New reports show low office vacancy, billions invested in Downtown Detroit
We’ve seen more construction in the last few years in Detroit than we’ve seen here in decades. Much of that has been focused on the downtown core, although it’s slowly starting to move out into the neighborhoods. Two new reports highlight the growth over the past seven years and what we can expect in the future.
CBRE recently released their Downtown Detroit Development Report, which shows the development impact on office, retail, and residential markets. Their research shows a capital investment of $5.4 billion in development project from 2017-2020. Of these, we can see:
- 6,091 new apartment units
- 1,196 new hotel units
- 2.1 million square feet of new office space
In terms of apartments coming online, we’ll see hundreds of units soon open in 28 Grand and the Plaza; in the future, we can expect many around the District Detroit, the new Hudson’s site, and Third & Grand.
New hotels currently under construction include the Wurlitzer Building, or The Siren Hotel, slated to open later this year; plus the Shinola Hotel and the Element Hotel at the Metropolitan Building, both opening next year.
Many large downtown buildings are currently undergoing renovations for more office space, including the David Stott Building, the Detroit Free Press Building, and the Marquette Building, where Adient will move their headquarters.
More of the report can be downloaded here.
JLL’s Skyline Review shows that Detroit’s office vacancy in its taller buildings is currently 7.5 percent, well below the national average of 12.9 percent. As more businesses are moving downtown, the need for more office space rises. The report cites high-profile tenants like Microsoft moving into the current office space downtown, and more buildings rising in the next few years that will change the skyline itself. Dan Gilbert, who has said numerous times that more office space is needed, currently has plans for a new office tower on the Monroe Block downtown, the massive Hudson’s site project (slightly taller than the Ren Cen), and the possibility to build near the Riverfront.
“We’ve seen an important shift in demand for Skyline office buildings in Detroit,” said Harrison West, Research Analyst. “With multiple transformational projects in the pipeline, the future looks bright for the downtown Detroit office market and the Skyline could look much different five years down the road.”
Access to JLL’s research, which focuses on market insights for office supply and investment, can be found here through registration.