"There was very little activity in metro Detroit's office leasing market in fourth quarter, capping off one of the slowest leasing years in recent memory," Fenster says. "It's more evidence that this slowdown is caused by a lack of demand for office space. This market is not overbuilt, which bodes well for a solid recovery once user demand for office space picks up."
For all of 2002, southeast Michigan's office market tallied 547,275 sf of negative absorption, he says. That compares to 1.02 million sf of negative absorption recorded in 2001 and more than 1.3 million sf of positive absorption in 2000, Fenster notes.
The overall office vacancy rate reached 16.1% at year-end, with 8.8 million sf of metro Detroit's 53.1-million-sf office inventory available for lease. That's more than two percentage points higher than year-end 2001, Fenster reports.
"Office markets here and nationwide will not recover until corporations build up cash reserves and feel in a better position to take on the risk of expansion," Fenster adds. "Only time will tell how long this process will take."
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