- Vacancy in Detroit's office market increased slightly in the past two quarters but conditions remain stable, with current vacancy rates of 15.7% in urban areas and 22.3% in suburbs. - Automakers made headlines again in Q3 as Cadillac announced moving back to Detroit after four years in New York, while multiple office buildings hit the market for sale downtown. - Rent growth continued across the metro area despite a bump in vacancy, as large available spaces in the suburbs may be backfilled by year's end.

1. © 2018 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.
Q3 2018
Detroit
Office Insight
Conditions in Detroit’s office market remain stable, even amidst a slight uptick
in vacancy the past two quarters. Current total vacancy in the urban and
suburban submarkets are 15.7 percent and 22.3 percent, respectively. Asking
rents market-wide have increased 1.0 percent in the past three months,
currently at $19.65 per-square-foot. Detroit’s office market saw more positive
headlines in the third quarter on the heels of Ford’s Michigan Central Station
announcement. Cadillac made public their intention to move back to the
Detroit area after almost four years in Manhattan and Chemical Bank
announced plans to construct a 250,000-square-foot headquarters in
downtown Detroit where they will relocate 500-plus employees from their
current Midland location once the building delivers.
Downtown, Tata Technologies signed a 21,745 lease at the Cass Cadillac
building, while United Way of Michigan will be moving from the First National
Building to New Center. Due to increasing rents downtown, United Way
signed a 36,500-square-foot lease at the Fisher Building and are set to move in
February. In the suburbs, Hospice of Michigan inked a 21,157-square-foot
lease at 400 Galleria in Southfield, and Spotify set up a regional sales office in
Birmingham at 132 N Old Woodward with plans to expand in the market.
Outlook
Looking ahead toward the end of the year, keep an eye on some of the newer
availabilities, as it will be interesting to see how fast these spaces are
backfilled. Large blocks are available in both the Troy and the I-275 corridor
submarkets. We expect vacancies to correct a bit toward the end of the year
and continue the broader trend of compressing vacancies seen the past five
years. With 211 West Fort and the Marquette Building on the market for sale
downtown, it will be intriguing to see what they trade for, as sale prices per-
square-foot in the CBD have dramatically increased in recent years.
Fundamentals Forecast
YTD net absorption -326,362 s.f. ▲
Under construction 601,000 s.f. ▲
Total vacancy 20.8 % ▼
Average asking rent (gross) $19.65 p.s.f. ▲
Concessions Falling ▼
-500,000
0
500,000
1,000,000
2015 2016 2017 YTD 2018
Supply and demand (s.f.) Net absorption
Deliveries
Steady rent growth continues amidst bump in vacancy
21.7%
21.0%
19.8%
20.8%
2015 2016 2017 YTD 2018
Total vacancy
$0.00
$10.00
$20.00
$30.00
2015 2016 2017 YTD 2018
Average asking rents ($/s.f.) Class A
Class B
For more information, contact: Harrison West | harrison.west@am.jll.com
• Automakers make big headlines again in the third quarter as Cadillac
announces their move back to the Detroit area after almost four years in
New York .
• Multiple office buildings hit the market for sale in the CBD.
• Vacancy creeps upward as large spaces become available, while rent
growth continues across the metro Detroit region.

2. © 2018 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.
Q3 2018
Office Statistics
Detroit
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 (%
of stock)
Direct
vacancy (%)
Total
vacancy (%)
Average
direct asking
rent ($ p.s.f.)
YTD
Completions
(s.f.)
Under
Development
(s.f.)
