Farmington Hills has had a particurily tough go of it. In 2003, the net absorption rate for office space in the city was negative 130,298 sf. The vacancy rate there is 24.1% in December '03, compared to 2.6% in second quarter '99. "Tenants are in an exceptional position to take advantage of the opportunity," the report states.
The average asking rental rates along the corridor are $25.48 for class A space; $23.18 for class B space. Class C space in the corridor is often interchanged with light industrial and high-tech zoned property and can be leased in the $8-$15 range. The corridor has just over 10 million sf of class A space, of which about 330,500 sf are available for sublease.
"For those tenants looking to purchase a building, good luck to you. Small office buildings measuring under 15,000 sf have been reaching prices in the $120- to $140-sf range," the report says.
"There has been an influx of principals looking to lease to their own company. This has proven to be more difficult and expensive than expected given the light float product in this category," continues the report.
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