Vacancy at a Record Low
Metro Detroit’s industrial market continues to post record trends. The market currently posts a 4.7% vacancy rate, which is the lowest reported vacancy rate on record. With the first quarter of 2016 reporting positive trends, the once pro-tenant market has created rather difficult conditions for tenants, expecially in top-tier submarkets.
For the first quarter, 2,314,506 SF of space was absorbed, an excellent complement to the previous quarter’s 3,153,344 SF. The market’s vacancy rate currently stands at 4.7%, compared to the previous quarter’s 5.0%. With just 519,807 SF of newly constructed space delivered in the quarter, there is little relief on the horizon for industrial users looking for the market to loosen up.
Into the second quarter of 2016, barring any unforseen circumstances, expect absorption, rent growth, and vacancy to continue to move in the same direction. Industrial users continue to demand more space, while little new construction has been delivered to the market. The lack of new competition in the Detroit market will continue to tip the scales in the favor of landlords for the foreseeable future.