Large Users Fueling Industrial Absorption in Detroit

The Ford Motor Co. recently agreed to lease all of 28301 Schoolcraft Rd. in suburban Livonia .

DETROIT—User demand for large-block space has played a key role in elevating industrial activity in the Detroit region to heights not seen in decades. The metro area’s vacancy rate fell 40 bps to just 5.6% during the third quarter of 2016, as just over 1.8 million square feet was absorbed, according to a new report from Newmark Grubb Knight Frank.

The region is not just having one great quarter. Year-to-date absorption of 7.3 million square feet is on par with the 7.7 million square feet seen for the first three quarters of 2015. And even though user demand for modern bulk warehouses fuels most of the industrial activity in many US metro areas, the demand here is for both distribution buildings and large block manufacturing facilities. In fact, any firm looking for more than 100,000 square feet has few if any options.