“Until more supply hits the market, we will likely see lease rates continue to rise as vacancy is incredibly tight,” he adds. “There are a lot of active users looking to expand or enter the market, but supply remains the big question.”

And even though there are a lot of projects underway, it might not be enough to satisfy demand. Very little of the 7.6 million square feet underway is speculative, Rogers says, part of a longstanding pattern in the Detroit market. “Builders and investors are being very conservative.”

“We simply need more supply,” and the only way that happens is if developers look at the incredibly low vacancy rate and decide “we're missing out on some deals.”

One of the reasons the market has historically approached development so conservatively is the absence of truly national developers, Rogers adds. “You usually don't see Prologis and others like that here,” perhaps because they never got comfortable with the ebb-and-flow of the automobile industry.

Other third quarter highlights include:

• The largest lease was with Progressive Distribution for 638,236 square feet in Detroit.
• The unemployment rate in Michigan was 4.1%.
• Total absorption over the last four quarters was 4.2 million square feet.

But even if development does pick up next year, Rogers does not “see the supply getting out of control. There is a lot of discipline here.” But that also makes it challenging for users who may need speculative space so they can quickly expand. “That's a tough riddle to solve.”