Keynoter Doug Rothwell, the former director of the Michigan Economic Development Corp. who now heads General Motors' worldwide real estate program, sees things picking up nationally and in Detroit. "Low interest rates, tax cuts and defense spending are all boosting the US economy and we see that continuing," Rothwell told the 200-plus gathered at the Ritz-Carlton in Dearborn.
Rothwell said drags on the economy include rising gasoline prices, a widening trade deficit and concerns about inflation. "But we do think we are gaining ground economically," he says.
That's the national outlook – what about Detroit? "The economy is picking up in Detroit, but it may be a couple years before that filters down into a stronger commercial real estate market," he added.
Rothwell said office vacancy in the Detroit region was at 6% in 2000 before the tide turned. In 2001, office vacancy was 21%. Rothwell said experts are predicting the vacancy rate drops to 18.1% in 2005 and 12% by 2009.
Jeff Kaczmarek, senior vice president at the MEDC, said after several years of job losses in Michigan, the University of Michigan is predicting an increase of some 18,000 jobs in the state in 2004 and more than 80,000 new jobs in 2005. And after seeing disposable income rise by 2% in each of the past several years, U-M is calling for growth of disposable income to be above 3% over the next couple of years, he added.
Comments by Rothwell and Kaczmarek were reinforced by speakers throughout the day at the forum. "The office market is still a tense place to be right now," said Mitchell Lipton, executive vice president at Freidman Real Estate Group. "The deals that are being made seem to be generally from consolidations. We're not seeing the positive absorption rates we'd like to see. The good news, however, is that it looks like the days of a shrinking market are behind us." Produced by Real Estate Media, parent company of GlobeSt.com, RealShare Detroit was sponsored by Cushman & Wakefield, Fremont Investment & Loan, GVA Strategis, Marcus & Millichap and NAI Farbman, as well as CapLease, Colliers International and Ford Land Development.The conference began with a welcome and introduction from Jonanthan A. Schein, president and CEO of Real Estate Media.
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