DETROIT-Retail vacancies have risen, and construction has slowed in the metropolitan area in the last year, but sales of retail buildings have stayed strong, according to a recent study by Marcus and Millichap. The economy hasn’t hit the Detroit area as hard as other areas in the US, says James Holt of the company.

“This can be attributed to Detroit’s industry diversification, absence of a large concentration of high-tech and the positive impact sales incentives have had on the automotive industry,” Holt says.

However, the economic downturn has still hit the area. For example, current conditions will prompt developers to remove several million square feet of construction from their drawing boards, Holt says.

“Only 1.3 million sf of new space is expected in 2003, a 43% decline from the 2.3 million sf added in 2002,” he says.

Projects include Milford Crossings in Milford, Oakwood Plaza in Allen Park, Willow Ridge in Van Buren, Chesterfield Commons in Chesterfield and Gateway II in Farmington Hills, as well as redevelopment efforts in the area.

Vacancies are expected to continue an upward climb into 2003, and are anticipated to close in December at more than 9%, Holt says. Rent growth has stagnated, he says, and more space has come into the market because of bankruptcies such as Jacobson’s and Kmart.

Good news is around the corner, however, Holt adds.

“Improved occupancies should be evident by 2003,” he believes. Also, big box developments have not faltered, Holt adds.

“Home Depot has four stores under construction or planned in Detroit and Farmington Hills, Walgreens remains active with three new stores in the planning phase and CVS, Lowe’s and Target also have stores under construction or well into the planning process,” Holt says.

Steady sales are expected ahead, Holt predicts. Through September 2002, sales of retail centers–68 transactions–had already surpassed the total number of transactions recorded in 2001. Free-standing retail continued to dominate activity.

Holt says the Detroit area’s short-term retail future is cloudy, and vacancies could continue to increase.

“Longer-term, however, prospects for positive economic growth, increased retail demand and a sharp decline in new completions will put Detroit retail back on a positive track,” he says.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.