Renting commercial space in the West Michigan region is getting more costly, according to the latest numbers from Colliers West Michigan.
Colliers reports, in its second quarter market reports, that rental rates in West Michigan in the retail, office and industrial sectors remain at historic highs. But the reports also point to low inventory levels, levels that are slowing the commercial growth in this region of the country, which includes such Michigan cities as Grand Rapids, Holland and Kalamazoo.
“During our annual forecast event in January, we predicted a slow and steady year for 2016, and the second quarter has shown that trend continuing,” said Jeff Hainer, senior research analyst with Colliers. “Demand and rental rates are higher than ever, however options are slim. That’s causing people to take longer to make decisions, resulting in slower growth rates.”
Hainer said that he expects the high rents and slow growth to continue throughout 2016 and into 2017.
Colliers said that the west side of the West Michigan market remains the hottest when it comes to industrial deals and industrial rents as manufacturers expand production into areas such as Hudsonville, Jenison and Walker. Colliers said that the West Michigan office market remains strong, enjoying its 22nd consecutive quarter of occupancy growth.
The Knapp’s Crossing mixed-use project remains a hot spot for retailers, according to Colliers, with several national companies targeting this growing development.
But overall? The lack of inventory is making expansion difficult for many companies, Colliers reported.
“Many companies are as eager to expand as they’ve been in previous years, however, they are making due with their current situations while searching for the perfect opportunity,” said John Kuiper, president of Colliers West Michigan. “Looking ahead into 2017, we expect to see companies electing to buy or build if they need a brand-new space or are in need of specific amenities.”