Detroit Office Market Report

Vacancy drifts toward financial crisis levels. The past six months have been a difficult stretch, with Detroit’s vacant office stock total climbing by nearly 2.3 million square feet during that span ended in March. This occurred alongside the completion of just 230,000 square feet, the smallest two-quarter supply influx since early 2020. Headwinds are stemming from the demand-side as leases signed prior to the pandemic expire at a greater frequency, while an uncertain economic outlook and the realized utility of hybrid work prompt firms to cut costs by reassessing office needs. Meridian Health subletted several urban core spaces late last year, and Comerica Bank is vacating roughly 1 million square feet spanning multiple buildings in Livonia and Auburn Hills to consolidate operations to 275,000-plus square feet across two spots in Farmington Hills. Actions like these may persist as 2023 progresses, prolonging vacancy pressure. The rate will approach 19 percent by year-end, thinning the gap relative to the 21 percent peak recorded during the financial crisis.