Office Report -NAI Farbman.indd

DETROIT
MARKETNAME
REPORT
NAI MEMBER
Offi
| Second
QuarterQuarter
2010 2010
Office
ce Report
| Second
DETROIT
Overall Vacancy (%)
OVERVIEW:
TRENDS:
Vacancy Rate
Overall Vacancy (%)
The 2nd quarter is showing continued signs of improvement in the
office market. After a relatively quiet start to 2010, vacancy rates are
coming down and rental rates are stabilizing.
20%
19%
18%
17%
16%
Farbman Group has completed leases this quarter at several of their
office buildings, such as Sheffield Office park in Troy and Bingham
Office Center in Bingham Farms. Other major transactions are listed
below.
Net Absorption
15%
2Q09
3Q09
4Q09
1Q10
2Q10
Source: The CoStar Office Report- 2nd Quarter 2010
Another bright spot in the commercial office market is the healthcare
real estate sector. Due to unemployment rates and most of the major
healthcare systems instituting capital freezes, we have seen an
increase in activity over the last 6 months. The increase in activity
is more on the leasing side versus acquisition. There is a great deal
of optimism in the air with respect to increased competition with the
healthcare systems that could stimulate growth in the medical real
estate market. This optimism stems from the recent transaction
between DMC, a non-profit, and for-profit Vanguard Health Systems.
Involving 8 hospital and millions of dollars, investment by Vanguard
will go towards new developments including a new Children’s Hospital
tower and other new real estate developments that could also stimulate
spin off activity such as new retail shops, restaurants and other
amenities to support the new medical developments.
Construction
Asking Rents
Cap rates have been higher in 2010, averaging 9.13% compared to the
same period in 2009 when they averaged 8.63%.
Average Asking Rental Rate
Average Asking Rental Rate / SF
$25
$20
$15
$10
$5
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
Source: The CoStar Office Report- 2nd Quarter 2010
Net Absorption (SF)
Class C
21%
Class A
25%
Cl
Class
B
52%
One of the largest transactions that has occurred within the last four
quarters in the Detroit market is the sale of Columbia Center in Troy.
This 506,598 sq. ft. office building sold for $122.39 per sq. ft., and
closed 5/14/2010.
Source: The CoStar Office Report- 2nd Quarter 2010
Major Lease Transactions
Tenant:
Building:
Size (SF):
Submarket:
Charter County of Wayne
Penobscot Building
145,030 SF
Wayne County
GalaxE Solutions, Inc
1001 Woodward
27,484 SF
Wayne County
N/A
PNC Center
19,443 SF
Oakland County
N/A
Sheffield Office Park IIIIIII
16,826 SF
Oakland County
N/A
Sheffield Office Park IIIII
8,972 SF
Oakland County
Source: The CoStar Office Report- 2nd Quarter 2009
*All rents are per SF/per YR unless otherwise noted.
NAI Farbman | 28400 Northwestern Hwy, 4th Floor | Southfield, MI 48034 | 248.353.0500 | www.naifarbman.com
DETROIT MARKET
County / Market Statistics / Market Map
Oakland County
•
•
•
•
•
Oakland County consists of 910 square miles and is located 20
miles north of downtown.
Significant entertainment and sports venues include DTE and
Meadowbrook outdoor theaters, the Palace of Auburn Hills -- home to
the Detroit Pistons, Cranbrook Institutions and the Detroit Zoological
Park.
Oakland County also ranks as the fourth wealthiest county in the
nation among counties with populations of more than one million
people.
Oaklanbd County hosts a rich mix of Fortune 500 companies: Borders
Group, Borg Warner, Inc.mLear Corporation, Kelly Services, FederalMogul, Pulte Homes, and United Auto Group all have headquarters
here. Daimler Chrysler North America AG is also headquartered
here.
General Motors Corporation ranks as the 18th largest corporation in
the world, is headquartered in Detroit, and is the largest employer in
Oakland County.
Oakland
Macomb
Southfield
Wayne
Detroit
Your City Submarkets:
Suburbs
City / Downtown
* Sources: Fortune Global, Crain’s Detroit Business: 2009 Book of Lists, Detroit Free Press.
com, www.oakgov.com, wikepedia.com
Macomb County
W 6 MILE
ER
HIGHLAND PARK
75
10
DIL
C
LA
D
LV
DB
1
TIREMAN ST
GE
Y
FW
WYOMING ST
D
LV
Detroit
W
JOY RD
MILLER RD
DB
AN
AN
GR
GR
W. WARREN AVE
153
IVM
VD
BL
96
W CHICAGO ST
ST
AN
JE
ST
PLYMOUTH RD.
E
AV
CA
39
N
RE
AR
EW
E.
SOUTHFIELD FWY
SCHOOLCRAFT ST
COOLIDGE HWY
5
ST
53
FENKEL ST
LOD
•
N
97
NN
•
W OUTER DR.
CO
•
Macomb County consists of 482 square miles and is located 20
miles north of downtown.
Three of the largest communities in Michigan are located in Macomb
County: Warren, Sterling Heights, and Clinton Twp.
Manufacturing is one of Macomb County’s leading industries,
employing roughly one third of the workforce. Macomb County is
home to one of the world’s largest and most productive industrial
corridors where you will find factories and research facilities of the Big
Three automakers, the U.S. Army Tank - Automotive and Armaments
Command and other manufacturing companies. Northern Macomb
county land remains largely agricultural.
Features 94 industrial parks, 8 community hospitals, Macomb
Community College and University Center.
ST
NT
NA
CO
•
12
* Sources: www.macombcountymi.gov, automationalley.com
Wayne County
•
•
•
•
•
•
Wayne County consists of 623 square miles and features a vibrant
downtown and New Center Area.
Home to three major airports and one of the nation’s busiest marine
ports.
Home to the largest boat marina in the country (Bell Isle’s Detroit
Yacht Club)
Access to Windsor, Canada by bridge or tunnel.
Home to two of the world’s largest corporations, General Motors
Corporation and Ford Motor Company.
Entertainment venues include Casino gambling, Cobo Hall, and Joe
Louis Arena
County
Population
Median Income
Oakland
1,202,174
$66,641
Macomb
830,663
$55,265
1,949,929
$42,529
Wayne
Source: US Census 2008 estimates
* Source: www.waynecounty.com
NAI Farbman | 28400 Northwestern Hwy, 4th Floor | Southfield, MI 48034 | 248.353.0500 | www.naifarbman.com
DETROIT MARKET
Office Report | Second Quarter 2010
Some of the data in this report has been gathered from third party sources and has not been independently verified by NAI Farbman. NAI Farbman makes no warranties or
representations as to the completeness or accuracy thereof.
NAI Farbman | 28400 Northwestern Hwy, 4th Floor | Southfield, MI 48034 | 248.353.0500 | www.naifarbman.com
DETROIT MARKET
Office Report | Second Quarter 2010
Some of the data in this report has been gathered from third party sources and has not been independently verified by NAI Farbman. NAI Farbman makes no warranties or
representations as to the completeness or accuracy thereof.
NAI Farbman | 28400 Northwestern Hwy, 4th Floor | Southfield, MI 48034 | 248.353.0500 | www.naifarbman.com
DETROIT MARKET
Office Report | Second
First Quarter
Quarter
2007
2010
NAI Farbman | 28400 Northwestern Hwy, 4th Floor | Southfield, MI 48034 | 248.353.0500 | www.naifarbman.com
DETROIT MARKET
Office Report | Second Quarter 2010
NAI Farbman | 28400 Northwestern Hwy, 4th Floor | Southfield, MI 48034 | 248.353.0500 | www.naifarbman.com
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