(To read more on the industrial market, click here.)
(To read more on the net lease market, click here.)
DETROIT-Net absorption and vacancy rates in office and industrial properties in the metropolitan area improved during the first half of 2005, Collier's International reports. While Detroit's domestic automakers continue their various struggles, Collier's says the ongoing influx of foreign automakers into the region is helping both the industrial and office markets. Just recently Gov. Jennifer Granholm returned from a trade mission to Japan, seeking to continue to lure foreign automakers to create or expand US operations in southeast Michigan.
While the metropolitan area's office market experienced increased demand in the second quarter, rental rates in the region are continuing a downward trend, which Collier's says possibly signifies landlords' perception that the city is a long way from full recovery.
"Recent announcements of future job losses in the automotive industry and Kmart's relocation plans, combined with a state unemployment rate two full points above the national average, provide plenty of support to take precautions," the brokerage firm states in its mid-year report.
The office market realized net positive absorption of 741,980 sf during the second quarter, causing a 0.6% decrease in the overall vacancy rate to 15.2%. The overall asking rental rate decreased 4 cents to $20.40 per sf--10 cents lower than six months ago. On the industrial side of the house, nearly 4.5 million sf of absorption was realized throughout the first six months of the year, decreasing the overall vacancy rate to 12.7%--the lowest in two years.
Demand from national institutional owners and foreign investors have increased but private investors remain a predominant force in the local market. According to investment sales tracked over the past 12 months by Real Capital Analytics, private investors make up 29% of industrial acquisitions and 13% office acquisitions in the metro Detroit market.
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