Over the past several years the industrial real estate market has undergone significant changes in the wake of the COVID-19 pandemic which has impacted e-commerce and supply chain logistics. Here is an overview and ongoing updates concerning select major industrial real estate markets in the state of Michigan that impact MMA members.

Summary as of Q2 2023

As the cost of leasing or buying industrial real estate continues to fluctuate, it can profoundly impact a manufacturers' decision-making processes in various ways. Facility costs for the average concern are usually second only to personnel and/or equipment where the operation is heavily asset based. Determining the optimal time to expand, relocate, sell and even make estate planning decisions can all be affected by the changing industrial real estate market.

Flint-Saginaw-Bay City:

The Flint, Saginaw, and Bay City region continues to see increased lease and sale activity. Notably, All PackagingSolutions signed a lease for 103,300 square-feet in Flint; and we saw a dip in the average sale price due mostly to a few outlying sales at less than $10.00 per-square-foot.

Detroit:

The industrial real estate market in Detroit has slowed slightly in Q4 but remains strong, while vacancy rates are still near all-time lows. The pace of new builds has notably slowed due to the escalating costs of capital and the cost of construction. Even in light of the slight dip in leasing transactions and average sale price, there was still positive net absorption.  One transaction of note was Robovent’s signing of a long-term lease of 90,000 square-feet in Chesterfield.

Grand Rapids:

The industrial real estate market in Grand Rapids had a hiccup, there was a steep drop off in the average sale price. With that being said the remaining market indicators are strong. We will need to wait and see if there is a correction in the average transaction price in Q1 of 2024. Of the notable transactions, one that stands out is Extruded Aluminum Corporation, who signed a 69,000 square-feet lease in Grand Rapids.

By offering our membership quarterly updates, we hope to educate and inform our Michigan manufacturers about their local real estate market and thereby assist them in improving their real estate decision-making processes.

Source: Information was pulled from www.costar.com. (NASDAQ: CSGP) CoStar Group, Inc. is a Washington, DC-based leading provider of information, analytics, and marketing services to the commercial property industry in the United States, Canada, the United Kingdom, France, Germany and Spain.

About the Authors

Dominion Real Estate Advisors is an MMA Premium Associate Member and has been an MMA member company since March 2023. Visit online: dominionra.com.