Although the Detroit office market has slowed considerably over the last couple of years, the 3rd quarter of 2008 produced overall stabilized results. Net absorption totaled a positive 230,662 square feet at the end of the third quarter, up from a positive 74 square feet realized in the second quarter. Vacancy rates at 17.4% are slightly lower from the previous quarter. Currently, the average rental rate is $19.88.

The Michigan real estate market has suffered loses over the last couple of years due to high unemployment mainly pertaining to the loss of manufacturing positions. Unfortunately, it may be on a downward spiral for some time to come as the area feels the wrath of the credit crisis with financial lenders tightening up on financing. New construction and development have come to a halt, as well as interest by investors. It is uncertain as to when we will expect to see improvement in the state’s economy. The possibility of a merger occurring between GM and Chrsyler could further damage the local market. Medical office properties continue to see a higher demand as the healthcare industry announces numerous expansions (both on campus and off) bringing positive activity and much desired new job opportunities.

Contact Michelle McGuckin at 248.540.1000 for more information.

Detroit_Off_3Q08.pdf

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