Downtown Remains Hot
The overall vacancy rate in the Metro Detroit office market continues to decrease, posting a second quarter vacancy rate of 10.9%, a thirty basis point decrease from the first quarter. Vacancies in the region have been decreasing since 2010. The resurgence of the auto industry has much to do with our improving economy and investors and entrepreneurs are now looking to Detroit as an attractive place to live and work.
Demand in the CBD pushes the vacancy rate down to 9%, one hundred ninety basis points lower than the overall market. The overall asking rate is $21.22 per square foot. Many of the buildings downtown are 100 percent occupied or nearly full. With increased demand, we will continue to see renovations of existing buildings and new construction in the urban core. Adient, the nation’s largest automotive seat supplier is moving into the 10-story, 164,000-square-foot Marquette Building at 243 W Congress Street. When all is said and done, the site is expected to cost $97.5 million which includes the price to purchase the 111-year-old historic building and approximately $50 million to renovate the building and parking structure. In New Center, the 634,000-square-foot Fisher building and the 290,000-squarefoot Albert Kahn building will undergo renovations reported to be in the $100 million range. In office construction; Bedrock Detroit has proposed a 600,000-square-foot office development just east of One Campus Martius and plans to redevelop the J.L. Hudson site on Woodward while Little Caesars Arena plans include office, retail, residential and more entertainment space.