Positive quarterly absorption for the first time since early 2020. That’s the positive news in Detroit’s office market.
According to the most recent office report from JLL, the Detroit office market absorbed 316,155 square feet during the third quarter of this year. JLL said that the September completion of Huntington Tower in Detroit’s CBD spurred the first positive quarterly net absorption figure here since the start of the COVID-19 pandemic.
In more good news for the Detroit office sector, General Motors announced a return-to-office plan that will begin in early 2023. This is a pivot from the auto giant’s previous remote-heavy plan.
Comerica also made news in the third quarter, signing a 340,000-square-foot lease to occupy the former Mercedes Benz buildings. JLL also reported that in Novi, Michigan, Autosystems America has leased nearly 100,000 square feet at 39550 Orchard Hill Place.
In the CBD, Majorel leased two floors at 211 W. Fort St. where the European IT and customer-service company will have room for more than 500 employees when it takes occupancy in the coming months.
All this good news doesn’t mean that Detroit’s office market doesn’t still face challenges. Even with the third quarter’s positive figure, the Detroit office market has still suffered through 473,153 square feet of negative absorption through the first three quarters of the year, according to JLL.
And the overall vacancy rate for Detroit’s office market was still a high 18.6% as of the end of the third quarter.
JLL also predicts that office owners hoping to attract a steady stream of tenants will need to consider large-scale renovations or even a repurposing of older office buildings that lack the higher-end amenities that companies want.
