The Detroit-area retail market, despite the challenges faced by high interest rates and persistent inflation, remained stable in the third quarter of the year, with vacancy rates remaining low and rents holding steady.
That’s the takeaway from Colliers‘ third-quarter metropolitan Detroit retail report.
Colliers reported that the Detroit-area retail market’s vacancy rate ended the third quarter at 5.3%. That’s up, but only slightly, from a vacancy rate of 5.1% in the second quarter. The third quarter’s vacancy rate was up from the third quartere of 2022, too, when this rate also stood at 5.1%.
Despite the slight rise, though, Colliers reported that the overall retail vacancy rate in the Detroit market remains near an all-time low. Colliers said that the addition of 90,025 square feet of newly delivered retail supply played a role in the small increase in vacancy rates.
Other numbers weren’t quite as positive, though weren’t terrible, either. Colliers reported that a total of 465,312 square feet of retail space was returned to the market during the quarter, resulting in negative net absorption across the region.
Average asking lease rates for retail space throughout the Detroit region ended at $15.03 a square foot. That is up from $14.77 in the second quarter of the year but down from $15.71 the third quarter a year ago.
For all of 2023, leasing activity in the Detroit retail market had reached 3.3 million square feet by the end of the third quarter, Colliers said. In the third quarter, tenants took 890,445 square feet in 282 leases. The Macomb submarket experienced the most leasing activity with 51 leases executed totaling 121,273 square feet during the quarter.
Notable leases signed during the quarter include a 160,000-square-foot lease at Costco Business Center in Southfield, Michigan; 22,590 square feet leased at New Style Home & Furniture in Roseville, Michigan; and 14,820 square feet leased by Dollar Tree in West Bloomfield, Michigan.
