det-gm-renaissance-center-headquarters (3)

DETROIT—The Detroit region's office market has been transformed in the past few years. Suburban firms have been leaving the suburbs in big numbers and settling in the CBD, which now pulses with activity. Once underutilized office buildings are now filled with workers, and many warehouse and other industrial structures adjacent to the CBD have been renovated into residential buildings. That story can be told in a set of statistics recently compiled by CBRE.

The firm found that just seven large contiguous office spaces, defined as larger than 50,000 square feet, remain available in the CBD, but 37 such spaces are available in the suburban submarkets. In suburban Southfield, the second largest submarket, 13 large spaces are available, the most of any submarket in the region.

The migration of suburban firms really began to accelerate about six or seven years ago, Paul Beitz, senior vice president of CBRE, tells GlobeSt.com, when numerous properties were bought by Bedrock Real Estate Services, a company run by Dan Gilbert, the chief of Quicken Loans. “He has been able to fill those buildings with his employees and to attract other companies. Much of the excitement about downtown comes from companies that have younger employees, many of whom like the urban environment.”

A lot of these companies moving to Detroit are tech-oriented or involved in creative work, he adds, and includes many start-ups also looking to take advantage of the city's lower cost s.

And the CBD not only has a host of new sports stadiums and apartment buildings, but new retail has also been filling up once empty storefronts. Beitz points out that the CBD recently got a new 22,000 square foot Nike store, which opened last spring in the former F.W. Woolworth building on Woodward Ave.

Still, there are always going to be firms that consider the suburbs a better fit, he adds. For example, “the downtown environment doesn't work for a call center that needs a high parking ratio. In the Detroit market, parking is almost always free in the suburbs.” And some other firms will want to remain close to their employees' homes. Although millennials may prefer the city, “the majority of the population is still in the suburbs.”

But this trend of suburban-to-urban migration, also observed in many other Midwest cities, shows little sign of slowing down.

“We're not at that point yet,” says Beitz. “Many firms, both from the suburbs and from out-of-state, continue to express an interest in moving into the downtown because they like what's going on.”

General Motors

A lot of these companies moving to Detroit are tech-oriented or involved in creative work, he adds, and includes many start-ups also looking to take advantage of the city's lower cost s.

But this trend of suburban-to-urban migration, also observed in many other Midwest cities, shows little sign of slowing down.

Instant Insights /

Large Blocks of Space Become Rare in Detroit CBD

Related Stories

Recommended For You