Most of the leases were either signed or renewed for about 3,000 sf. However, the City of Detroit renewed and expanded its lease at the First National Building for 105,000 sf, and at the Cadillac Tower for 170,000 sf. Also, in the Penobscot Building, Tanoury, Corbet, Shaw, Nauts & Essad PLLC renewed for 16,000 sf, and Detroit Commerce Bank renewed for 10,500 sf.
Northern Group did not divulge the lease rates for the transactions. The average lease rate for class B office properties in the Detroit area is $22.20 per sf, according to a fourth-quarter Grubb & Ellis market report. A spokeswoman for Northern says the average lease rate in the buildings is $14 per sf.
The spokeswoman says the Downtown Detroit office market is going very well, much better than can be expected in the Michigan economy. The Downtown area has about 30% vacancy, total, for office space, according to Grubb & Ellis, whereas the overall Detroit-area vacancy rate is about 21%. The spokeswoman says the Cadillac has 15% vacancy, the First National Building has 25% vacancy and the Penobscot has 30% vacancy.
"There is tremendous growth going on, with cranes over the Book Cadillac and the expanding casinos," the spokeswoman tells GlobeSt.com. "We're starting to get some life again, some traffic. There's a buzz, a vibrancy in the Downtown."
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