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Detroit Office Market Vacancy Running at 20%

DETROIT-Office space vacancy in the Detroit market still hovers around 20%, says a fourth quarter real estate report issued by Grubb & Ellis.

By Dan Heaton | Updated on January 29, 2004

DETROIT-Negative absorption in the metro Detroit office market has declined for the fourth consecutive quarter in fourth quarter 2003, according to a quarterly report issued by Grubb & Ellis of Detroit. Some 13.5 million sf of office space is vacant in the market, about 20% of the total space. In the Detroit CBD, the vacancy rate is 29.3%.

The asking rate for Class A space, on average, around the market is $26.32. In the CBD, the asking rate is $26.52. The Class B average asking rate is $23.32. “The caveat is that while the improved economic conditions are benefiting the industrial sector, they will only create a slow trickle-down effect on demand for office space in the near future for Metro Detroit,” the report says.

In Detroit’s principal industry—automotive—more tenants related to the industry’s vacated space, the Grubb & Ellis report says of the fourth quarter. “The semi-good news for landlords is that many tenants are responding to market conditions and leasing space at reduced rates. With demand growing slightly, the significant supply of office space on the market will continue to hold asking rates at reduced levels,” the report went on to say.

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