With regular news that companies like LinkedIn are opening up offices in Detroit, it’s no surprise that the office market here is strong. New research from Newmark Knight Frank only confirms our suspicions.
The real estate advisory firm released its first quarter 2019 office trends report showing that Detroit’s market vacancy rate fell to 13.1 percent, a drop of 0.8 percent. 101,000 square feet of office space got leased in New Center and 123,000 square feet in the central business district, as companies like United Way for Southeastern Michigan relocated here.
Meanwhile, more is being built. Bedrock alone will add 563,000 square feet of office space between the new Hudson’s and the expansion of the One Campus Martius building.
“The level of new construction activity in Detroit is testament to the confidence in the downtown market,” said Fred Liesveld, managing director of NKF’s Detroit office, in the press release.
But, should demand grow even more, rising construction costs might make it difficult to build out the necessary supply.
Overall, there is a lack of Class A office space in Detroit, which is defined by the Building Owners and Managers Association as “high quality standard finishes, state of the art systems, exceptional accessibility, and a definite market presence.”
While there are plenty of historic skyscrapers downtown, few have gotten modern upgrades, and companies like Google are scooping up some of the most desired spaces.