Birmingham/Bloomfield Totals 3,979,668 6,461 -47,608 -1.2% 18.9% 19.2% $27.84 0 0
Dearborn Totals 2,705,625 13,450 86,427 3.2% 24.2% 24.4% $16.93 0 150,000
Downriver Totals 483,907 -1,264 11,451 2.4% 38.2% 38.8% $14.84 0 0
Farmington/Farmington Hills Totals 4,658,516 46,761 -43,793 -0.9% 15.8% 17.0% $18.81 0 0
Macomb Totals 1,286,875 37,920 38,277 3.0% 16.8% 16.8% $16.62 0 0
North Oakland Totals 2,260,888 5,116 67,510 3.0% 20.1% 20.2% $18.80 53,240 0
Northern I-275 Corridor Totals 4,467,691 -65,580 -63,922 -1.4% 11.6% 13.9% $20.11 0 0
Royal Oak / SE Oakland Totals 782,998 73,742 65,506 8.4% 6.6% 7.1% $17.08 76,288 55,000
Southern I-275 Corridor Totals 1,077,525 0 -110,080 -10.2% 0.2% 23.5% N/A 0 0
Southfield Totals 13,235,696 -13,611 -130,166 -1.0% 28.2% 30.2% $18.24 0 0
Troy Totals 11,003,062 -211,532 -201,475 -1.8% 24.1% 26.5% $18.66 0 0
Washtenaw Totals 6,673,772 -10,352 -61,463 -0.9% 10.2% 11.8% $23.01 60,000 30,000
Suburbs Totals 52,616,223 -118,889 -389,336 -0.7% 20.2% 22.3% $19.24 136,288 235,000
CBD Totals 13,477,209 7,873 75,488 0.6% 13.7% 14.8% $22.05 160,000 366,000
New Center Totals 1,776,919 -19,334 -12,514 -0.7% 22.7% 22.8% $19.38 0 0
Urban Totals 15,254,128 -11,461 62,974 0.4% 14.8% 15.7% $21.66 160,000 366,000
Detroit Totals 67,870,351 -130,350 -326,362 -0.5% 19.0% 20.8% $19.65 349,528 601,000
Birmingham/Bloomfield A 1,569,497 4,352 -24,975 -1.6% 27.8% 28.2% $29.18 0 0
Dearborn A 446,890 0 -1,150 -0.3% 1.0% 1.0% N/A 0 150,000
Farmington/Farmington Hills A 618,109 40,263 35,432 5.7% 8.3% 8.3% $23.38 0 0
Macomb A 295,494 1,149 -452 -0.2% 3.0% 3.0% N/A 0 0
North Oakland A 541,905 1,852 53,771 9.9% 20.0% 20.0% $20.86 53,240 0
Northern I-275 Corridor A 1,113,719 0 -9,170 -0.8% 6.8% 7.7% $18.47 0 0
Royal Oak / SE Oakland A 76,288 76,288 76,288 100.0% 0.0% 0.0% N/A 76,288 55,000
Southern I-275 Corridor A 832,753 0 -109,432 -13.1% 0.0% 30.1% N/A 0 0
Southfield A 2,970,217 -37,019 -27,061 -0.9% 23.9% 26.7% $22.41 0 0
Troy A 1,924,131 -904 19,588 1.0% 16.0% 19.8% $25.50 0 0
Washtenaw A 3,278,983 87,604 109,487 3.3% 9.0% 9.9% $25.29 60,000 30,000
Suburbs A 13,667,986 173,585 122,326 0.9% 14.6% 17.9% $24.69 189,528 235,000
CBD A 6,354,714 0 61,321 1.0% 9.3% 11.4% $23.07 160,000 366,000
Urban A 6,354,714 0 61,321 1.0% 9.3% 11.4% $23.07 160,000 366,000
Detroit A 20,022,700 173,585 183,647 0.9% 12.9% 15.8% $24.31 349,528 601,000
Birmingham/Bloomfield B 2,410,171 2,109 -22,633 -0.9% 13.2% 13.4% $25.24 0 0
Dearborn B 2,258,735 13,450 87,577 3.9% 28.8% 29.0% $16.93 0 0
Downriver B 483,907 -1,264 11,451 2.4% 38.2% 38.8% $14.84 0 0
Farmington/Farmington Hills B 4,040,407 6,498 -79,225 -2.0% 17.0% 18.3% $18.45 0 0
Macomb B 991,381 36,771 38,729 3.9% 20.9% 20.9% $16.62 0 0
North Oakland B 1,718,983 3,264 13,739 0.8% 20.2% 20.2% $18.22 0 0
Northern I-275 Corridor B 3,353,972 -65,580 -54,752 -1.6% 13.2% 16.0% $20.43 0 0
Royal Oak / SE Oakland B 706,710 -2,546 -10,782 -1.5% 7.3% 7.8% $17.08 0 0
Southern I-275 Corridor B 244,772 0 -648 -0.3% 0.8% 0.8% N/A 0 0
Southfield B 10,265,479 23,408 -103,105 -1.0% 29.5% 31.3% $17.20 0 0
Troy B 9,078,931 -210,628 -221,063 -2.4% 25.9% 27.9% $17.76 0 0
Washtenaw B 3,394,789 -97,956 -170,950 -5.0% 11.3% 13.6% $20.40 0 0
Suburbs B 38,948,237 -292,474 -511,662 -1.3% 22.2% 23.8% $17.91 0 0
CBD B 7,122,495 7,873 14,167 0.2% 17.7% 17.9% $21.51 0 0
New Center B 1,776,919 -19,334 -12,514 -0.7% 22.7% 22.8% $19.38 0 0
Urban B 8,899,414 -11,461 1,653 0.0% 18.7% 18.9% $21.07 0 0
Detroit B 47,847,651 -303,935 -510,009 -1.1% 21.5% 22.9% $18.38 0 0