The resurgence of Detroit’s office market continued in the second quarter of this year, with Newmark Knight Frank reporting that office vacancies in the market fell 30 basis points to 15 percent.
According to Newmark’s report, more than 216,000 square feet of office space was absorbed in the second quarter in the Detroit area. And in even better news? Newmark’s report says that demand for office space remains strong throughout much of the Detroit market, boding well for the future of this sector.
The report said that the office market was strong, too, in some of Detroit’s suburban markets, places like Southfield, Troy, Farmington Hills and Birmingham.
“The city of Detroit continues to see large gains in high-tech office users such as Microsoft, Waymo, LinkedIn and Google,” said Fred Liesveld, managing director of Newmark Knight Frank’s Detroit office. “Significant investments by the automotive industry into autonomous and smart vehicles should support additional growth of these tech companies in Detroit.”
The city of Detroit’s overall office vacancy rate fell 60 basis points to 12.5 percent during the second quarter, with just more than 85,000 square feet absorbed.
One of the more notable office deals in the market was Quicken Loans’ 41,000-square-foot lease that Molina Healthcare recently vacated when it consolidated its employees into its Troy location in late 2018.
In positive future news, Google plans to expand its presence in downtown Detroit. The company currently occupies 30,000 square feet on Henry Street adjacent to the Little Caesars Arena. Google plans to lease another floor in the building by 2020.
IBM also joins those companies moving into downtown from the suburbs or expanding in the downtown market. The company is moving from its 18000 West Nine Mile Road location in Southfield and taking 10,000 square feet in the Ally Detroit Center at 500 Woodward Ave. by the end of this year.
Other major companies who have recently expanded or moved to the CBD include Microsoft, LinkedIn, Universal McCann, WeWork and Waymo.
New construction is boosting the Detroit office market, too. Little Caesars has nearly completed construction of its $150 million, nine-story, 234,000-square-foot world headquarters at the corner of Woodward Avenue and Columbia Street. Chemical Bank is building a 20-story, 25,000-square-foot high-rise at Woodward Avenue and Elizabeth Street. And the law firm Warner, Norcross & Judd pre-leased 30,000 square feet at 2715 Woodward Ave. in The District Detroit.