Detroit Experiences Positive Absorption in Office Market

DETROIT-Despite facing a tenuous future from General Motors’ cost cutting measures as well as Kmart’s departure to the metropolitan Chicago area, the metro area’s office market continued to show signs of strength. According to the most recent report released by Grubb & Ellis, the market first turned bleak in January 2001 when the Motor City saw the depletion of its manufacturing sector.

During the three years of corporate downsizings and bankruptcies, more than five million sf of vacant space was added to the market causing the vacancy rate to skyrocket from 11.1% during the first quarter of 2001 to 20.6% by the fourth quarter of 2003. At the end of the second quarter of 2005, the office vacancy rate for the metro area stood at 20.9%, but the quarter marked the fifth time in six quarters that the region enjoyed a positive absorption of office space. Also, Grubb says, 667,167 sf of office space is under construction in the Detroit area.