A GREAT YEAR FOR METRO DETROIT’S OFFICE MARKET
Vacancies continued to tighten in Metro Detroit’s CBD and suburban office market; and other key performance indicators remained positive in 2018. The overall office vacancy rate decreased quarter over quarter in 2018, falling to 8.9% in the fourth quarter, compared to 9.7% in the fourth quarter of 2017. Overall rental rates climbed to $19.55 per square foot and year to date net absorption is 2,389,053 square feet. The positive energy and good vibes surrounding Metro Detroit is strong and the upward momentum continues to push optimism to new heights in our region.
The Detroit region has gained some new tenants and investment dollars continue to flow into the region. This quarter, Google opened their first Detroit office at The District Detroit, the new 30,000 SF headquarters is connected to Little Caesars Arena and will employ approximately 100 employees. In the CBD, plans progress for Chemical Bank’s proposed 250,000-square-foot office headquarters; recent plans revealed the budgeted cost for the 20-story tower is $127.6 million. Chemical Bank will move 500 employees to the new location over the next two years. Meanwhile, in Corktown, Ford began the first phase of the four-year endeavor to restore the former Michigan Central Station. Ford’s plans to spend $740 Million to develop 1.2 million-square-foot autonomous self-driving car division and a mobility and technology driven mixed-use campus. Dan Gilbert’s Bedrock LLC, has several major projects currently underway including the $95 million expansion of One Campus Martius building, which will add 310,000 square feet; the $313 million redevelopment of the Book Tower building on Washington Avenue into a mix of office, retail and residential uses; the $830 million Monroe Blocks project which broke ground this quarter and includes a 35-story office tower offering 847,000 square feet office space, 500 residential units, 117,000 square feet of retail and a variety of other uses; lastly, the development of the former JL Hudson’s site which will be the tallest building at 912 feet tall, in the heart of downtown, adding 1.4 million square feet of mixed office, residential, retail, hotel and exhibit space.