Projects Underway in Downtown Detroit
The overall vacancy rate in the Metro Detroit office market decreased ever so slightly to 10.3%, a ten-basis point decrease from the second quarter. The vibrancy in the City of Detroit is undeniable and the demand is as strong as it’s ever been in recent times with much of the office inventory nearly 100 percent occupied, pushing the vacancy rate down to 7.9%, compared to 9% in the second quarter.
The overall asking rate is $22.67 per square foot. The demand for office space is only one of the components in the transformation of the City of Detroit. As people migrate to Detroit for work/live opportunities, the demand for residential and retail increases with recent figures speculating that 10,000 residential units are needed to meet demand, retail will follow. Millions of dollars are pouring into building and renovating the city in effort to meet the demand for modern, functional and urban space and attract more national tenants. As the “out with the old” motto goes, we expect the trend of mixed-use live/work space to continue as evident by highly anticipated Hudson Site in Downtown Detroit which unveiled design plans in August. The state-of-the-art $900-million, one-million square foot mixed- use development will break ground in December and is expected to finish in 2021. The building will feature an 800-foot tall residential tower with 330 units and will be the tallest structure in Michigan. The second structure will offer street level retail and 240,000 square feet of office space, a 1,500-seat theater, various outdoor gardens, and pedestrian space throughout. Coming soon is Bedrock’s Monroe Block development in downtown which plans for an office tower of 818,000 square feet, 480 multi-family units, 170,000 square feet of retail and 48,000 square feet of public space. Construction is expected to start early in 2018 and complete in 2022.