Office Ends 2017 On a High Note
Metro Detroit’s office market finished 2016 on an upbeat note, posting positive statistics in the fourth quarter that built on previous momentum. The overall market experienced a 40 basis point decline in vacancy, and reported 659,040 SF of positive absorption. The market also reported an $.18 increase in market rents, which are all a welcome development for landlords.
2016 will go down as the year the market regained its footing. In the sales market, buildings are trading for healthy prices again—gone are the bargain basement days of 2013. On the leasing side, tenants are acting with more confidence—signing longer-term leases, and requesting modern, top-of-the-line tenant improvement allowances. Across Metro Detroit, the market has proven the concept that landlords who invest in their buildings are able to get their buildings leased, which is a positive development.
Into 2017, expect a strong year for office leasing. Many buildings that were purchased out of special servicers have completed their renovations, offering tenants the modern, technology-driven look. Moreover, tenants and investors continue to have confidence in the market, and are moving forward with deals. Expect absorption, vacancy, and rents to grow in 2017.