The office vacancy rate in the metropolitan Detroit market continued to climb in the third quarter of this year, reaching 19.1%. As Newmark says in its latest research, the office market here remains stuck in contraction mode.
And with many companies still not certain how many of their employees will be back in the office on a full-time basis? This contraction mode might last for a while.
Newmark’s third-quarter Metro Detroit Office Market report highlighted the challenges that Detroit’s office market faces. But Detroit isn’t unusual: Cities across the country are still dealing with rising office vacancy rates as more employees continue to work from home. Companies don’t need quite as much office space when so much of their workforces aren’t commuting to their desks each day.
According to Newmark, just more than 526,000 square feet in net vacancies were added to the Detroit office market in the third quarter. Vacancies in this space have continued to trend upward since the third quarter of 2020.
Since that quarter in 2020, the office vacancy rate in the Detroit market has climbed 420 basis points and produced more than 2.7 million square feet in net vacancies, Newmark reported.
In little surprise, sublease activity remained high during the quarter. According to Newmark’s report, available sublease space rose by 460,000 square feet in the Detroit office market during the third quarter to just more than 1.8 million square feet. Before the pandemic, sublease levels stood at just 900,000 square feet in this market.
There is some good news, though. Newmark says that Detroit’s Central Business District remains a draw for companies. Huntington Bank and Majorel are the latest firms to take up a significant footprint in downtown Detroit.
