Positive absorption returned to the Detroit office market in the third quarter of 2024. And that’s undeniably good news for commercial real estate professionals working this market.
According to the latest research by CBRE, the downtown Detroit office market saw positive net absorption of 99,716 square feet in the third quarter.
The big deals that made this possible? Rocket Mortgage took 104,421 square feet of office space at 1 Campus Martius in downtown Detroit. And Dynatrace leased an additional 35,000 square feet in the same property.
In additional positive news, CBRE reported that the overall metropolitan Detroit market saw its asking lease rates increase by 59 cents a square foot in the third quarter. That boosted the average office leasing rate here to $20.20 a square foot.
CBRE reported that the suburban Detroit office market showed improvements in the third quarter, too, with nearly 10,000 square feet of positive absorption. That positive absorption comes after a second quarter in which the Detroit suburban office market saw 165,000 square feet of negative absorption.
Colliers, in its third-quarter office report, said that the overall office vacancy rate for the Detroit market decreased from 12.7% in the second quarter of 2024 to 12.3% in the third quarter.
Colliers also reported that the Detroit, Southfield and Troy submarkets saw the most leasing activity in the quarter, totaling 735,000 square feet of new leases.
This doesn’t mean that the Detroit office market doesn’t still face challenges. CBRE reported that the metropolitan Detroit office market still has more than 2 million square feet of sublease space available.
The Southfield market accounts for more than 765,000 square feet of this space. And the 26555 Northwestern building accounts for just 160,000 square feet of sublease space, the most of any one property in the market.
Office sales volume is down, too. Colliers reported that sales volume in the Detroit office market totaled $23.3 million in the third quarter. That brings the year-to-date office sales volume to $106.7 million.
