1. 100 Grandville Ave SW Suite 100
Grand Rapids, MI 49503
616. 776. 0100 www.naiwwm.com
Wisinski of
West Michigan
Office • Industrial • Retail • Multi-Family
Office Market Report
West Michigan Q3 2015
*Also serving the Kalamazoo & Southwest
Michigan areas from our new Kalamazoo office*
2. Downtown growth is more
than meets the eye
One sign of growth in a downtown market is the number of cranes that are
visible in the skyline. If you have driven through downtown Grand Rapids
recently, you have probably noticed these signs of growth. But there are
more signs that point to growth in our market; such as positive net absorp-
tion, increased rental rates, and vacancy rates that are lower compared to
other Midwestern markets.
Another sign of growth is the redevelopment of existing properties. We
have seen many key downtown office properties change hands over the
past several years, and subsequently receive millions of dollars in invest-
ment for exterior and interior improvements. One recent example of this
in downtown Grand Rapids, on a smaller scale, is 25 Jefferson Place. The
building has great character and amazing views of downtown from the
penthouse unit. The owners were looking for a way to update the proper-
ty and make it more appealing to buyers or tenants. It was recommended
to the owner that they completely demo the penthouse unit and remodel
the lobby.
The demo to the top floor unit included tearing out the ceiling tiles to ex-
pose the 15’ ceilings, ripping out the drywall to the highlight the character
of the original bricks walls, and removing the carpet to expose the mod-
ern concrete floors. Not only did this help promote the beautiful views
of downtown, but it also allowed natural light to flow through the space.
The owner also remodeled the building’s lobby with new wood grain tile
flooring, fresh paint for the walls, LED lighting, and mural of the building
address on the lobby wall.
The owners spent approximately $50,000 for the improvements to the
building, and that investment was quickly recovered as the property was
sold just months later. This is a classic example of a property that pos-
sessed unique features that were simply hidden due to the age of the
property. By taking the time and investing a little capital, the building
was transformed into one where buyers can easily visualize their business.
Downtown growth isn’t just reserved for new office towers that add to the
skyline. More often, old buildings, such as 25 Jefferson Place, are being
redeveloped and repurposed to meet a growing need of downtown office
users and downtown residences.
* The information contained herein has been given to us by sources we deem reliable. We have
no reason to doubt its accuracy, however, we do not make any guarantees. All information
should be verified before relying thereon.
* Source: NAIWisinskiofWestMI, CoStar Property®
, U.S. Bureau of Labor Statistics
“A broker open
house was held
after construction
was complete,
brought in 2 great
offers within 2
weeks! The entire
building, along
with the 4 condo
units, was sold
in September
2015 to a local
developer who
plans to convert
the property to
residential.”
GRAND RAPIDS, MI
The Market
- Hillary Taatjas Woznick
Office Retail Advisor
3. Total Employment Growth
Highlight Total Number of Jobs Added per Year
Office Square Footage per Employee
By Industry- Based Upon All Tenants
Net absorption for the
overall Grand Rapids
office market was
positive 224,768
square feet in the
third quarter 2015
Vacancy rate went
from 9.6 in the
previous quarter to
10.4 this quarter
Recent Lease Transactions, July - September 2015
Address Size (SF) Tenant Lease Type
1591 Galbraith Ave. SE 27,600 First American Title Renewal
6290 Jupiter Ave. NE 4,201 GRP Engineering New
330 Ionia Ave. NW 67,309 General Services Administration Renewal
678 Front Ave., Suite 300 5,271 Varsity News Network New
401 Hall St. SW, Ste. 484 3,392 JR Schugel Logistics New
Recent Sales Transactions, July - September 2015
Address Size (SF) Final Sale Price Price PSF Sale Date
2311 E. Beltline Ave. SE 25,575 $1,950,000 $76.25 8/31/2015
3001 Orchard Vista Dr. SE 49,437 $2,725,000 $55.12 9/1/2015
2301 East Paris Ave. SE 13,125 $975,000 $74.29 8/5/2015
25 Jefferson Ave. SE 18,314 $600,000 $49.14 9/18/2015
4436 Broadmoor Ave. SE 12,768 $633,950 $49.65 8/21/2015
EconomicTrends
Rental rates
increased from
previous quarter
0 50 100 150 200 250 300 350 400
Law Firms
Agri-Mining/Utl
Retailers/Wholes
Services
Transportation
Communications
Business-Service
Engineers/Archit
Government
Accountants
Manufacturing
Finance/Insure
Medical
4.7
3.4
4.1
3.6
3.4
5.2
6.7
4.9
5.9
5.2
4.9
6.3
0.02 .0 4.06 .0 8.0
Newaygo Co.
Kent Co.
Ionia Co.
Barry Co.
Grand Rapids
area
United States
Aug-14 Aug-15
Source:U .S. BLS, Local Area Unemployment
12-month percent changes in Unemployment
4. West Michigan
Office Submarket Statistics
Methodology:The office market report includes office buildings within each of the
defined submarkets. Excluded are government buildings and institutional properties.
