By: DeVon Jackson & Levi Smith | P.A. Commercial
December 20, 2022
The Metro Detroit Office Market in 2022: Understanding the Ups and Downs
Despite the pandemic, the real estate market has continued to thrive because of a continuous influx of investments from homebuyers and tenants across the country. The Detroit commercial real estate market has especially flourished this year with a higher demand for office space for lease in Detroit across the city.
In this report, we take a closer look at the highlights of the last quarter of 2022 and how the Metro Detroit office market is faring so far:
- The Metro Detroit office market has an asset value of $25.8 billion, comprising over 198,569,670 square feet of office space for lease in Detroit and other commercial spaces. The city’s commercial real estate market makes up 57% of the entire state of Michigan’s office properties.
- The commercial real estate industry has enjoyed sales of over $823 million in the last year, 75% of which were in the Metro Detroit office market.
- This year, a good chunk of the metro Detroit office sales were in suburban areas like Troy North, Birmingham, Bloomfield West, and Southern I-275 Corridor. The areas of Detroit CBD, Southfield, Troy South, Southern I-275 Corridor, and Dearborn also had the highest inventory for office space for lease in Detroit and commercial property for sale in the city.
As we move forward to 2023, experts made a forecast on what we should expect in the Metro Detroit office market in the coming year:
- We will see that some of the office inventory in the CBD area will be repurposed. These commercial spaces will be given new life to generate new business, such as converting them into hotels or other establishments.
- This year, we’ve seen many businesses set up shop in the suburbs, and that trend will continue in 2023 as more companies are now moving into the suburban real estate market. For instance, BMC Compuware recently moved to Southfield’s Town Center from its original headquarters in Downtown Detroit.
- The Detroit CBD is becoming an entertainment hub where many commercial establishments are being converted into hotels, event venues, sports venues, and casinos to drive more visitors into these areas.
- We will see more businesses and organizations downsizing their office spaces in the Detroit Metro office market. So, there will also be an influx of inquiries for office space for lease in Detroit in the coming year.
Despite the challenges, the Detroit Metro office market has seen some progress and growth this year. Because of the pandemic, there have been some shifts in the trends that involve the commercial real estate market in Detroit, including the need for smaller spaces or having offices outside the city center. But with the resilience of the industry, it won’t be long until the market adapts and continues to offer the best options to businesses that are looking for a good office space for lease in Detroit or commercial spaces for sale that they can turn into their own headquarters in the future.