Overview of Select Industrial Real Estate Markets: Q3 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.
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
Summary as of Q3 2023
The Flint, Saginaw and Bay City region have seen a surge in activity, largely attributed to two significant leases of over 200,000 square feet in the Flint area to undisclosed tenants. Additionally, new properties have been introduced to the market, indicating a sustained resurgence despite the escalating costs associated with construction and capital.
The industrial real estate market in Detroit remains robust, boasting vacancy rates that hover near all-time lows, while witnessing a sharp decline in new construction. The pace of new builds has notably slowed due to the escalating costs of capital, labor, and materials. Nonetheless, sales and leasing activities have remained strong, propelling sale prices and lease rates upward. A noteworthy development includes the signing of a 112,000-square-foot lease in Howell by the holding company behind Brillo, Armaly Brands.
The industrial real estate market in Grand Rapids continues to exhibit strength, although there has been a slight uptick in vacancy rates. Despite this, the momentum in sales and leasing activities continues to escalate which has also driven up lease and sale prices. However, new construction has slowed, primarily due to the rising interest rates and construction expenses. Notably, the majority of the significant transactions in Grand Rapids have been orchestrated by warehousing and logistics companies, adding pressure on the area's diverse manufacturing base.
Source: Information was pulled from www.costar.com
About the Authors
Alex Tokarz is Assistant Vice President of Dominion Real Estate Advisors. He may be reached at 248-470-7957 or email@example.com.
Eric Banks is Group President of of Dominion Real Estate Advisors. He may be reached at 248-760-2525 or firstname.lastname@example.org.
Dominion Real Estate Advisors is an MMA Premium Associate Member and has been an MMA member company since March 2023. Visit online: dominionra.com.