Most of the key numbers ticked down slightly for the industrial market in the Detroit area. But the future still looks bright for this sector, according to the latest research from Colliers International.
That’s because even though vacancy rates in this sector rose during the second quarter of the year and the average rental rates fell, these numbers remain strong historically.
Colliers reported that the vacancy rate for industrial space in the metropolitan Detroit area hit 3.2 percent in the second quarter. That’s a low number, but it is up slightly from the first quarter of the year, when this rate stood at an even lower 3 percent.
And rental rates in the industrial sector? The average hit $6.39 a square foot in the second quarter. That’s down slightly from $6.41 a square foot in the first quarter.
Not all numbers are down, though. Colliers reported that the amount of industrial space under construction in the second quarter rose to more than 4.15 million square feet. That’s up from more than 3.7 million square feet in the first quarter.
The future looks especially bright for this sector. Colliers pointed to the announcement by Fiat Chrysler Automobile that it will build a Jeep assembly plant near Mack Avenue and St. Jean. Construction on this major project should begin this year and wrap in late 2020. Fiat Chrysler will also expand its nearby Jefferson North Plant on Detroit’s east side. This investment will bring 4,950 jobs and $2.5 billion in new investment to Detroit, Colliers said.
Waymo, a sister company to Google, will repurpose the American Axle factory. Here, it will retrofit vehicles with autonomous-car technology. What’s interesting about this is that Waymo chose Detroit over Silicon Valley and will invest $13.6 million to convert the existing plant at Holbrook Avenue.
Then there’s Tiberino Group, an Italian automotive supplier, which purchased 10 acres at the former American Axle manufacturing site and plans to build a new manufacturing facility. Details of this project have not yet been disclosed.
