Metro Detroit Vacancy Drops Below 25%

DETROIT—Battered by the recession, municipal bankruptcy, and its share of a statewide plague of job losses, few metropolitan areas in the US have suffered as much as Detroit. The office market, however, has recently shown some sign of healing. The office vacancy rate fell to 24.9% during the third quarter of 2013, a level not seen since the fourth quarter of 2009, according to the latest Newmark Grubb Knight Frank market report. Slightly more than 354,000-square-feet was absorbed during the quarter, pushing year-to-date total positive absorption to about 1.1-million-square-feet. The trend reverses a slide that began in early 2007 in both the CBD and suburbs.

“Although vacancy matches 2009 levels, the office market today looks significantly different than it did pre-recession due to robust activity in the CBD over the past several quarters,” says Fred Liesveld, executive vice president, managing director. “In 2007, the Detroit CBD had a vacancy rate of 33% while today it stands at 26.5%. And now we are starting to see demand pick up in the suburban office market, which is great news for southeastern Michigan and underscores the overall improvement in the region.”