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SOUTHFIELD, MI-Relocating insurance companies have created vacancy spikes in local office buildings, according to a recent report issued by Grubb & Ellis. For example, Blue Care Network of Michigan’s relocation to the Allied Center led to 160,000 sf of additional vacant class B space in the Riverside Center.

Meanwhile, Meadowbrook Insurance Group vacated more than 80,000 sf in the class B Brookview Building. Meadowbrook Insurance relocated to its recently completed 150,000-sf build-to-suit building, the American Commerce Center. Another firm, MSX International is also vacating its office space at 28333 Telegraph. That move adds roughly 78,000 sf of additional open class B space to the market.

In the first quarter of the year, the class A Southfield office market witnessed positive gains with roughly 12,085 sf of positive absorption, lowering the vacancy rate 120 basis points to 19.9% from the previous quarter.

Vacant space added to the market by Meadow Brook Insurance and MSX contributed to 220,798 sf of class B negative absorption during the first quarter. The class B vacancy rate increased 190 basis points from the previous quarter to 24.6% in early 2005. As a whole, the overall office vacancy rate in the Detroit area increased 20 basis points to 21.1% in the first quarter of 2005 from the last quarter of 2004.

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