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Area Retail Market Rated as 'Sluggish'

DETROIT-Despite modest sales volume this year, Marcus & Millichap ranks the Detroit market at No. 36, the same position as last year, getting low scores for rent, employment and household growth.

By Dan Heaton | Updated on June 03, 2004

DETROIT-Detroit gets mixed marks in a new report on the local retail market. Marcus & Millichap Real Estate Investment Brokerage Co. has released its National Retail Index for 2004, which ranks the Detroit market at No. 36, the same position as last year.

Marcus & Millichap says the Detroit retail market is hindered by a sluggish economy; however, the economy appears to be stabilizing and modest improvement is expected during the second half of the year. Low scores for rent, employment and household growth were factors in the city’s ranking near the bottom of the index.

Marcus & Millichap does say Detroit will maintain a modest retail property transaction volume in 2004, albeit at levels higher than those recorded in years prior to 2002, and prices will continue to favor sellers. “In 2003, sales velocity fell 40% from the 2002 peak with 103 properties changing hands,” comments Steven R. Chaben, vice president and regional manager of Marcus & Millichap’s Detroit office. “This year, single-tenant net-leased properties continue to garner the greatest interest and are trading for cap rates in the 6.75% to 7.75% range, followed by big-box power centers and grocery-anchored centers. Buyers will continue to comb highly coveted Oakland County, along with northern Macomb County and Wayne County, for opportunities.”

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