Detroit Ind 1Q10 1 Hi

8/9/2019 Detroit Ind 1Q10 1 Hi

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COlliers internatiOnal | detrOit

The Knowledge Report

mARKET INDICATORS

2009 2010

Q1 Q1

VACANCY

T ABSORPTION

ONSTRUCTION

RENTAL RATE

Detroit Industrial market Reports NegativeResults or the irst Quarter 2010Metro Detroit’s industrial/flex market began 2010’s first quarter with negative net absorption

Overall vacancy rates managed to remain close to the same from quarter to quarter in 2009

The first quarter of 2010 continued that trend and experienced negative results. Vacancy rate

slightly rose as well as a $0.08 decrease in rental rates. A continued drop in activity is expectedthroughout the year in all submarkets for both flex and warehouse type industrial product.

Property owners must continue to focus on retaining their existing tenants by enticing them

with lease concessions and rate reductions. Land sales and new construction are expected to

remain at a standstill until the overall absorption improves.

continued on page 2

INDUSTRIAL | IRST QUARTER | 2010

NEW SUPPLY, ABSORPTION &VACANCY RATES

under COnstruCtiOn by submarket

Washtenaw County

West Area

East Area

I-275 Corridor

Detroit

10,127

0

0

0

0

100%

1Q101Q091Q081Q071Q06

ion Square Feet Vacancy Rate %

New Supply Absorpt ion Vacancy Rate

12.5

13.0

13.5

14.0

14.5

15.0

This pie chart is showing

the current quarter’s under

construction by submarket


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Th Kwd Rprt | Firt Qrtr | 2010 | Dtrit | Idtri

Total industrial inventory in the

Detroit market area amounted to

463,944,034 square feet in 9,419

buildings at the end of the first

quarter 2010.

First quarter reports a negative net

absorption compromised of 959,150

square feet, with the highest

absorption this quarter found in

the Detroit area submarket.

INVENTORY

Total industrial inventory amounted to

463,944,034 square feet in 9,419 buildings

in the first quarter 2010. The flex sector

consisted of 39,409,031 square feet and the Warehouse/Distribution sector consisted of

424,535,003 square feet.

RENTAL RATES

This quarter the average overall asking rental

rate slightly decreased $0.08 and currently

stands at $4.44 per square foot.

R&D and Flex rates are double that of

warehouse/distribution in almost allsubmarkets and continue to fluctuate

significantly among the geographic market

sectors. Rates range as high as $11.68 per

square foot in the Southfield market to as low

as $5.61 per square foot in the Southern I-275

submarket. Most of the rental rates range

from $7.00 to $9.00 per square foot; with the

average settling at $8.23 per square foot in the

overall market.

Asking warehouse/distribution rates a

averaging $4.09 per square foot. Effective

rental rates are usually up to 20% less than

asking rates, due to concessions and face rate

reductions used as incentives for tenants to

commit to a lease.

VACANCY

Warehouse/Distribution vacancy

increase from 2009’s fourth quarter to14.1%. Some submarkets, such as Roya

Oak, Southfield and Farmington Hills, have

stabilized vacancy below 10%. Higher vacancy

rates are holding in the Detroit submarke

reaching 19.7%.

