Grubb & Ellis has both good news and bad news when it comes to its analysis of Detroit’s industrial market: The market is still sufering from the tumolt of the Great Recession. But it appears, at least, that the market is now on a steady, if slow, recovery.
According to the Grubb & Ellis market report, 2011 ranks as a turnaround year for the metro Detroit industrial market, as the region continues to recover from the impact of the dramatic decline in the local automotive industry between 2008 and 2010.
As Grubb & Ellis reports, as this recovery occurs, the overall city industrial market should benefit. To support this argument, Grubb & Ellis points to the four consecutive quarters of positive net absorption totaling more than 4 million square feet that the Detroit market has seen.
The Detroit industrial market vacancy rate was 14.9 percent at the end of the third quarter, down 20 basis points from the previous quarter.
According to the report, the Macomb submarket had a healthy third quarter as its vacancy rate fell 70 basis points to 10.5 percent.
The region as a whole posted more than 839,000 square feet of positive net absorption in the quarter, bringing the year-to-date positive absorption total to about 3.5 million square feet.
General industrial properties accounted for the majority of the third quarter’s positive absorption, posting gains of nearly 628,000 square feet, while warehouse/distribution properties saw about 276,000 square feet absorbed. Incubator properties recorded more than 8,000 square feet of positive net absorption, while R&D/flex space was the only property type to witness negative net absorption of nearly 72,000 square feet.
The Macomb submarket led in positive net absorption, posting gains of nearly 500,000 square feet.