Guarded optimism. That’s what the researchers at Marcus & Millichap Real Estate Investment Services say is taking hold these days in Detroit’s retail market.
And that’s good news. Few cities have been hit as hard by the economic slump as has Detroit. And few sectors in this city have struggled as mightily as has retail.
According to Marcus & Millichap, though, the resurgent auto industry has provided a nice boost to Detroit’s retail sector.
Here are some positive numbers: In 2012, construction crews will deliver 400,000 square feet of new retail construction to the Detroit area. That will expand retail inventory by 0.2 percent. That’s a solid increase from the 263,000 square feet of retail space that came online in the Detroit area during the prior 12 months.
Marcus & Millichap predicts that vacancy rates will fall in the Detroit area during 2012, too. The company is predicting a fall of 40 basis points to 11.6 percent. Last year, this sector’s vacancy rate fell by just 10 basis points.
Finally, retail landlords received some good news, too. According to Marcus & Millichap’s research, asking rents in the Detroit-area retail sector should finshe at $16.50 a square foot in 2012, a jump of 0.3 percent from one year earlier. Effective rents are predicted to rise 0.4 percent to $14.43 a square foot. Again, that’s a nice change from 2011, when both asking and effective rents fell 0.1 percent.
