. Corporate consolidations and closings boosted the overall vacancy rate in the combined class-A and class-B markets to 13.5%, according to a year-end office space report by Paragon Corporate Realty Services of Farmington Hills.

“With the increased vacancy rates, overall vacancy remained much lower than the early 1990s, when vacancy rates approached 20%,” says Matthew Fenster, Paragon’s executive director. “Having learned hard lessons, most developers avoided overbuilding, allowing for a softer landing for the local real estate markets.”

The class A vacancy rate increased to 10.1% from 8.2% in the third quarter, he reports. Submarkets such as Southfield and Detroit had higher vacancies.

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