COLLIERS INTERNATIONAL

SALE & LEASE ACTIVITY

S A L E A C T I V I T Y

L E A S E A C T I V I T Y

PROPERTY ADDRESS SUBmARKETS SALE DATE SALE PRICE SIzE SQ T SALE PRICE SQ T

41100 Plyouth Rd Plyouth Township 2/1/10 N/A 866,000 N/A

47050 ive mile Rd Northville 3/18/10 $3,999,000 131,709 $30.36

2955 Haggerty Rd S Canton 1/15/10 $5,400,000 126,000 $42.86

531-631 Ajax Dr madison Heights 3/16/10 $1,750,000 116,786 $14.98

434 mcCorick Dr Lapeer 3/28/10 $1,000,000 92,625 $10.80

4121 N Atlantic Blvd Auburn Hills 3/15/10 $4,900,000 82,185 $59.62

47585 Galleon Dr Plyouth 3/5/10 $2,500,000 66,900 $37.37

BUILDING NAmE SUBmARKET TENANT SIzE SQ T

41873 Ecorse Rd Airport Exel Logistics 347,380

28400 Plyouth Rd Livonia mastronardi Produce 347,000

29700 Coerce Blvd macob Adavance Intigrated Tooling Solutions 115,539

6333 Lynch Rd Detroit Goodwill’s Green Works 94,192

46201 ive mile Rd Livonia N/A 64,631

1919 Concept Dr macob N/A 44,818

continued on page 4

EAST WEST

WASHTENAW

I-275

I-96

I-94

I - 7 5

I-96

DETROIT

I-275


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COLLIERS INTERNATIONAL 3

exiti Prprti Dirct Vcc s Vcc Tt Vcc nt arpti - sq Ft nw spp - sq Ft u/C & Prp. - sq Ft av Rt

Tt

C bd Ivtr sq Ft Rt sq Ft Rt sq Ft Rt Crrt yTD Crrt yTD udr Prpd Rt

sq Ft Prid Prid Ctr

DETROITW/D 962 82,020,295 15,505,205 18.9% 662,000 0.8% 16,167,205 19.7% 315,488 315,488 - - - - $2.99lex 36 2,028,822 397,650 19.6% - 0.0% 397,650 19.6% 4,900 4,900 - - - - $6.60

Tt 998 84,049,117 15,902,855 18.9% - 0.0% 16,564,855 19.7% 320,388 320,388 - - - - $3.08

DOWNRIVERW/D 385 41,553,334 5,437,175 13.1% 93,051 0.2% 5,530,226 13.3% - - - - - 10,000 $3.91lex 10 1,116,409 69,430 6.2% - 0.0% 69,430 6.2% 4,525 4,525 - - - - $7.00

Tt 395 42,669,743 5,506,605 12.9% 93,051 0.2% 5,599 ,656 13.1% 4,525 4,525 - - - 10,000 $3.99

DEARBORNW/D 231 12,720,925 1,350,830 10.6% - 0.0% 1,350,830 10.6% (77,851) (77,851) - - - - $3.40lex 54 3,075,464 1,699,127 55.2% 10,000 0.3% 1,709,127 55.6% (178,043) (178,043) - - - - $8.03

Tt 285 15,796,389 3,049,957 19.3% 10,000 0.1% 3 ,059,957 19.4% (255,894) (255,894) - - - - $4.30

I - 2 7 5 C O R R I D O RAIRPORT

W/D 658 36,430,880 6,279,252 17.2% 186,110 0.5% 6,465,362 17.7% (154,895) (154,895) - - - 1,409,845 $4.04lex 20 1,326,646 106,235 8.0% - 0.0% 106,235 8.0% (2,300) - - - - $8.41 -

Tt 678 37,757,526 6,385,487 16.9% 186,110 0.5% 6,571,597 17.4% (157,195) (154,895) - - - 1,409,845 $4.19

SOUTHERN I-275W/D 328 15,686,754 1,644,493 10.5% 1,074,888 6.9% 2,719,381 17.3% 12,367 12,367 - - - 645,602 $3.57lex 25 1,416,995 560,015 39.5% - 0.0% 560,015 39.5% (6,689) (6,689) - - - - $5.61

Tt 353 17,103,749 2,204,508 12.9% 1,074,888 6.3% 3,279,396 19.2% 5,678 5,678 - - - 645,602 $3.74

LIVONIAW/D 721 34,735,141 4,598,847 13.2% 317,912 0.9% 4,916,759 14.2% (189,464) (189,464) - - - 1,540,289 $4.55

lex 73 3,821,290 596,963 15.6% - 0.0% 596,963 15.6% 37,391 37,391 - - - 80,000 $7.82

Tt 794 38,556,431 5,195,810 13.5% 317,912 0.8% 5,513,722 14.3% (152,073) (152,073) - - - 1,620,289 $4.87

E A S TI-75 CORRIDOR

W/D 668 39,458,090 3,783,020 9.6% 25,896 0.1% 3,808,916 9.7% (336,760) (336,760) - - - 1,376,149 $4.96lex 105 4,912,410 743,877 15.1% 93,610 1.9% 837,487 17.0% (78,492) (78,492) - - - 114,036 $7.43

