Scroll Down

Market Report

Detroit Office Investment Forecast

2020 Outlook

Detroit Vacancy Stable Near 12-Year Low, Sparking Increased Development

 

Vacancy is hovering near the 12-year low. Strengthening demand for office space amid a lack of speculative construction and the conversion of vacant office buildings into alternative uses is holding vacancy tight. Although deliveries will climb in 2020, heavy pre-leasing will lessen the impact on vacancy and push rent higher. The expansion of One Campus Martius is the largest building due in the market this year. The 310,000-square-foot addition to the former Compuware building in Detroit is already fully leased. Deliveries will remain heightened as Ford’s Michigan Central Station, Hudson’s Tower and a new headquarters for TCF Financial are finalized. These developments and newly renovated buildings will add more than 2 million square feet to inventory over the next few years. Meanwhile, rapidly rising rents in downtown Detroit have some tenants searching for less expensive space outside the core. This is generating office demand in the New Center and Midtown neighborhoods of Detroit. Suburban vacancy has also tightened considerably from the cyclical peak. The suburbs are scheduled to receive 400,000 square feet of office space in 2020. One significant project is the 140,000-square-foot Henry Ford Health System outpatient building in Royal Oak.

Related Research

Back to top