Expect plenty of new commercial construction across the West Michigan region. There’s simply not enough retail, office or industrial space for demand in this rapidly growing slice of the state.
That’s the takeaway from the second quarter West Michigan market reports released earlier this month from Colliers International. According to the reports, companies are willing to pay higher rents for quality space.
And that is inspiring developers. Many are building new spaces in Grand Rapids and the rest of the region. Many owners are investing in renovations of existing space.
It all adds up to a busy commercial market in Grand Rapids and its surrounding communities.
Jason Webb, associate vice president at Colliers International|West Michigan, said that during the last two years West Michigan has faced low supply and a high demand for quality space. Building owners are now investing in their properties, renovating their spaces to attract high-quality clients, Webb said.
“Tenants across all markets are willing to pay higher prices for updated, well-located space with good curb appeal,” Webb said. “We expect to see more owners, especially those of older buildings, to begin renovations or offer investment allowances to secure new tenants.”
Colliers reported that retail was an especially busy sector for West Michigan during the second quarter. Retailers such as Freddy’s Frozen Custard & Steakburgers, Panda Express, Chipotle Mexican Grill and Planet Fitness all opened new locations in the West Michigan region.
The Knapp’s Crossing upscale retail development in Grand Rapids had a good second quarter, too. Colliers reported that Orangetheory Fitness opened in the development in July. Knapp’s Crossing will also soon welcome TJ Maxx, Woodhouse Day Spa, Clean Juice, Chow Hound and Neurocore later this year.
West Michigan’s industrial sector continues to thrive. Colliers said that the region saw record-setting industrial lease and sales rates. There were 18 industrial projects in development during the quarter, totaling nearly 2 million square feet.
“There is strong demand to buy industrial space over leasing it, which has created a competitive market for buyers,” said Steve Marcusse, senior vice president at Colliers International|West Michigan. “As soon as a quality space comes online, it is quickly purchased or leased.”
Most of the office leasing activity took place in the Southeast submarket of the Grand Rapids area. Keller Williams leased 15,000 square feet at 1555 Arboretum Drive SE. Accounting firm BDO USA leased 34,520 square feet at 5300 Patterson Ave. SE.