Tt 773 44,370,500 4,526,897 10.2% 119,506 0.3% 4,646,403 10.5% (415,252) (415,252) - - - 1,490,185 $5.23

mACOmBW/D 1,647 55,257,738 5,863,849 10.6% 145,439 0.3% 6,009,288 10.9% (67,599) (67,599) - - - 2,460,433 $3.71lex 44 1,290,055 280,398 21.7% 10,000 0.8% 290,398 22.5% 20,234 20,234 - - - - $5.64

Tt 1,691 56,547,793 6,144,247 10.9% 155,439 0.3% 6,299,686 11.1% (47,365) (47,365) - - - 2,460,433 $3.75

ROYAL OAKW/D 373 10,729,680 827,106 7.7% - 0.0% 827,106 7.7% (96,592) (96,592) - - - 962,568 $3.55lex 24 853,107 80,631 9.5% 11,857 1.4% 92,488 10.8% 3,119 3,119 - - - $7.11

Tt 397 11,582,787 907,737 7.8% 11,857 0.1% 919,594 7.9% (93,473) (93,473) - - - 962,568 $3.81

TROYW/D 865 25,782,280 3,517,423 13.6% 30,778 0.1% 3,548,201 13.8% 159,654 159,654 - - - 60,000 $4.56lex 113 3,885,896 766,718 19.7% 19,871 0.5% 786,589 20.2% 7,108 7,108 - - - 170,000 $6.58

Tt 978 29,668,176 4,284,141 14.4% 50,649 0.2% 4,334,790 14.6% 166,762 166,762 - - - 230,000 $4.82

W E S TCENTRAL I-96

W/D 680 29,020,672 3,499,186 12.1% 22,000 0.1% 3,521,186 12.1% (131,746) (131,746) - - - - $5.33

lex 127 4,240,864 976,875 23.0% 130,418 3.1% 1,107,293 26.1% (111,805) (111,805) 39,523 39,523 - - $9.77

Tt 807 33,261,536 4,476,061 13.5% 152,418 0.5% 4,628,479 13.9% (243,551) (243,551) 39,523 39,523 - - $5.90

ARmINGTON HILLSW/D 246 9,141,118 815,940 8.9% 22,550 0.2% 838,490 9.2% (9,920) (9,920) - - - - $5.23

lex 83 3,172,538 477,409 15.0% 60,754 1.9% 538,163 17.0% (11,667) (11,667) - - - - $8.46

Tt 329 12,313,656 1,293,349 10.5% 83,304 0.7% 1,376,653 11.2% (21,587) (21,587) - - - - $6.06

HOWELL/BRIGHTONW/D 224 8,983,606 1,152,913 12.8% 42,356 0.5% 1,195,269 13.3% (111,038) (111,038) - - - - $5.32

lex 12 273,751 93,972 34.3% - 0.0% 93,972 34.3% 5,277 5,277 - - - - $7.76

Tt 236 9,257,357 1,246,885 13.5% 42,356 0.5% 1,289,241 13.9% (105,761) (105,761) - - - - $5.39

SOUTHIELDW/D 115 3,806,930 173,050 4.5% 30,200 0.8% 203,250 5.3% 12,050 12,050 - - - - $4.46lex 41 1,821,575 534,651 29.4% - 0.0% 534,651 29.4% 15,890 15,890 - - - - $11.68

Tt 156 5,628,505 707,701 12.6% 30 ,200 0.5% 737,901 13.1% 27,940 27,940 - - - - $6.80

W A S H T E N A W C O U N T YW/D 416 19,207,560 2,682,999 14.0% 58,809 0.3% 2,741,808 14.3% 29,733 29,733 - - 10,127 100,000 $5.29lex 133 6,173,209 926,659 15.0% 21,762 0.4% 948,421 15.4% (22,025) (22,025) - - - 272,849 $10.13

Tt 549 25,380 ,769 3,609,658 14.2% 80,571 0.3% 3,690,229 14.5% 7,708 7,708 - - 10,127 372,849 $6.47

T O T A L SW/D 8,519 424,535,003 57,131,288 13.5% 2,711,989 0.6% 59,843,277 14.1% (646,573) (646,573) - - 10,127 8,564,886 $4.09lex 900 39,409,031 8,310,610 21.1% 358,272 0.9% 8,668,882 22.0% (312,577) (310,277) 39 ,523 39,523 - 636,885 $8.23

Tt 9,419 463,944,034 65,441,898 14.1% 2,408,261 0.5% 68,512,159 14.8% (959,150) (956,850) 39,523 39,523 10,127 9,201,771 $4.44

