With available sublease space considered, that vacancy rate jumped to 17.6% in first quarter, up from 13.7% at year-end and from 9.1% a year ago. That is the highest overall class-A vacancy rate recorded since the metro Detroit office market slowdown began, says Matthew Fenster, Paragon's executive director.
"The good news is that activity -- both in terms of users looking at space and actual signed leases -- picked up noticeably in first quarter. I think metro Detroit's market bottomed out early in the year, and the upswing is now beginning," Fenster says.
Much of the activity came from professional and consulting firms, while corporate users and automotive suppliers tended to remain on the sidelines, Fenster says.
Free rent grew common in every submarket during first quarter, even from property owners traditionally reluctant to offer it. Increasingly aggressive property owners typically gave several months of free rent on a five-year lease, and added more for longer lease terms, Fenster says.
Broker incentive programs also became more prevalent, with property owners offering everything from $50 a showing to trips, motorcycles and cars for large leases, he says.
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