Exceptional Year for Industrial
Metro Detroit’s industrial sector closed with an overall 3.0% vacancy rate in the fourth quarter, down 30 basis points since the third quarter 2017 and 80 basis points since the fourth quarter 2016. Net absorption was positive with 3,224,288 square feet absorbed in the fourth quarter. The industrial sector’s vacancy levels have been hovering in the 3% range since 2015.
Limited supply of quality industrial product has driven new construction to historically high levels. In 2017 the industrial sector delivered a whopping 3,646,357 square feet of completed new construction, an increase of 49% since the fourth quarter 2016 which delivered 1,874,939-square-feet. Our economic ties to the automotive industry aren’t the only driving forces contributing to the growth of our local economy. In the past few years our region has become an attractive place for e-commerce and tech companies to do business. In 2017, Amazon began construction on three facilities which will ultimately add nearly 3 million square feet of distribution space to our region by the end of 2018. Autonomous vehicle technology will also be a driver for increased leasing and investment activity in Southeastern Michigan. The American Center for Mobility (ACM) for testing autonomous vehicles broke ground on a 300+ acre site located at Willow Run Airport in Ypsilanti just outside of Ann Arbor. This development will be a major attraction for R&D for large tech companies from around the world.