Q U A R T E R L Y C O m P A R I S O N A N D TO TA L SQ1-10 9,419 463,944,034 65,441,898 14.1% 2 ,408,261 0.5% 68,512,159 14.8% (959,150) (959,150) 39,523 39,523 10,127 9,201,771 $4 .44

Q4-09 9,395 461,158,849 63,100,091 13.7% 2,353,794 0.5% 66,115,885 14.3% - (5,433,274) 45,000 289,514 25,996 9,887,898 $4.52Q3-09 9,362 457,072,564 61,040,019 13.4% 2,212,501 0.5% 63,914,520 14.0% - 0 18,650 244,514 46,600 10,903,302 $4.64Q2-09 9,335 456,220,593 60,532,645 13.3% 2,101,200 0.5% 63,274,845 13.9% - (1,871,891) 90,864 225,864 65,250 11,610,439 $4.77

Q1-09 9,325 452,663,524 56,761,669 12.5% 1,742,247 0.4% 59,144,916 13.1% - (776,074) 135,000 135,000 112,118 15,306,447 $4.86Q4-08 9,284 449,173,375 54,124,559 12.0% 1,789,026 0.4% 56,554,585 12.6% - 1,292,628 133,878 252,594 190,020 16,787,880 $4.98

W/D = Warehouse/Distribution X = lex

D E T R O I T


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O Knowledge o Pop

Flex/R&D vacancy rates in the first quarter

decreased compared to 2009’s fourth quarter

and stand at 22%.

CONSTRUCTIONThe first quarter saw a total of 39,523 square

feet added to the industrial market at the end

of the first quarter 2010.

Approximately 10,127 square feet is currently

under construction; concentrated primarily

in the Washtenaw submarket.

ABSORPTION/LEASING ACTIVITY

The Detroit market reported a negativeabsorption of 959,150 square feet at the end

of 2010’s first quarter. The highest absorption

reported, found in the Detroit submarket,

was a positive 315,488 square feet.

SALES ACTIVITY

Total year to date, sales activity of industrial/

flex product decreased compared to the

same time last year. The 2009 industrial

market finalized around 120 industrial sales with a total volume of over $188 million,

considerably less than 2008 close of over

$470 million. The price per square foot this

year has averaged around $23.00, which is

about $22.00 per square foot less than the

average reported this time last year.

On a local level, sales are averaging

approximately $35-$55 per square foot.

Capitalization rates are averaging around

9.8%. Nationally, sale prices range from $60-

$85 per square foot, with capitalization rates

ranging from 6.9% to 8.9%.

CONTACT INORmATION

DETROIT

Cmr McCd

Director o Brokerage Service

2 Corporate Drive, Ste. 300

Southeld, mI 48076 USA

Tel: 248-540-1000

ax: 248-540-1038

ANN ARBOR

617 Detroit Street, Ste. 100

Ann Arbor, mI 48104 USA

Tel: 734-994-3100

ax: 734-222-9045

We aCCeleRaTe youR suCCess by MaKIng ouR KnoWleDge youR PRoPeRTy.

Whatever the requireent, our proessionals work in partnership to create a sealess solution or all o your coercial real estate needs. Our local arket expertise, eective use o technology, ephasis ontraining and “client-or-lie” philosophy continue to serve our clients well.

Source aterial and statistical inoration

unless otherwise noted, is provide by Th

CoStar Group, Real Capital Analytics, REIS

Bureau o Labor Statistics, and Colliers-Detroi

Research Departent. Statistics refect inventor

on buildings o 10,000 S or greater. Asking

Rental Rates are quoted on a grossbasis; pe

square oot annually. Inoration containe

herein was obtained ro sources is deeed

reliable. No representation is ade as to th

accuracy thereo. CTT Partners is a

independent eber o Colliers Internationa

CollIeRs InTeRnaTIona

294 OICES IN 61 COUNTRIESON 6 CONTINENTS

USA 9

Canada 2

Latin Aerica 1

Asia Pacic 6Europe, middle East 9and Arica

$1.6 billion in revenue

$48.1 billion in transaction valu

1.1 billion square eet o prounder anageent

4,660 active agents/brokers

12,749 proessionals

Detroit Ind 1Q10 1 Hi

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