The coming months look like bright ones for the Detroit office market, as the sector closed 2018 on a strong note, according to the latest research from CBRE.
CBRE reported that the Detroit office marekt recorded 346,990 square feet of positive absorption in the fourth quarter of last year. Overall, the Detroit metropolitan area saw more than 1.3 million square feet of positive absorption last year, CBRE said.
This steady stream of absorption drove year-over-year vacancy rates down to 14.9 percent. Lease rates rose to $18.91 in the fourth quarter, up a bit over the area’s third-quarter numbers. On a year-over-year basis, though, the Detroit office sector saw lease rates fall $0.02 a square foot.
The suburbs were especially strong. CBRE reported that all of the office sector’s positive absorption in the fourth quarter took place here, with the suburban markets absorbing 350,183 square feet. The downtown market posted a negative absorption of 3,193 square feet. In some good news for the downtown market, though, office lease rates did rise in the fourth quarter when compared to the third, ending the year at $21.50 a square foot. That is $3.12 a square foot higher than the average suburban asking lease rate.
“Absorption across all classes was strong last year,” said Edward Wujek, senior vice president with CBRE, in a written statement. “There are several large transactions floating around the market right now. Given the current level of demand, we’re anticipating continued positive net absorption in the suburbs and in downtown this year.”
