The document discusses recent trends in the industrial real estate and employment markets in Detroit. It states that absorption has been positive for the past two years, pulling vacancies down and allowing the recovery to play out as auto industry production increases. Demand growth favors large, modern facilities, and fewer move-outs will lead to continued tightening of vacancies. Industrial employment in Detroit increased by 31,400 jobs over the past year, led by gains in manufacturing. Several companies in the Detroit area are expanding their industrial facilities and operations due to growing demand.

1. Industrial real estate implications
Job growth/loss by sector (12-month change)
Detroit
Absorption has been positive for the past two years, pulling vacancies down to
within 2008 levels. The market has also been seeing fewer large move-outs
lately, allowing the recovery to play out as the auto industry ramps up
production and drives growth in the local economy. Major tenants continue to
make leasing decisions in the 100,000- to 250,000-square-foot range and the
prospects for net absorption, at least in the next couple of quarters, remain
solid.
Demand growth will continue to favor large, modern product, and when met
with fewer move-outs, the result will be a continued firming of market
fundamentals. With a minimal supply pipeline, marginal improvements in
demand will result in a tightening of vacancies. Much of the metro’s supply has
fallen into obsolescence, making demolitions seem like a good option for
improving fundamentals.
Total jobs vs. unemployment rate
Detroit
Industrial employment trends (12-month change)
Detroit
Industrial employment update
Metro Detroit . June 2015
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2000 2002 2004 2006 2008 2010 2012 2014
Peak: 2,217,186 jobs
unemployment rate
total jobs
3.0%
• According to the most recent estimates from the BLS, total non-farm
employment in Detroit stood at ~1.9 million payrolls, representing an
annualized increase of 52,400 jobs or 2.8 percent. Meanwhile,
unemployment decreased 2.7 percentage points year-over-year to 5.1
percent.
• Industrial employment sectors have experienced substantial employment
expansion over the last year, recording an annualized net gain of 31,400
jobs across the metro. Employment gains were led by the manufacturing
sector, which added 14,700 jobs year-over-year.
• Total U.S. nonfarm employment increased by 280,000 jobs in May and
upward revisions were made to previous months totaling 32,000 jobs.
May's jobs report is welcome news and signals that growth is back on
track after a slow start to the year.
• U.S. unemployment increased 10 basis points to 5.5 percent as the labor
force participation rate ticked higher. Wages also showed growth,
recording an annualized increase of 2.3 percent, the highest level in
nearly two years. (10.0)
0.0
10.0
20.0
30.0
40.0
2011
2012
2013
2014
2015
Trade,Transportation & Utilities Manufacturing Other Services Mining, Logging & Construction
5.5%U.S. unemployment
2.2%U.S. 12-month job growth
5.1%Detroit unemployment
2.8%Detroit 12-month job growth
5.4%Michigan unemployment
2.4%Michigan 12-month job growth
-1,900
-100
200
2,700
3,000
3,800
6,200
10,300
13,500
14,700
-3,500 1,500 6,500 11,500 16,500
Government
Other Services
Information
Leisure & Hospitality
Financial Activities
Educational & Health Services
Trade, Transportation & Utilities
Mining, Logging & Construction
Professional & Business Services
Manufacturing
Number of Jobs

2. April 2013 April 2014 April 2015
Total Non-farm
Employment
1,851,000
1.9%
1,873,900
1.2%
1,926,300
2.8%
Unemployment Rate 8.7% 7.8% 5.1%
Detroit Supersectors April 2013 April 2014 April 2015
Mining, Logging and Construction 53,300 0.8% 55,000 3.2% 65,300 18.7%
Manufacturing 226,600 5.6% 230,600 1.8% 245,300 6.4%
Trade, Transportation, & Utilities 339,500 1.3% 349,100 2.8% 355,300 1.8%
Information 27,400 4.2% 27,600 0.7% 27,500 -0.4%
Financial Activities 102,700 4.7% 103,700 1.0% 106,700 2.9%
Professional & Business Services 357,500 3.3% 361,500 1.1% 375,000 3.7%
Educational & Health Services 298,300 1.0% 299,500 0.4% 302,200 0.9%
Leisure & Hospitality 177,800 1.4% 181,500 2.1% 185,300 2.1%
Other Services 76,800 1.3% 76,600 -0.3% 76,800 0.3%
Government 191,500 -3.3% 188,800 -1.4% 186,900 -1.0%
JLL Americas Research • Detroit Industrial Employment Update 2
Industry employment stratification
Detroit
© 2015 Jones Lang LaSalle IP, Inc. All rights reserved.
