Since the start of 2009, the area has seen a negative absorption of 874,775 square feet. Although the amount of space become available did tapper off this quarter, with only an additional 29,128 square feet entering the market.
Detroit's central business district has a vacancy rate of 30.9%. Although the submarket did see positive absorption for the first time in five quarters due to the 64,000-square-foot lease by United Way at the 1st National Building.
Grubb & Ellis executives, who are watching the market closely, believe the economy will continue to weaken throughout 2009 as unemployment continues to rise. Vacancy rates will also increase as a result.
A silver lining in the market is the "Continued investments in alternative energy and advanced battery systems fostered by tax abatements and Energy Department grants are forming a base of new industry," DeGroot says in the report. "Look for gains in the high-tech manufacturing sector to trickle into the service sector in late 2010."
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