5M-SF Owner Cuts Office/R&D Rates by 20%

Ford Land was established in 1970 to transform 2,360 acres of undeveloped land in Dearborn and Allen Park, Michigan, into a master-planned community. During the past three decades, Fairlane has become a five-million-sf community that includes office complexes, research and development parks, shopping centers, hotels, restaurants, residential communities and recreational facilities, as well as a championship golf course. The company is just lowering its rates for newly leased office and R&D space.

Mark Tomyn, director of sales, leasing and development at Ford Land, tells GlobeSt.com that competition has increased for office space. "There's not a lot of end users out there," he says. "It's forced landlords to get creative. This is a means of attracting tenants, we lower how much we charge, we want to look good in comparison to other landlords."

The company, a division of Ford Motor Co., now has lease rates for research and development space at $9.75 per sf net. Office space in six-story Fairlane Office Center and the 11-story Fairlane Plaza is at $10.50 and $14 per sf, respectively. "Some properties we cut prices up to 25%, the 20% figure is just an estimate," Tomyn says.

He says the move shouldn't be a sign of doom for the Detroit area, which relies heavily on office and R&D space for the automotive industry. "It's just a little more challenging market," Tomyn says. "There's tenants out there, such as healthcare and education. We're still doing deals, you just have to work a little harder." Conversely, the retail space at Fairlane is still going strong, he says.

According to a fourth quarter report by CB Richard Ellis, the automotive industry is expected to keep consolidating space in the Detroit area. Detroit's overall office vacancy is at 20.9%, with the CBD suffering the most, at more than 32% vacant. The average asking rate for the Dearborn market, says the company, is around $24.65 per sf for class A office space.