Detroit’s industrial market is on the rise. Need proof? Check out Signature Associates’ first quarter industrial review. According to Signature’s numbers, the vacancy rate in the Detroit-area industrial market fell to 7.20 percent at the end of the first quarter.
That’s a drop of 1.22 percentage points compared to the first quarter of 2015.
Michigan’s falling unemployment rate is one reason for the strong industrial market. Signature Associates pointed out that the unemployment rate in Michigan dropped to 4.8 percent in the first quarter. That’s down significantly from the rate of 5.9 percent in the first quarter last year. It’s also the first time the unemployment rate has been under 5 percent in Michigan since 2001.
And the news gets better on the unemployment front. Signature Associates quoted University of Michigan economists who are predicting that the state’s unemployment rate should drop to 4.5 percent by the end of 2017 based on the number of new jobs they expect.
The Detroit area’s industrial market saw several large lease deals in the first quarter of the year. Technicolor Videocassette of Michigan leased 200,000 square feet at 2500 Enterprise Drive in Allen Park. In Brownstown Township, Amazon signed a lease for 157,724 square feet at 19991 Brownstown Business Center Drive. Guardian Industries Corp. leased 130,600 square feet at 17950 Dix-Toledo Road.
In Westland, Great Lakes Air Production leased 102,015 square feet of warehouse/distribution space at 1515-1625 Newburgh Road.
The biggest sales transaction of the quarter was the investment sale of the 530,544-square-foot manufacturing facility at 32500 Van Born Road in Wayne. That facility sold to Industrial Realty Group. In Allen Park, a 300,000-square-foot warehouse/distribution building sold to International Wholesale at 24200 W. Outer Drive. And in Farmington Hills, the three-building portfolio sale of the Discover Centre Buildings, totaling 165,016 square feet, sold as an investment to Century Companies.
Signature Associates is predicting even more growth in the industrial market in the near future. This optimism is based largely on the recent success of the nation’s big automakers, as the Detroit area still relies heavily on the auto industry for its fortunes.
According to Signature, the automotive industry sold 1.59 million vehicles in March, an increase of 3.2 percent from one year earlier. Ford Motor Company and Fiat Chrysler Automobiles had especially big months, seeing their sales increase by 8 percent in March. General Motors’ sales were up, too, but only by 0.9 percent.