Detroit Office Market Report
Metrowide Office Sector Recalibration Persists, but
Soft Performance Trends not One-Size-Fits-All
Four lower-cost submarkets have shown resilience. Detroit entered the second half of 2023 with office vacancy sitting at a 35-quarter high; however, headwinds are not equal across the market. In fact, four submarkets — North Oakland, Macomb, Northern Outlying and Downriver — registered year-over-year vacancy declines in June. The latter two of these areas also maintained sub-10 percent rates entering the third quarter of 2023, significantly undercutting the marketwide measure. While headline leases in these submarkets have been rare, they are proving to be top choices for firms seeking 10,000- to 20,000-square-foot floor plans. Cost advantages are likely a consideration, as all four areas have an average asking rent below $17 per square foot, and excluding North Oakland, offer the lowest rates in the market. These four submarkets combine for less inventory than just the urban core; therefore, their strength has had a limited influence on metro fundamentals.