The Ann Arbor office market continues to tighten as tenants encounter limited availability and asking rents remain high. Downtown Class A asking rents saw an increase of 1.8 percent, while overall rates decreased by 1.6 percent since the first half of 2017.

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.
Fall 2017
Ann Arbor
Office Insight
The Ann Arbor office market continues to tighten as tenants encounter limited
availability and asking rents remain high. Downtown Class A asking rents saw
an increase of 1.8 percent, while overall rates decreased by 1.6 percent since
the first half of 2017. Total Ann Arbor vacancy fell by 3.4 percent. As the market
is getting tighter, numerous small leases have been executed; however, no
market-moving transactions have occurred thus far in 2017. Notable deals
downtown included FordLabs, a Ford Motor Company subsidiary, subleasing
space at McKinley Towne Center, Duo Security continuing their downtown
growth with a lease at the Allmendinger Building, and the University of
Michigan leasing space at 777 Eisenhower. Outside of Ann Arbor’s core,
Google completed the renovation of their 135,000-square-footClass A office,
while Toyota injected $28.0 million into their R&D facility along the US-23
corridor.
Class A speculative office developments have broken ground in both urban
and suburban markets. A mixed-use development broke ground on Main
Street with approximately 22,000 square feet of office space in addition to
retail space. In Pittsfield Township, 60,000 square feet of Class A building is
being developed by the Promanas Group near Briarwood Mall. Both projects
are expected to deliver in the spring of 2018.
Outlook
Ann Arbor office space will remain in high demand moving forward, given its
proximity to the university as well as the burgeoning tech scene. Rents should
continue to rise for the foreseeable future as the market continues to tighten.
Looking forward to 2018, downtown vacancy may rise with the addition of the
mixed-use office development. Ann Arbor currently has 82,000 square feet of
Class A speculative space under construction while more projects are
expected to break ground in the coming year.
Fundamentals Forecast
Under construction 82,000 s.f. ▲
Total vacancy 7.5% ▶
Average asking rent (gross) $24.30 p.s.f. ▲
Concessions Falling ▼
Ann Arbor office vacancy drops into single digits
13.1%
10.3%
12.6%
10.8%
7.5%
2013 2014 2015 2016 2017
Total vacancy
$10.00
$20.00
$30.00
2013 2014 2015 2016 2017
Average asking rents ($/s.f.) Class A
Class B
For more information, contact: Harrison West | harrison.west@am.jll.com
• DowntownAnn Arbor office vacancy dipped once again while asking
rates rose, indicating a landlord-friendly market
• Two significant projects are leading construction activity, both are
speculative and will introduce a total of 82,000 s.f. of Class A product
• Reduced leasing activity indicates a lack of quality available space,
which should turn around upon 2018’s deliveries
-200,000
0
200,000
2013 2014 2015 2016 YTD
2017
Supply and demand (s.f.) Net absorption
Deliveries
Robert Goldstein | robert.goldstein@am.jll.com

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.
Fall 2017
Ann Arbor
Office Statistics
For more information, contact: Harrison West | harrison.west@am.jll.com
Inventory
(s.f.)
Total
vacancy
(s.f.)
Total
vacancy
(%)
Average direct
asking rent
($ p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
Class A 674,496 21,126 3.1% $34.90 0 22,000
Class B 614,326 18,449 3.0% $26.48 0 0
Class C 173,150 0 0.0% NA 0 0
Downtown Ann Arbor 1,461,972 39,575 2.7% $30.98 0 22,000
Class A 2,594,363 276,393 10.7% $26.05 0 60,000
Class B 1,924,443 119,217 6.2% $23.54 0 0
Class C 912,637 84,820 9.3% $16.55 0 0
Suburban Ann Arbor 5,431,443 480,430 8.8% $23.75 0 60,000
Class A 3,268,859 297,519 9.1% $26.67 0 82,000
Class B 2,538,769 137,666 5.4% $23.94 0 0
Class C 1,085,787 84,820 7.8% $16.55 0 0
Ann Arbor Totals 6,893,415 520,005 7.5% $24.30 0 82,000
Robert Goldstein | robert.goldstein@am.jll.com