DETROIT—The industrial market throughout this metro area continues to expand. Driven by the growth of facilities dedicated to e-commerce, along with a strong auto sector, in the third quarter the vacancy rate fell to 5.3%, a drop of 20 bps, and 1.4 million square feet was absorbed, according to a new report from Newmark Knight Frank. This marks the 28th consecutive quarter of expansion.
Furthermore, rental rates have kept rising, and developers have pushed new construction to an unprecedented level. Since the third quarter of 2016, the average effective lease rate paid by tenants has risen 8.25%, while construction levels have risen 95%. And one firm plays a key role.
“Amazon accounts for about 45% of the new construction in Metro Detroit,” John DeGroot, research director of NKF's Detroit office, tells GlobeSt.com. “From 2014 to 2017 just over 6.6 million square feet of new industrial construction had been delivered,” but as of the third quarter, active construction reached 8.2 million square feet.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
