{"id":1004244650,"date":"2018-08-03T01:42:30","date_gmt":"2018-08-03T09:42:30","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004244650"},"modified":"2022-08-08T22:59:15","modified_gmt":"2022-08-09T06:59:15","slug":"a-closer-look-at-detroits-office-market","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/a-closer-look-at-detroits-office-market\/","title":{"rendered":"A Closer Look at Detroit’s Office Market"},"content":{"rendered":"
\"\"<\/a>

James Becker, principal & managing director, Avison Young<\/p><\/div>\n

Detroit has come a long way during the last few years. The metro is experiencing a renaissance, adding office-using jobs and modern downtown apartments in redeveloped historic buildings. Major projects such as the\u00a0$900 million Little Caesars Arena<\/a>, completed in September 2017, have sparked investor interest for further development in the area.<\/p>\n

Landmarks such as the former J.L. Hudson flagship department store, the former Detroit Police Department headquarters or the Michigan Central Station\u00a0are undergoing renovation work<\/a>, contributing to the city\u2019s growing status as an innovation hub.<\/p>\n

James Becker, principal & managing director with Avison Young\u2019s Michigan office, told Commercial Property Executive<\/em> that Detroit is in the midst of an \u201cinvestment buzz.\u201d Several regional employers are relocating to the city core to attract young professionals who are starting to see the benefits of staying in Motor City.<\/p>\n

What are the advantages of leasing office space in a market like Detroit right now?<\/strong><\/p>\n

Becker:<\/strong> From a national perspective, rent is still relatively low when compared to other major markets which have had an ongoing cycle of new development. Rents for existing Class A space in Detroit are just pushing to $30 gross. As new construction has been introduced, new space in Detroit like what has been completed in The District, surrounding Little Caesars Arena, has allowed the landlords to push rents through the $40.<\/p>\n

New construction proposed by Bedrock for delivery in 2022\u2014the Monroe Block project\u2014 is being quoted at $45 gross, which still puts it well below other major markets. From a local perspective, downtown offices are becoming an attraction tool<\/a> for a younger workforce that is finding reasons and employment opportunities to stay in Detroit, a market that historically exported its college graduates to other cities.<\/p>\n

Which are the metro\u2019s emerging office submarkets?<\/strong><\/p>\n

Becker:<\/strong> Corktown, Rivereast, New Center Downtown and Royal Oak as well as Birmingham are the suburban markets fueling new development.<\/p>\n

What should we expect from Detroit\u2019s suburban office market within the next quarters?\u00a0<\/strong><\/p>\n

Becker:<\/strong> Markets should be relatively stable with limited new development.<\/p>\n

When it comes to investment, which type of office assets do you predict will offer higher long-term yields\u2014urban or suburban?\u00a0<\/strong><\/p>\n

Becker:<\/strong> The investment buzz is definitely around the downtown market where rents have been rapidly rising for office space. Additional investor interest in downtown residential projects is also pushing values to record highs.<\/p>\n

\"\"<\/a><\/p>\n

What are your predictions regarding the metro\u2019s office rents going forward?<\/strong><\/p>\n

Becker:<\/strong> Suburban rents should be pretty stable for existing stock. There is still a lot of Class B product that will anchor rents in Troy and Southfield. Downtown rents will continue to inch up as new proposed construction raises the tide for existing stock of Class A and B space.<\/p>\n

What can you tell us about downtown redevelopments in the context of increased new office supply in Detroit?<\/strong><\/p>\n

Becker:<\/strong> Clearly, the corporate sponsorship by Ford is making a project of that magnitude work. Conversely, Adient, an automotive supplier, just scrapped their plan to move into a 150,000-square-foot building on Congress Street and Washington Boulevard\u2014the former Marquette Building\u2014after a couple of tough financial quarters and a leadership change. New leadership looked at the overall cost and pulled the plug on the project mid-renovation.<\/p>\n

The redevelopments for the most part are delivering loft-style office space geared for the younger tech workplace. New supply being proposed is more conventional Class A office space that will attract Fortune 1000 type companies willing to pay the required rent.<\/p>\n

How are tech companies influencing the city\u2019s office market?<\/strong><\/p>\n

Becker:<\/strong> Very positively, mostly from an employee attraction perspective, while at the same time fueling the already active retail and residential markets. LinkedIn just committed to 80,000 square feet in another (Dan) Gilbert redevelopment on Woodward Avenue, between Grand Circus Park and Campus Martius.<\/p>\n

Image courtesy of Avison Young<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

James Becker, principal & managing director with Avison Young, shares his insight on the trends shaping the city’s office market and what makes young professionals choose Motor City over coastal tech hubs. <\/p>\n","protected":false},"author":30,"featured_media":1004247224,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1495,21783,13,21742,21747,21744],"tags":[40476,33022,38516,33350,41312,47354],"class_list":["post-1004244650","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-detroit","category-investment","category-midwest","category-latest","category-office","category-people","tag-cpetalks","tag-avison-young","tag-bedrock-real-estate-services","tag-ford-motor-company","tag-james-becker","tag-little-caesars-arena"],"acf":[],"yoast_head":"\nA Closer Look at Detroit's Office Market - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/a-closer-look-at-detroits-office-market\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A Closer Look at Detroit's Office Market\" \/>\n<meta property=\"og:description\" content=\"James Becker, principal & managing director with Avison Young, shares his insight on the trends shaping the city's office market and what makes young professionals choose Motor City over coastal tech hubs.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/a-closer-look-at-detroits-office-market\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2018-08-03T09:42:30+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-08-09T06:59:15+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/08\/Interview-quote-CPE-James-Becker.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"827\" \/>\n\t<meta property=\"og:image:height\" content=\"221\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Roxana Baiceanu\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/a-closer-look-at-detroits-office-market\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/a-closer-look-at-detroits-office-market\/\",\"name\":\"A Closer Look at Detroit's Office Market - 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