Metro Detroit’s industrial absorption has driven down vacancy numbers and left the region with a lack of space for tenants to move into, especially in regards to Class A properties.

1. Quarterly absorption and vacancy
Source: JLL Research
Historical deliveries
Source: JLL Research
Average asking rents
Source: JLL Research
Market tightens up
Metro Detroit’s industrial absorption has driven down vacancy numbers and left
the region with a lack of space for tenants to move into, especially in regards to
Class A properties. With a total vacancy of 7.6 percent at the end of the third
quarter, supply is not meeting demand and users are running out of space. The
market has become extremely tight and due to these constraints, users have
been updating and occupying Class B and C product in order to fill their needs.
Auto supplier Gestamp recently purchased a 190,407-square-foot Class C
manufacturing facility in Chelsea for $4.0 million. Look for investment sales to
continue moving forward into 2017.
Construction boom
Due to the cost of refitting Class B and C space, build-to-suit projects are
becoming more common, such as the 300,000-square-foot FedEx distribution
center in Oak Park and the 150,000-square-foot Cosma Body Assembly in New
Hudson. Construction is rapidly increasing with 2.3 million square feet of
industrial space under construction and 678,143 square feet delivered year-to-
date. Speculative construction has come back into focus, with projects such as
the 575,000-square-foot Tri County Commerce Center in Hazel Park breaking
ground. Do not expect the construction to stop there, however, as a few large
scale projects are awaiting final approval and will soon break ground.
Driverless vehicles take the wheel
The health of OEM suppliers goes hand-in-hand with the auto industry. As
autonomous vehicle technology pushes to the forefront of the auto industry,
opportunity presents itself for suppliers to adapt and grow. Uber recently
announced the opening of a facility in Novi to develop its autonomous driving
fleet and collaborate with the automakers and suppliers in the region. Autoliv,
with co-headquarters in Stockholm and Auburn Hills, announced plans to partner
with Volvo to create autonomous driving software for Volvo vehicles. As this
segment of the auto industry expands, demand for manufacturing space will
grow, as well as warehouse and distribution space for third party logistics
companies who move their products.
Detroit industrial keeps humming along
Industrial Insight
Detroit | Q3 2016
©2016 Jones Lang LaSalle IP, Inc. All rights reserved.For more information, contact: Harrison West | harrison.west@am.jll.com
35,250,978
Total availability (s.f.)
6,465,613
YTD total net absorption (s.f.)
$4.64
Total average asking rent (p.s.f.)
2,315,191
Under construction
7.6%
Total availability
1.4%
Net absorption (as a % of stock)
5.8%
12-month rent growth
678,143
YTD construction completions (s.f.)
4.0%
6.0%
8.0%
10.0%
0.0
1.0
2.0
3.0
4.0
Q4 2015 Q1 2016 Q2 2016 Q3 2016
Absorption Vacancy
0
500,000
1,000,000
1,500,000
2,000,000
2012 2013 2014 2015 YTD 2016
Deliveries Projected year end
$3.50
$4.00
$4.50
$5.00
2013 2014 2015 Q3 2016
Warehouse & Distribution Manufacturing

2. Industrial Statistics
Detroit | Q3 2016
©2016 Jones Lang LaSalle IP, Inc. All rights reserved.For more information, contact: Harrison West | harrison.west@am.jll.com
Inventory
(s.f.)
YTD
total net
absorption
(s.f.)
YTD
total net
absorption
(% of stock)
Total
availability
(s.f.)
Total
availability
(%)
Average
total asking
rent
($ p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
Market Totals
Warehouse & Distribution 241,441,543 4,081,997 1.7% 22,378,014 9.3% $4.58 678,143 1,824,191
Manufacturing 221,322,803 2,383,616 1.1% 12,872,964 5.8% $4.73 0 491,000
Totals 462,764,346 6,465,613 1.4% 35,250,978 7.6% $4.64 678,143 2,315,191
Flex 50,116,969 873,142 -0.4% 6,519,361 13.0% $8.11 0 0
Airport / I-275 Corridor
Warehouse & Distribution 56,961,495 819,517 1.4% 4,726,952 8.3% $4.68 30,000 105,000
Manufacturing 39,232,931 488,563 1.2% 2,111,638 5.4% $4.19 0 0
Totals 96,194,426 1,308,080 1.4% 6,838,590 7.1% $4.53 30,000 105,000
Flex 7,055,861 62,289 0.9% 1,078,811 15.3% $8.04 0 0
City of Detroit
Warehouse & Distribution 38,796,716 320,529 0.8% 7,287,244 18.8% $2.58 300,000 254,000
Manufacturing 38,510,649 490,292 1.3% 4,090,549 10.6% $4.05 0 0
Totals 77,307,365 810,821 1.0% 11,377,793 14.7% $3.11 300,000 254,000
Flex 1,856,465 33,423 1.8% 364,000 19.6% $5.63 0 0
Downriver
Warehouse & Distribution 19,642,991 825,035 4.2% 1,769,484 9.0% $4.32 0 0
Manufacturing 23,099,089 426,111 1.8% 1,651,542 7.1% $4.02 0 0
Totals 42,742,080 1,251,146 2.9% 3,421,026 8.0% $4.18 0 0
Flex 5,198,251 443,354 8.5% 349,211 6.7% $7.42 0 0
I-96 Corridor
Warehouse & Distribution 27,035,199 436,334 1.6% 1,729,355 6.4% $6.31 144,286 300,586
Manufacturing 14,849,348 348,928 2.3% 917,292 6.2% $5.98 0 225,000
Totals 41,884,547 785,262 1.9% 2,646,647 6.3% $6.20 144,286 525,586
Flex 8,671,787 53,651 0.6% 1,160,137 13.4% $8.84 0 0
Macomb County
Warehouse & Distribution 40,627,620 1,120,645 2.8% 2,964,836 7.3% $4.41 72,407 289,605
Manufacturing 57,185,408 -171,270 -0.3% 1,852,677 3.2% $4.92 0 0
Totals 97,813,028 949,375 1.0% 4,817,513 4.9% $4.61 72,407 289,605
Flex 4,274,145 134,361 3.1% 394,435 9.2% $7.22 0 0
Monroe County
Warehouse & Distribution 5,150,465 330,024 6.4% 692,338 13.4% $3.15 0 0
Manufacturing 7,426,723 -95,635 -1.3% 189,720 2.6% $0.00 0 0
Totals 12,577,188 234,389 1.9% 882,058 7.0% $2.47 0 0
Flex 257,090 0 0.0% 0 0.0% $0.00 0 0
Northern I-75 Corridor
Warehouse & Distribution 43,113,945 120,927 0.3% 2,679,771 6.2% $5.29 77,050 875,000
Manufacturing 29,667,715 587,277 2.0% 1,709,375 5.8% $5.20 0 266,000
Totals 72,781,660 708,204 1.0% 4,389,146 6.0% $5.25 77,050 1,141,000
Flex 14,776,841 108,384 0.7% 2,679,249 18.1% $7.45 0 0
Washtenaw County
Warehouse & Distribution 10,087,166 -91,393 -0.9% 713,813 7.1% $6.61 54,400 0
Manufacturing 11,352,886 413,604 3.6% 245,917 2.2% $3.96 0 0
Totals 21,440,052 322,211 1.5% 959,730 4.5% $5.93 54,400 0
Flex 8,058,037 37,680 0.5% 534,798 6.6% $11.84 0 0