The industrial vacancy rate in the West Michigan region stood at an impressively low 2.5% as of the end of the second quarter, according to the latest research from NAI Wisinski of West Michigan.
That should be cause for celebration, right? Not necessarily. The West Michigan industrial market’s vacancy rate was an even lower 1.8% in the second quarter of 2023.
In its second quarter industrial report, NAI Wisinski writes that while a vacancy rate of 2.5% remains historically low, any increase in vacancy rates in this market need to be monitored. Even if that vacancy rate is still under 3%.
Another potential trouble spot? NAI Wisinski reported that some larger industrial spaces of 60,000 square feet to 180,000 square feet have hit the West Michigan market for sublease. Again, this is not an emergency. But NAI Wisinski brokers say that it is another possible market shift to watch.
What is fueling the overall strength of the West Michigan industrial market? In its report, NAI Wisinski points to the continued strength of e-commerce, distribution and logistics-related uses. Another bright spot? Reshoring and nearshoring.
NAI Wisinski reported that industrial sales activity has slowed in the West Michigan region, as it has across most of the country. You can blame higher interest rates on that. But while demand has reduced slightly, it is still higher than the supply of available indusrial space. That has kept industrial values strong in the region.
Construction costs are high, too, something that has helped slow the development of new speculative industrial facilities. As NAI Wisinski says, developers are building very few spec industrial properties in the West Michigan region today.
The West Michigan region saw some sizable industrial deals in the second quarter. NAI Wisinski pointed to a 110,200-square-foot industrial lease at 1120 36th St. in Wyoming, Michigan; a 116,480-square-foot sale at 6030 Clyde Park Ave. SW in Byron Center; and the sale of a 101,648-square-foot industrial property at 4949 Greenbrooke Drive SE in Grand Rapids.
And in good news for the West Michigan market, Gentex Corporation is advancing its plans for a Grand Rapids manufacturing plant and office space on a 6.4-acre site at 1639 Madison Ave. The facility will produce automotive mirror devices, employing more than 100 in production and technology jobs.
