Supply remains scarce as Metro Detroit yet to exhibit signs of slowing
Much ink was spilled in late 2022 about the slowing national economy and the extent to which red-hot industrial markets would be impacted by the changing economic climate. The Detroit market remained thus far unaffected, continuing to exhibit strong demand and tight conditions at the close of the year. Overall vacancy rates tracked down 30 basis points through the year to 3.9%. The tightening of conditions was even more remarkable given the 7.1 million square feet (msf) of deliveries occurring this year, while another 8.8 msfof construction was ongoing at the year’s end. Meanwhile, asking rents across the Detroit industrial market again achieved record heights this period, increasing every quarter over the past two years. Averaging $6.32 per square foot this period, asking rents rose 6.4% year over year, in large part due to plentiful new development. While options exist across the region for both large and small users seeking space, significant competition persisted among tenants and purchasers seeking the best-quality spaces within the most desired submarkets.