Quiet Start to 2016
The first quarter of 2016 proved to be a quiet but solid quarter for Metro Detroit’s retail market. The trends showed steady improvement over the previous quarters, and steady improvement since the market’s worst year of 2010. In the first quarter, the vacancy rate declined from 8.3% to 8.2%. The first quarter also reported 377,853 SF of positive absorption, which represents a modest follow-up to the previous quarters.
After a number of headline deals and newsworthy closings, from new luxury retail downtown to the closure of Northland Mall, the first quarter of 2016 was relatively quiet. All eyes are turning towards Downtown Detroit, with new restaurants and a new Nike store coming into the pipeline. In the suburbs, many national fast casual chains are making their first foray into Michigan as well, such the Chicago-base Naf Naf Grill—a Mediteranian concept that has two suburban Detroit locations in the works.
Moving forward, the second quarter of 2016 is expected to post modest but positive trends for Metro Detroit’s retail sector. Metro Detroit’s main employment base, the auto industry, continues to post positive trends, which creates a positive feedback loop for the entire real estate market. Into the summer of 2016, expect the confident economic outlook to drive positive absorption, and from there, small but steady gains in rents.