(To read more on the industrial market, click here.)

(Natalie Keith is a contributing writer to GlobeSt.com.)

DETROIT-With demand in the automotive industry continuing to soften, the metro Detroit area industrial market saw a jump in vacancies in the fourth quarter of 2005, according to a market report issued by Grubb & Ellis Co’s Southfield office.

With more than 2.2 million sf of industrial space returning to the market over the quarter, the vacancy rate for the market jumped to 11.2% from 10.7% in the third quarter. Asking rents averaged $4.65 per sf, for manufacturing space, $4.16 per sf for warehouse space and $9.72 per sf for research and development space.

Detroit experienced the highest vacancy rate at the end of the quarter at 23.2%, followed by Southwestern Oakland County at 12.6% and Western Wayne County at 11.7%. Southeastern Oakland County saw the lowest vacancy rate at 7.6%.

Consolidations, downsizing and bankruptcies had a negative impact on the market during the quarter. In Southeastern Oakland County, 690,000 sf of space was returned to the market following Kmart’s departure and other related bankruptcies. Despite new leases signed during the quarter, the area overall saw 531,960 sf returned to the market.In Southern Wayne Country, the vacancy rate jumped two percentage points to 12.9% following large blocks of space becoming available at the Northline Industrial Center, 600,000 sf; the Van Born Metro Commerce Center, 300,000 sf; and the Romulus Business Center, 100,000 sf.

Despite substantial leasing activity in Macomb and Western Wayne counties, those two areas saw no change or a slight increase to vacancy rates over the quarter. In Macomb County, the vacancy rate remained at 10.5% while in Western Wayne County, the vacancy rate jumped to 13.5%.

On a bright note, there were several large transactions in Southern Wayne County that nearly depleted the area’s inventory of class A warehouse space. As a result, developers are moving forward with construction of three class A warehouses in the area.

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