Office Space Statistical Changes Year-over-Year and Quarter-over-Quarter
CONSTRUCTION
CONSTRUCTION
ASKING RATES
ASKING RATES
VACANCY RATE
VACANCY RATE
NET ABSORPTION
NET ABSORPTION
2Q15 vs. 3Q15
3Q14 vs. 3Q15
Q3 Snapshot
Submarket Total RBA Total
Available SF
Vacancy
Rate
Total Average
Rate ($/SF/Yr)
Total Net
Absorption (SF)
Total Under
Construction SF
Downtown
Class A 1,366,022 87,184 6.3% $19.91 2,769 188,562
Class B C 7,914,748 621,317 7.8% $14.36 25,299 262,800
Total 9,280,770 708,501 7.6% $17.13 28,068 451,362
Northeast
Class A 294,197 15,943 5.4% $13.88 12,198 -
Class B C 3,109,499 215,275 6.9% $13.92 20,748 -
Total 3,403,696 231,218 6.7% $13.90 32,946 -
Northwest
Class B C 2,172,055 145,533 6.7% $10.90 43,759 -
Southeast
Class A 1,065,736 80,021 7.5% $19.49 - -
Class B C 9,763,085 1,094,254 11.2% $10.89 137,570 -
Total 10,828,821 1,174,275 10.8% $15.19 137,570 -
Southwest
Class B C 2,908,862 321,689 11.0% $10.92 -17,515 -
Overall Total 25,685,342 2,581,216 10.4% $13.60 224,768 902,724
5. Kent County Statistics
Total Market Report
C
-200,00 0
0
200,000
2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3
Absorp on Deliv ery
Total Net Absorp on Class A Total Net Absorp on Class BC RBA Delivered Class A RBA Delivered Class BC
0.00%
10.00%
20.00%
2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3
Vacancy Rate s
Vacancy Rates Class A Vacancy Rates Class BC
$1.00
$25.00
2013Q3 2013Q4 2014Q12 014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3
Total Rental Rates
Rental Rates Class A Rental Rates Class BC
0
200000
400000
2013Q32 013Q4 2014Q12 014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3
Absorption and Delivery
Vacancy Rate
Total Rental Rate
Under Construction
6. Methodology | Definitions | Submarket Map
SF/PSF
Square foot/per square foot, used as a unit of
measurement.
Under Construction
Buildings in a state of construction, up until they
receive their certificate of occupancy. In order for
CoStar to consider a building under construction,
the site must have a concrete foundation in place.
Deliveries
Buildings that have their certificate of occupancy
and are allowed to be moved into by the tenant/
purchaser.
Vacancy Rate
All physically unoccupied lease space, either
direct or sublease.
Absorption (Net)
The change in occupied space in a given
time period.
Available Square Footage
Net rentable area considered available for lease;
excludes sublease space.
Average Asking Rental Rate
Rental rate as quoted from each building’s
owner/management company. For office space,
a full service rate was requested; for retail, a
triple net rate requested; for industrial, a NN
basis.
Building Class
Class A Product is office space of steel and
concrete construction, built after 1980, quality
tenants, excellent amenities premium rates.
Class B product is office space built after 1980,
fair to good finishes wide range of tenants.
RBA
Rentable Building Area - Mainly used for office
and industrial.
NortheastNorthwest
SoutheastSouthwest
Downtown
7. In the spring of 2011, two successful and reputable companies, The Wisinski Group and NAI West Michigan
merged. The merger represents collaboration, rich traditions, innovative technologies, unique cultures and
diversity of skills and specialties which ultimately benefit our clients. We’re going back to our fundamentals,
strengthening our core and becoming stronger in the services we provide our clients. Our focus is simple,
building client relationships for life by offering market appropriate advice and then executing. Our success is
a direct result of its unwavering commitment to providing the best possible service to each and every client.
Our Brokers, with their 562 plus years of combined experience (20.1 years average), possess the knowledge
and expertise to manage the most complex transactions in industrial, office, retail, and Multi-Family specialities
throughout West Michigan.
Achieve More.
Doug Taatjes
CCIM, SIOR
616 292 1828
dougt@naiwwm.com
Marc Tourangeau
MBA
269 207 3072
marct@naiwwm.com
Jeremy Veenstra
616 242 1105
jeremyv@naiwwm.com
Kara Schroer
269 459 0435
karas@naiwwm.com
Mary Anne Wisinski-Rosely
CCIM, SIOR
616 575 7047
mawr@naiwwm.com
Stanley J. Wisinski, III
CCIM, SIOR
616 575 7015
sjw@naiwwm.com
Russ Bono
616 242 1115
russb@naiwwm.com
Dick Jasinski
616 575 7003
dickj@naiwwm.com
Meet Our Team
Office Specialists
Rod Alderink
616 242 1104
roda@naiwwm.com
Jason Makowski
616 575 7034
jasonm@naiwwm.com
Hillary Taatjes Woznick
616 242 1113
hillary@naiwwm.com
Local Knowledge. Global Reach.
Through our affiliation with NAI Global, we can also assist you with your commercial real estate needs
throughout the US globally right here from West Michigan.
Doug Taatjes
CCIM, SIOR
616 292 1828
dougt@naiwwm.com
Marc Tourangeau
MBA
269 207 3072
marct@naiwwm.com
Jeremy Veenstra
616 242 1105
jeremyv@naiwwm.com
Kara Schroer
269 459 0435
karas@naiwwm.com
Mary Anne Wisinski-Rosely
CCIM, SIOR
616 575 7047
mawr@naiwwm.com
Stanley J. Wisinski, III
CCIM, SIOR
616 575 7015
sjw@naiwwm.com
Russ Bono
616 242 1115
russb@naiwwm.com
Dick Jasinski
616 575 7003
dickj@naiwwm.com
Office Specialists
Rod Alderink
616 242 1104
roda@naiwwm.com
Jason Makowski
616 575 7034
jasonm@naiwwm.com
Hillary Taatjes Woznick
616 242 1113
hillary@naiwwm.com
8. 100 Grandville Ave SW Suite 100
Grand Rapids, MI 49503
616. 776. 0100 www.naiwwm.com
facebook.com/naiwwm
@naiwwm
nai-wisinski-of-west-michigan
Wisinski of
West Michigan
Office • Industrial • Retail • Multi-Family
