THE YEAR ENDS ON A STRONG NOTE FOR METRO DETROIT’S INDUSTRIAL MARKET
As 2018 ends, all signs point to another strong quarter for Metro Detroit’s industrial market with robust activity, spurred development, and all-time high occupancy and rental rates. The total vacancy rate in Metro Detroit is 3%; unchanged from the third quarter. Vacancy rates have been hovering in the 3% range for 10 consecutive quarters. Limited supply has pushed rents in our market to new highs, up 6% from this time last year. Rising construction costs have caused pain for developers but with a market as tight as we are experiencing in this cycle, new construction will be met with optimism and developers are taking note and speculative construction is likely to be absorbed quickly in our region. The industrial sector is especially strong due to healthy U.S. economy as well as high demand in the e-commerce and manufacturing sectors which is driving new activity in Metro Detroit and around the country. In the short term, the industrial sector is expected to remain strong, but there are headwinds to look for. Issues causing greatest concern are the availability of labor and increased tariffs due to trade policy reform.