The document provides an overview of office market trends in Detroit for Q3 2017. Key points include: - Construction and development activity continued to increase, notably in downtown areas. Several new projects were announced or broke ground. - Leasing activity was dominated by smaller deals across urban and suburban markets. A few notable leases occurred in the Fisher Building. - Investment sales saw an uptick, with several high-profile office buildings changing hands at increasing prices. - Vacancy rates continued falling while asking rents rose, indicating an improving market. The outlook remains positive as conditions strengthen.

1. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemedreliable; however, no representation or warranty is made to the accuracy thereof.
Q3 2017
Detroit
Office Insight
The third quarter of 2017 saw a handful of smaller leases take place in both
urban and suburban submarkets. Multiple leases were executed in the Fisher
building, including the Children’s Hospital of Michigan and Yamasaki Inc.
LinkedIn announced plans to open a downtownDetroit office, as did
Berkshire Hathaway and the Ballmer Group, but none of these three have yet
to sign a lease. Construction and development activity keeps gaining
momentum. Masco opened their 91,220-square-footheadquarters in Livonia,
while Toyota announced plans to build a headquarters facility in Novi for their
truck division, Hino, and Tenneco announced plans for a $23.0 million
customer center in Northville. A 100,000-square-foot,$25.0 million
development in downtownRoyal Oak received site approval and Bedrock’s
Hudson’s site plan has grown in scale by an additional $125.0 million.
Investment sales activity continues to increase, as multiple high profile office
assets traded in the third quarter. Wilshere Plaza in Troy sold to a New York
buyer for $33.0 million, and the Ford Building downtownwas sold to a
Birmingham development group. The Bank of America building in Troy sold
for $74.0 million while United Shore Financial purchased a property in Pontiac
to relocate their headquarters from Troy.
Outlook
As conditions continue to improve in Detroit, we will see sustained rent
growth and dropping vacancies. Looking ahead - we can prepare to see
cranes amongst the downtownskyline, as Bedrock readies to break ground
on the Hudson’s development on Woodward in December. It will be
interesting to keep an eye on Mayor Duggan and Dan Gilbert’s pitch to
Amazon for their second North American headquarters. Will Detroit be seen as
a viable option?
Fundamentals Forecast
YTD net absorption 319,436 s.f. ▲
Under construction 688,957 s.f. ▲
Total vacancy 19.6% ▶
Average asking rent (gross) $19.00 p.s.f. ▲
Concessions Falling ▼
0
500,000
1,000,000
1,500,000
2013 2014 2015 2016 YTD
2017
Supply and demand (s.f.) Net absorption
Deliveries
Construction and investment activity picks up as
outlook improves upon metro Detroit
25.4% 25.1%
19.0% 20.2% 19.6%
2013 2014 2015 2016 2017
Total vacancy
$0.00
$15.00
$30.00
2013 2014 2015 2016 2017
Average asking rents ($/s.f.) Class A
Class B
For more information, contact: Harrison West | harrison.west@am.jll.com
• Smaller lease deals make up most of the third quarter activity as rent
growth and dropping vacancies have slowed
• Construction and development activity continues to ramp up, most
notably downtown
• Volume of property trades is up, driven by improving investor sentiment
and strong market conditions

2. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemedreliable; however, no representation or warranty is made to the accuracy thereof.
Q3 2017
Detroit
Office Statistics
For more information, contact: Harrison West | harrison.west@am.jll.com
Class Inventory (s.f.)
Total net
absorption
(s.f.)
YTD total net
absorption
(s.f.)
