{"id":1004295290,"date":"2019-02-05T09:12:47","date_gmt":"2019-02-05T17:12:47","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004295290"},"modified":"2022-03-04T02:20:19","modified_gmt":"2022-03-04T10:20:19","slug":"4-things-to-know-about-detroits-office-market","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/4-things-to-know-about-detroits-office-market\/","title":{"rendered":"Top 4 Things to Know About Detroit\u2019s Office Market"},"content":{"rendered":"
\"\"<\/a>

John Fricke, Executive Vice President, Colliers International (Image courtesy of Colliers International)<\/p><\/div>\n

Detroit\u2019s office market closed 2018 on a strong note, marking a peak for this stage of the city\u2019s revival. More than 3 million square feet of space changed hands in the metro\u2019s submarkets, according to Yardi Matrix data, pointing to a real investment buzz that was partly spurred by players in the auto industry. Last summer, Ford bought the abandoned Michigan Central Station and announced a three-phase, $740 million renovation plan, which started at the end of the year. Two months later, GM confirmed that it is bringing Cadillac closer to its Warren, Mich., technical center, a move that is expected to finalize this year.<\/p>\n

The cranes that have been rising against the skyline since Quicken Loans’ Dan Gilbert launched his plan to revitalize the city\u2019s downtown ten years ago, are here to stay. Several adaptive reuse projects involving iconic buildings such as Book Tower, the Sanders Building, the Grinnell Building and the Free Press Building are ongoing. Construction is also underway at the former Marquette Building across from Cobo Center, which is projected to bring more than 150,000 square feet of office space to Detroit\u2019s downtown.<\/p>\n

\"Rendering<\/a>

Rendering of Monroe Blocks (Image courtesy of Flaherty & Collins)<\/p><\/div>\n

But it\u2019s not only adaptive reuse projects that have been flourishing. New developments have also been launched. In December alone, developers announced two major projects in the city\u2019s downtown. Bedrock broke ground on an $820 million mixed-use project<\/a>\u2014Monroe Blocks\u2014expected to bring more than 800,000 square feet of office space to the downtown area as well as 480 residential units, 117,000 square feet of retail space and 1.5 acres of public open space. Around the same time, The City of Warren selected Flaherty & Collins as the developer for Warren Town Center, a $170 million mixed-use project<\/a> that is scheduled to break ground in 2019.<\/p>\n

An insider\u2019s view<\/h2>\n

While development activity is concentrated in the city\u2019s downtown area, where office demand is high, the suburbs are left with larger blocks of space to fill out, which can be problematic, according to John Fricke, executive vice president with Colliers International. Fricke shares his view of the Detroit office market in the four responses below, touching on challenges, top amenities, market performance and 2019 trends. <\/em><\/p>\n

What have been the main challenges that Detroit office investors had to overcome this year?<\/strong><\/p>\n

Fricke<\/strong>: Moderate office demand in the suburbs and rising tenant improvement costs. I would also add that demand for office space in the city of Detroit has been great for investors targeting urban submarkets but problematic for suburban office investors as a growing number of tenants migrate to the city and leave behind more suburban space.<\/p>\n

What has been on top of tenants’ preferences in terms of amenities and location in 2018?<\/strong><\/p>\n

Fricke<\/strong>: Technology infrastructure. In other words, the highest-speed internet possible and common areas providing free Wi-Fi. Secondarily, I would say security and the existence of food service and fitness facilities on site. For locations, Detroit was in very high demand as were other urban\/walkable districts like Birmingham and Royal Oak.<\/p>\n

On a scale from 1 to 10, what grade would you give the Detroit office market in 2018 and why?<\/strong><\/p>\n

Fricke<\/strong>: I\u2019d say a solid 7 or 8. There was almost 2 million feet of absorption and the overall vacancy level fell below 10 percent for the first time in over a decade due to about seven or eight years in a row of net positive absorption.<\/p>\n

What are the trends to watch in 2019?<\/strong><\/p>\n

Fricke<\/strong>: First of all, it\u2019s the level of continued migration to Detroit given rapidly rising rents and parking costs in the city. Then there\u2019s tenant improvement construction costs, which have reached the highest level, and the impact on tenants\u2019 willingness to relocate as well as on construction in general.<\/p>\n","protected":false},"excerpt":{"rendered":"

Colliers Executive Vice President John Fricke touches on the challenges, top amenities, market performance and 2019 trends in the Midwestern metro.\u00a0<\/p>\n","protected":false},"author":30,"featured_media":1004295413,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1495,21782,21783,13,21742,21747,21744],"tags":[40476,43412,32763,33350,33192],"class_list":["post-1004295290","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-detroit","category-development","category-investment","category-midwest","category-latest","category-office","category-people","tag-cpetalks","tag-bedrock-detroit","tag-colliers-international","tag-ford-motor-company","tag-general-motors"],"acf":[],"yoast_head":"\nTop 4 Things to Know About Detroit\u2019s 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\/4-things-to-know-about-detroits-office-market\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Top 4 Things to Know About Detroit\u2019s Office Market\" \/>\n<meta property=\"og:description\" content=\"Colliers Executive Vice President John Fricke touches on the challenges, top amenities, market performance and 2019 trends in the Midwestern metro.\u00a0\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/4-things-to-know-about-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=\"2019-02-05T17:12:47+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-03-04T10:20:19+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2019\/01\/Rendering-of-Monroe-Blocks.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"562\" \/>\n\t<meta property=\"og:image:height\" content=\"450\" \/>\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\/4-things-to-know-about-detroits-office-market\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/4-things-to-know-about-detroits-office-market\/\",\"name\":\"Top 4 Things to Know About Detroit\u2019s Office Market - 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