Multifamily rents in Western Michigan, which includes Traverse City, Northwest, Lakeshore, Lansing, Battle Creek and Grand Rapids areas, are rising at their highest pace since early 2023. That's based on the average ask increasing by 3.8 percent year-over-year to $1,370 in the third quarter, according to a market report from Colliers.
"Rent growth was strongest in Battle Creek at 6.6%, while Grand Rapids and Lakeshore also saw healthy increases driven by stable occupancy," Colliers wrote. Another reason for the strong gains can be attributed to "steady demand and limited concessions."
Occupancy was up by a modest 10 basis points to 93.9 percent.
Meanwhile, some other core fundamentals lagged, as construction was elevated at 5,142 units compared with 4,243 a year ago. Stabilized vacancy saw an 80 basis point increase to 5.5 percent. This suggests that "newer deliveries are still in lease-up mode," according to Colliers.
Also, sales activity was weak, at just $154.7 million compared to the $192.7 million in volume seen in the previous three months. This represents "continued investor caution," according to Colliers. The largest multifamily deal in West Michigan involved 181-unit Gateway Loft Lansing, trading hands for $38 million. That was followed by 201-unit Crosstown Parkway in Kalamazoo, selling for $20.5 million and 188-unit Lakeside Apartments in Battle Creek, going for $16.1 million.
Despite the underwhelming sales, Colliers seems bullish about the second half of the year for multifamily in Western Michigan.
"With strong fundamentals and a deepening renter pool, the market appears well-positioned for continued momentum heading into year-end," it said.
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