In the latest edition of our monthly news brief, JLL’s regional team curates the top commercial real estate industry articles impacting Michigan markets to keep you in-the-know.
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High Construction Costs Limit Industrial Development in Grand Rapids
Industrial real estate demand continues to rise in Grand Rapids, presenting an optimal opportunity for new development. However, rising construction costs constrain development when there is no secured tenant. With fewer investments speculative space, vacancy rates have fallen as companies forego new developments and move into existing spaces.
Companies, such as Robert Grooters Development Co. (RGDC), are beginning to take risks to bring new developments to the area. RGDC hopes to introduce 1.1 million square feet of industrial space to the region by 2018.
Looking forward, the West Michigan industrial real estate market is expected to continue growing. High lease rates will eventually prompt speculative construction, allowing the market to expand with the rising demand.
Detroit’s Office Market is Booming with Delivery of the QLINE Streetcar
Detroit’s recently unveiled QLINE streetcar connects the city’s CBD to suburban neighborhoods, such as New Center and the North End. With scarce space in the urban core, developers focus on new construction along Woodward Avenue.
Just outside of the CBD, construction has started on the largest renovation project in the U.S. Tenants are eager to move into the Packard Plant, which will be converted to mixed-use space by the end of 2018. Additionally, Etkin LLC recently broke ground on a 74,000-square-foot office development project in the suburban market. The project will cost approximately $20 million and is expected to open by the spring of 2018.
With a slew of mixed-use projects in the works, Detroit’s office market is expected to flourish. Improving market conditions will spark economic activity and development in both the urban core and the suburbs, advancing the overall health of the Detroit market.
Downtown Ann Arbor Serves as a Hub for Driverless-Car Innovation
With a long history of automotive research and innovation, Ann Arbor serves as a hub for autonomous vehicle manufacturers. In addition, Michigan’s regulations encourage self-driving vehicle companies to conduct testing on public roads.
With strong support from the University of Michigan, companies, such as Toyota, Honda, General Motors, BMW and Intel, are working with the school to manufacture and test fully autonomous vehicles. Testing takes place at MCity, which is a 32-acre test track that draws carmakers to the city.
Forward-thinking automakers are gravitating toward Ann Arbor to collaborate, share knowledge and build safer, more sustainable vehicles.