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Multifamily Market Stable, Marcus & Millichap Says

DETROIT-The company's Detroit office says the area multifamily rental market is "stabilizing," with effective rents expected to begin creeping up next year. Cap rates will remain lowest in Auburn Hills, Farmington Hills and Ann Arbor, the firm predicts.

By Dan Heaton | Updated on June 08, 2004

DETROIT-A national real estate company is saying Detroit’s multifamily rental market appears to be stabilizing, but adds challenges remain. “Despite an economy that is struggling to gain steam, overall vacancies will remain stable throughout the year,” comments Steven R. Chaben, first vice president and regional manager of Marcus & Millichap Real Estate Investment Brokerage Co.’s Detroit office.

“Modest construction levels, a slowing in the flight to homeownership and the likely increase in leasing traffic toward the end of the year underpin this outlook,” Chaben adds. “We expect rents to stabilize with slight upward pressure on effective rents going into 2005.”

The reports says that while construction will be concentrated in the Westland, Novi/Livonia and Macomb County submarkets, developers have been drawn to Detroit’s CBD as optimism is being spurred by the significant capital investments that are changing the face of Downtown. The overall market vacancy rate has stabilized and is expected to end 2004 at 6.9%, equivalent to the year-end 2003 figure, Marcus & Millichap says.

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