The vacancy rate fell 40 bps in the last quarter, DeGroot points out. Furthermore, “construction is at a rate that we haven't seen before.” At the end of this year, developers had 5.8 million square feet in 33 major structures underway, a big boost from last year, when 3.3 million square feet was under construction. And it's not just auto-related businesses that are expanding.

“Auto companies are doing very well, but it's having a trickle-down effect on many industries,” says DeGroot. Like the Chicago region, the Detroit area has witnessed the construction of a new set of bulk warehouses both for Amazon and other distributors of food products and commercial goods. Many distributors have clustered in Southern Wayne County around the airport, and “you can count on your hand the number of options available.”

The vacancy rate there sank to a historic low of 2.5% during the last quarter, NGKF data show. Absorption has slowed due to the limited number of vacancies, but Fiat Chrysler has announced plans to construct a 500,000 square foot parts distribution warehouse at I-275 and Pennsylvania Rd. in Romulus. Developers have also secured municipal approval for several potential projects including the Romulus Commerce Center, a four-building complex with one million square feet.

Things have gotten so tight that bulk users have started looking for space in Western Wayne County, which historically has been more focused on manufacturing. A year ago, Ashley Capital bought and renovated for bulk users the vacant General Motors Powertrain Engine Plant in Livonia, and quickly found enough tenants to fill the one million square foot structure.

And more traditional users of space in this portion of the county have also continued to expand. The Ford Motor Co., for example, recently signed a long-term lease to occupy all 754,744 square feet at 28301 Schoolcraft Rd. in Livonia, another building owned by Ashley Capital. As reported in GlobeSt.com, Technicolor had occupied the space for more than 15 years, but notified Ashley that it would vacate the property upon lease expiration. But Ford's decision assured there would be virtually no downtime for the landlord.

GM's long-expected announcement that it would invest another $1 billion in its US operations makes it likely that the regional economy will keep growing. In fact, DeGroot says that since the start of the year, industrial developers have announced plans for several more projects, increasing the number underway from 33 to 40.

Ford Motor Co.

DETROIT—In some ways, the Detroit industrial market has mirrored the rise also seen in Chicago's industrial market. Both have performed very well in the post-recession era and continue to show resilience and an ability to expand. But while Chicago has been heavily dependent on bursts of activity from companies involved in e-commerce, Detroit has an additional source of energy.

“The auto industry is the main driver for the Detroit metro economy,” John DeGroot, vice president of research for Newmark Grubb Knight Frank, tells GlobeSt.com. “There is a direct relationship between the level of auto production and the vacancy rate for industrial properties.”

In 2010, just as the worst effects of the recession had begun to dissipate, annual auto production was less than 10 million vehicles and the vacancy rate stood at more than 16%. “After 2010, auto production took off like we've never seen it before,” says DeGroot. And the vacancy rate now stands at just 5.3%, according to a year-end report just issued by NGKF.

However, auto production does seem to have peaked, or at least reached a plateau. Auto inventories have begun to rise, and production figures for 2016 were roughly equal to the numbers hit in 2015, when 17.8 million vehicles were produced. But the region's industrial market as a whole just keeps climbing.

The vacancy rate fell 40 bps in the last quarter, DeGroot points out. Furthermore, “construction is at a rate that we haven't seen before.” At the end of this year, developers had 5.8 million square feet in 33 major structures underway, a big boost from last year, when 3.3 million square feet was under construction. And it's not just auto-related businesses that are expanding.

“Auto companies are doing very well, but it's having a trickle-down effect on many industries,” says DeGroot. Like the Chicago region, the Detroit area has witnessed the construction of a new set of bulk warehouses both for Amazon and other distributors of food products and commercial goods. Many distributors have clustered in Southern Wayne County around the airport, and “you can count on your hand the number of options available.”

The vacancy rate there sank to a historic low of 2.5% during the last quarter, NGKF data show. Absorption has slowed due to the limited number of vacancies, but Fiat Chrysler has announced plans to construct a 500,000 square foot parts distribution warehouse at I-275 and Pennsylvania Rd. in Romulus. Developers have also secured municipal approval for several potential projects including the Romulus Commerce Center, a four-building complex with one million square feet.

Things have gotten so tight that bulk users have started looking for space in Western Wayne County, which historically has been more focused on manufacturing. A year ago, Ashley Capital bought and renovated for bulk users the vacant General Motors Powertrain Engine Plant in Livonia, and quickly found enough tenants to fill the one million square foot structure.

And more traditional users of space in this portion of the county have also continued to expand. The Ford Motor Co., for example, recently signed a long-term lease to occupy all 754,744 square feet at 28301 Schoolcraft Rd. in Livonia, another building owned by Ashley Capital. As reported in GlobeSt.com, Technicolor had occupied the space for more than 15 years, but notified Ashley that it would vacate the property upon lease expiration. But Ford's decision assured there would be virtually no downtime for the landlord.

GM's long-expected announcement that it would invest another $1 billion in its US operations makes it likely that the regional economy will keep growing. In fact, DeGroot says that since the start of the year, industrial developers have announced plans for several more projects, increasing the number underway from 33 to 40.