DETROIT-Ann Arbor, a city west of Detroit and the home of the University of Michigan, was the one bright spot in a dismal third quarter, according to area experts. Office vacancy hit 23% for the Detroit region, one of the highest rates for a big city area in the country, and a CBD at more than 30% vacant. Office absorption also had its largest drop of the year, with the region gaining 231,983 sf, mostly from losses in Detroit, Southfield and Livonia.

Industry executives have struggled to find positives to mention when talking about Detroit’s woes, which include a hurting automotive industry that may see a merger between giants General Motors and Chrysler, as well as a credit crunch that put a hold on even the ambitious growth plans. “We’ve experienced a lot of pain,” says Fred Liesveld, EVP and managing director of the Detroit office of Grubb & Ellis. “But what doesn’t kill you makes you stronger, right? For the most part, Detroit businesses were already leaner and wiser, having been hit early by this crisis. We’ll eventually find our legs.”

All three of the main counties in the Detroit area: Wayne, Oakland and Macomb, all have headquarters or main offices of the Big Three automakers, and thus have suffered due to low sales numbers. However, Ann Arbor has never been dependent on the automotive industry, and its popularity showed the only instance of activity in the third quarter. For example, an office market report by Grubb & Ellis showed the city’s Northeast section absorbed almost 140,000 sf, by far the highest in the region. Con-Way Freight consolidated and relocated into about 136,000 sf in the Earhart Corporate Center in this submarket.

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