Ann Arbor, Michigan, ranked as the eighth fastest-growing tech submarket in the United States, according to the latest research from CBRE.
According to CBRE’s annual Tech-30 report, Ann Arbor saw overall office rent growth of 12.7 percent from the second quarter of 2017 through the second quarter of 2019. Ann Arbor also saw strong net absorption during this same period, bringing office vacancy to a low 3.6 percent.
CBRE reported that the Detroit market overall recorded 4.4 percent net absorption and office rent growth of 4.9 percent from the second quarter of 2017 through the second quarter of 2019. Office rents in the Detroit market average $19.44 a square foot, while that figure is a higher $26.84 in Ann Arbor.
CBRE’s Tech-30 report measures the impact of the tech industry on office rents in the 30 top technology markets in the United States.
“There has been a lot of activity in Ann Arbor, especially from tech firms that want to tap into the talent and synergies fostered by the University of Michigan’s eco-system,” said Andrew Baines, senior associate with CBRE in Detroit. “Between tech startups emerging in Ann Arbor and the auto industry continuously developing new technologies, with a particular focus on mobility, we will continue to see the growth of this sector in the Detroit area.”
The growth in office rents in the Tech-30 markets has been particularly strong during the last two years. CBRE reports that 10 markets have seen double-digit percentage growth in average rents during this period. Office rents increased in 28 of the Tech-30 markets since 2017
“The North American tech industry has diversified its economic base as it has grown, expanding its presence in many Tech-30 markets,” said Colin Yasukochi, executive director for research for CBRE’s Tech and Media Insights Center and co-author of the report. “Meanwhile, large tech companies have been an ongoing source of demand; The 10 most active tech companies leasing office space since 2013 account for 27 percent of overall tech-industry leasing.”