YTD total net
absorption
(% ofstock)
Direct
vacancy (%)
Total
vacancy (%)
Average
direct asking
rent ($ p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
CBD Totals 13,317,209 93,779 34,887 0.3% 12.7% 13.1% $21.12 0 227,430
New Center Totals 1,142,100 34,130 18,335 1.6% 22.3% 22.3% $18.84 0 0
Urban Totals 14,459,309 127,909 53,222 0.4% 13.5% 13.9% $20.82 0 227,430
Birmingham/Bloomfield Totals 3,979,668 -11,490 23,707 0.6% 11.2% 15.7% $25.27 0 0
Dearborn Totals 2,705,625 -4,218 186,324 6.9% 26.9% 27.1% $16.79 0 150,000
Downriver Totals 483,907 19,360 3,007 0.6% 40.1% 40.1% $14.70 0 0
Farmington/Farmington Hills Totals 4,658,516 -26,061 -8,402 -0.2% 17.4% 17.4% $18.76 0 30,000
Macomb Totals 1,286,875 -26,204 -30,242 -2.4% 21.5% 21.5% $17.23 0 0
Northern I-275 Corridor Totals 4,467,691 118,859 168,160 3.8% 9.4% 10.4% $18.64 180,000 152,527
North Oakland Totals 2,845,648 37,323 -171,056 -6.0% 20.8% 21.4% $19.37 0 0
Royal Oak/Southeast Oakland Totals 706,710 -38 -2,513 -0.4% 7.1% 7.1% $15.70 0 129,000
Southern I-275 Corridor Totals 1,077,525 4,600 4,600 0.4% 0.0% 0.0% NA 0 0
Southfield Totals 13,595,696 -50,516 -37,807 -0.3% 29.2% 30.9% $18.09 0 0
Troy Totals 11,003,062 -22,392 123,580 1.1% 22.8% 23.2% $18.25 0 0
Washtenaw Totals 6,613,772 -46,497 6,856 0.1% 10.6% 11.5% $22.36 0 0
Suburbs Totals 53,424,695 -7,274 266,214 0.5% 20.0% 21.1% $18.67 180,000 461,527
Detroit Totals 67,884,004 120,635 319,436 0.5% 18.6% 19.6% $19.00 180,000 688,957
CBD A 6,194,714 93,318 27,549 0.4% 8.2% 9.1% $22.70 0 227,430
Urban A 6,194,714 93,318 27,549 0.4% 8.2% 9.1% $22.70 0 227,430
Birmingham/Bloomfield A 1,569,497 6,417 21,798 1.4% 11.5% 22.4% $27.21 0 0
Dearborn A 446,890 0 1,619 0.4% 10.9% 10.9% $27.50 0 150,000
Farmington/Farmington Hills A 618,109 -14,109 -14,109 -2.3% 15.3% 15.3% $23.92 0 0
Macomb A 295,494 4,411 11,712 4.0% 1.6% 1.6% $19.32 0 0
Northern I-275 Corridor A 1,113,719 -635 -2,472 -0.2% 6.5% 7.6% $19.06 180,000 75,980
North Oakland A 488,665 17,142 -6,915 -1.4% 24.2% 24.2% $21.02 0 0
Southern I-275 Corridor A 832,753 0 0 0.0% 0.0% 0.0% NA 0 0
Southfield A 2,970,217 38,680 -19,313 -0.7% 25.1% 25.7% $23.24 0 0
Troy A 1,924,131 44,722 -21,724 -1.1% 18.0% 18.8% $24.96 0 0
Washtenaw A 3,218,983 -334 17,094 0.5% 11.3% 12.9% $23.78 0 0
Suburbs A 13,478,458 96,294 -12,310 -0.1% 14.7% 16.6% $23.84 180,000 225,980
Detroit A 19,673,172 189,612 15,239 0.1% 12.6% 14.3% $23.61 180,000 453,410
CBD B 7,122,495 461 7,338 0.1% 16.7% 16.7% $20.33 0 0
New Center B 1,142,100 34,130 18,335 1.6% 22.3% 22.3% $18.84 0 0
Urban B 8,264,595 34,591 25,673 0.3% 17.5% 17.5% $20.06 0 0
Birmingham/Bloomfield B 2,410,171 -17,907 1,909 0.1% 11.1% 11.3% $23.85 0 0
Dearborn B 2,258,735 -4,218 184,705 8.2% 30.0% 30.3% $16.04 0 0
Downriver B 483,907 19,360 3,007 0.6% 40.1% 40.1% $14.70 0 0
Farmington/Farmington Hills B 4,040,407 -11,952 5,707 0.1% 17.8% 17.8% $18.16 0 30,000
Macomb B 991,381 -30,615 -41,954 -4.2% 27.5% 27.5% $17.18 0 0
Northern I-275 Corridor B 3,353,972 119,494 170,632 5.1% 10.3% 11.3% $18.56 0 76,547
North Oakland B 2,356,983 20,181 -164,141 -7.0% 20.1% 20.8% $18.96 0 0
Royal Oak/Southeast Oakland B 706,710 -38 -2,513 -0.4% 7.1% 7.1% $15.70 0 129,000
Southern I-275 Corridor B 244,772 4,600 4,600 1.9% 0.0% 0.0% NA 0 0
Southfield B 10,625,479 -89,196 -18,494 -0.2% 30.3% 32.4% $16.92 0 0
Troy B 9,078,931 -67,114 145,304 1.6% 23.8% 24.1% $17.34 0 0
Washtenaw B 3,394,789 -46,163 -10,238 -0.3% 9.8% 10.2% $20.74 0 0
Suburbs B 39,946,237 -103,568 278,524 0.7% 21.8% 22.6% $17.55 0 235,547
Detroit B 48,210,832 -68,977 304,197 0.6% 21.1% 21.7% $17.90 0 235,547