The region's industrial space vacancy rate ticked up 0.1 percentage points to 4.1 percent as 1.5 million square feet of speculative space came online, according to a new fourth-quarter report from Newmark Knight Frank.
The report also says rents continue their upward trajectory, increasing to $5.99 per square foot in Q4 from $5.86 per square foot in Q3. They were $5.56 a year ago in metro Detroit's approximately 390 million-square-foot industrial market.
"The positive performance of newly completed speculative developments and continued groundbreaking for build-to-suit facilities are indicators that (the) Metro Detroit industrial market remains strong," the report says.
Industrial real estate for years has been considered one of the bright spots in Detroit area real estate as the auto industry's health has propelled business for manufacturers and others in the region.
"At this moment in time, occupancies remain incredibly strong and I don't see anything that would suggest things are about to change for the worse, other than it's lasted so long it's almost too good to be true," said Peter Burton, principal of Bingham Farms-based developer Burton-Katzman LLC. "All of our buildings are full and they rarely go empty, and if they do go empty, they fill up almost immediately."
The region's two largest industrial submarkets, Macomb County and southeast Oakland County, have vacancy rates of just 3 percent and 2.3 percent, respectively, according to the Newmark Knight Frank report.
Macomb County has 82.75 million square feet with rents of $5.28 per square foot for general industrial space, $6.47 per square foot for warehouse/distribution space and $7.19 per square foot for R&D/flex space. In southeast Oakland's 87.24 million square feet, general industrial is $5.87 per square foot, warehouse/distribution is $5.99 per square foot and R&D/flex is $9.03 per square foot.
The report says that 113 industrial projects totaling 18.5 million square feet have been completed in the last five years.
A longtime Detroit property owner is asking $18 million for a group of Detroit riverfront properties.
Penny De Vaull says this is the first time she has listed her five-property portfolio that includes buildings totaling about 48,000 square feet and 1.15 acres of land at 1969 Franklin St.; 1964-1974 Franklin; 2013 Franklin; 271 St. Aubin St. and 2000 Woodbridge St.
She said the price tag comes from seeking $200 a square foot for the 48,000 square feet of building space ($9.6 million) and the land (about 50,000 square feet, or $10 million), which is based on the $194 the former Woodbridge Tavern next door to her buildings at 289 St. Aubin St. sold for in January 2019. The new owner, Acceptance LLC, which is registered to Howard Hanson III in Detroit, paid $600,000 for it a year ago, according to CoStar Group Inc., a Washington, D.C.-based real estate information service.
(By comparison, Dan Gilbert paid $41.74 per square foot for 2.75 acres, or 119,790 square feet, of vacant east riverfront land in November 2018. In September 2018, a New York City-based real estate investor paid $2.125 million, or $75.89 per square foot, for the Elevator Building at 1938 Franklin St.)
De Vaull said she began assembling the properties three decades ago when she was trying to develop the area.
"My vision was to do like a downtown Birmingham but I knew I needed enough property. I started acquiring and assembling in that area to get a big enough footprint. Just as I was starting to rehab one building on the corner of St. Aubin and Franklin, they announced the casinos" on the Detroit riverfront, she said.
"I stopped my plans for that when they announced casinos are coming because it wouldn't make sense to go forward with my plan if they were buying out the area. My dream was really being thrown out the window."
The city had planned casinos on the riverfront but abandoned that plan about two decades ago.
Du Vaull said one of her buildings, 1964-1974 Franklin, had been used by the notorious Purple Gang. She said previous longtime owners and families in the area had told her of the gang's use of the building during Prohibition a century ago.
However, a history of the building compiled for the East Riverfront Framework Plan says that it was built in 1907 and was originally used for the Pressed Steel Sanitary Manufacturing Co. Eventually, it was used by Studebaker Corp.
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January 15, 2020 at 02:17AM
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Real Estate Insider: Industrial market remains a bright spot in Detroit area real estate - Crain's Detroit Business
"industrial" - Google News
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