Industrial Takes a Short Break

For tenants in Detroit’s low-vacancy industrial market, there were some signs of relief in the first quarter of 2017. The market’s vacancy rate increased from 3.4% to 3.6%. This vacancy rate is still enough to make tenants cry in their beer and landlords crack open champagne. For landlords, rents increased by $.14, and the market for quality buildings in top submarkets remains tight.

While the market did post a small slowdown in terms of vacancy and absorption, much of the news in the Detroit market remains positive. More new product is in the pipeline, much of it in the high-quality, new warehouse variety that institutional investors favor. More importantly, in terms of user sales, per SF prices continue to climb.

Moving into the middle of 2017, we believe that rents, absorption, and vacancy will continue to move a positive direction. Although new product is hitting the market, demand for shop space and warehouse space remains strong. Expect this demand to drive growth in rents and sale prices into the summer and fall of 2017.