Newmark Knight Frank - Detroit OFFICE Market Report - 2Q09

Commercial Real Estate Agent

A slight reprieve was seen in the Detroit office market in the second quarter of 2009. After six consecutive quarters of negative absorption, 69,244 square feet of space was removed from the market as the vacancy rate held at 22.5% from the first quarter. The vacancy rate is up from 21.5% one year ago and has remained above 20.0% for the past three years. The average asking rental rate fell in the second quarter to $19.75/sf from $19.90/sf at the end of the first quarter, and is down 2.4% from $20.24/sf over the last year. Rents have declined 12.6% from $22.60/sf, the peak during the fourth quarter of 2000.

According to the Bureau of Labor Statistics, employment growth in the Detroit metropolitan area was -6.2% for the 12 months ending in May 2009. The decrease in employment represented a loss of 47,900 jobs, indicating the largest amount of jobs lost in any 12-month period the BLS has on record, which dates back to 1990. The Consumer Price Index for Detroit advanced by 0.2% from February to April. The index declined 1.4% for the 12 months ending in April.

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Jason Tucker | Associate Director

Newmark Knight Frank, Inc.
34975 W. Twelve Mile Road | Farmington Hills, MI 48331
Phone: 248-848-4084 | Fax: 248-848-9041 | Cell: 248-431-8138
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