A bright outlook. That’s what Marcus & Millichap is predicting for Detroit’s retail sector in its second-quarter Detroit Retail Market Report.
Part of this optimism is based on the sector’s low vacancy rate. Marcus & Millichap reported that Detroit’s multi-tenant retail vacancy rate was just 3% as of the end of the second quarter, one of the lowest among major U.S. retail markets.
Marcus & Millichap predicts that the overall Detroit-area retail vacancy rate will fall to 5.5% this year. This vacancy rate is 70 basis points below Detroit’s prior 10-year average, according to Marcus & Millichap.
In good news for the owners of retail space, Marcus & Milichap predicts that the average asking rent for retail in the Detroit market will rise to $15 a square foot by the end of the year. Much of this gain will come from the northern Oakland County and western Wayne County submarkets.
In other interesting news, Marcus & Millichap reported that 343,000 square feet of new retail product was added to the Detroit market during the first quarter of 2024. That was the strongest three-month period for deliveries in five years.
This spurt of new construction meant that the overall Detroit-area retail inventory grew by 0.3% during the 12-month period ending in March.
The Southfield market accounted for nearly half of the new space delivered across the Detroit metro over the past four quarters, with more than 300,000 square feet completed.
