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Industrial employment trends (12-month change, 000s)
Source: JLL Research
Rents continue to rise
Source: JLL Research
Absorption remains positive as availability declines
Source: JLL Research
Michigan industrial evolves with disruption
Michigan’s industrial market is garnering the most interest from those who
recognize the automobile industry is ripe for a disruption. Think driverless cars.
Detroit is already more symbiotic with Silicon Valley than some give it credit for.
There are more lines of code in the average car than in virtually every other
computer system in the world. The big question is whether or not Michigan has
the homegrown talent to fill these new advance jobs, and if not, will the city and
surrounding areas be attractive enough to pique the interest of those looking at
the area for well-paying jobs.
Get while the getting is good
Sensing a shift in economic sentiment and increased demand for industrial
properties in the market, opportunistic owners are looking to exit through
disposition for pre-recession prices. Average asking rents for the first quarter of
2016 were $4.50 per square foot, up 6.1 percent year-over-year. Many still feel
the necessary asking rate to justify speculative construction is closer to $5.00.
The Macomb County submarket and the Airport/I-275 Corridor are especially
high demand areas with availability rates of 5.9 percent and 9.1 percent,
respectively. Overall, total availability decreased 17.7 percent year-over-year to
9.0 percent. Look for strong speculative construction activity to continue in the I-
96 corridor and several bulk distribution projects slated to break ground before
the end of 2016.
Detroit’s industrial continues to attract demand
Those looking to enter Detroit’s industrial property sector are finding an
environment that is similar to the U.S industrial property sector as a whole - high
demand and not enough supply. There is no denying Michigan’s importance to
the supply chain due to its proximity to Canada and the buying power of the
region. This goes to explain why Detroit along with Inland Empire, Dallas-Fort
Worth, Atlanta, Chicago and Philadelphia accounted for 34.1 percent of industrial
demand. However, there is reason for caution, as the potential weakening of the
U.S. manufacturing sector, a decline in exports, and slowing growth in China
may negatively impact the market going forward.
Detroit industrial continues to improve
Industrial Insight
Detroit | Q1 2016
41,216,015 Total availability (s.f.)
1,358,317 YTD Total net absorption (s.f.)
$4.50 YTD Average Asking Rates
1,404,552 Total under construction (s.f.)
9.0% Total Availability
.3% YTD total net absorption
6.1% YOY Rent Growth
459,951 YTD completions (s.f.)
©2016 Jones Lang LaSalle IP, Inc. All rights reserved. For more information, contact: Aaron Moore | [email protected]
-40.0
-20.0
0.0
20.0
40.0
2011 2012 2013 2014 2015 2016
Trade,Transportation & Utilities Manufacturing
Other Services Mining, Logging & Construction
0.00%
5.00%
10.00%
15.00%
0
1,000,000
2,000,000
3,000,000
4,000,000
Q1 2015 Q2 2015 Q3 2015 Q4 2015 YTD 2016
Total availability Quarterly Absorption
$0.00
$2.00
$4.00
$6.00
$3.50
$4.00
$4.50
$5.00
2012 2013 2014 2015 YTD 2016
Airport W&D Total W&D Macomb W&D