All information contained herein is from sources deemed
reliable; however, no representation or warranty is made
to the accuracy thereof.
Employment statistics
Detroit
Professional &
Business Services,
375000, 19%
Trade, Transportation
&Utilities,
355,300, 18%
Educational &
Health Services,
302,200, 16%
Manufacturing,
245,300, 13%
Government,
186,900, 10%
Leisure & Hospitality,
185,3000, 9%
Financial Activities,
106,700, 6%
Other Services,
76,800, 4%
Mining, Logging
& Construction,
65,300, 3%
Information,
27,500, 1%
Aaron Moore
Research Analyst Intern
Great Lakes Region
tel +1 248 581 3308
Aaron.Moore@am.jll.com
226 East Hudson Avenue
Suite 200
Royal Oak, MI 48067
www.jll.com/detroit
Andrew Batson
Senior Research Analyst
Great Lakes Region
tel +1 248 581 3300
Andrew.Batson@am.jll.com
226 East Hudson Avenue
Suite 200
Royal Oak, MI 48067
www.jll.com/detroit
News on the street
Detroit businesses expanding, contracting, etc.
All in One Medical Ι Medical Supplies Manufacturing: Expanding
Backed by $4.5 million in funding by Farmington Hills-based Beringea LLC, All In One Medical, which is based in Wolverhampton, England, has been scouting
locations in Southeastern Michigan for a manufacturing facility it wants to have running within a year. The plant will employ 35-40 people to make its patented
disposable antimicrobial curtains, room dividers and window blinds for hospitals and medical clinics
ATW Automation Ι Industrial Machinery: Expanding
ATW Automation has just relocated its Michigan manufacturing operations from an 85,000 square-foot facility in suburban Livonia to a significantly larger facility in
Wixom, one of many industrial operations in the metro area to expand recently as the local economy ramps up. Industrial users in Detroit absorbed a total of 5.2
million square feet of space in 2014. The general feeling around town is that 2015 will be the year more build-to-suits come to market.
FedEX Ι Logistics: Expanding
A new 300,000-square-foot FedEx facility is planned for the former Detroit Artillery Armory site in Oak Park. Total investment in the project is expected to be around
$35 million and construction is expected to take about a year to complete. Work is expected to begin this summer. About 250 jobs are initially expected to be created
and about 400 expected over several years.
Prism Plastics Ι Plastic Molder: Expanding
The auto supplier is adding 10,000 square feet of space to its 26,000-square-foot Chesterfield Township plant and headquarters in addition to the four new Toshiba
Electric molding presses that will be in place by July. Of the total project investment, $2.5 million will be spent in Michigan. Prism, which currently employs 74, will be
adding an additional eight employees by the end of 2015 to accommodate the expansion.
Schostak Brothers & Company Ι Real Estate: Expanding
Livonia-based Schostak Brothers & Company has begun a $2 million project to redevelop a former Home Depot in Redford Township for light industrial use.
Work on the 145,728-square-foot store, on Inkster Road between Plymouth Road and I-96, is scheduled to be complete by July. The industrial space vacancy rate
in western Wayne County is currently 7.5 percent, compared with 17.2 percent in 2010, Schostak Bros. said.
Simply Self Storage Ι Self Storage Services: Acquisitions
Pogoda Companies has just sold a 749,436 square-foot portfolio of 12 self-storage facilities located throughout the state of Michigan to one of the industry’s big
players for $61.3 million. Sales of this kind have become quite common for self-storage companies. Soaring revenue growth, rising occupancy and limited new
construction has perked up investor interest, pushing down cap rates to historic lows and encouraging consolidation.