100 Grandville Ave SW Suite 100Grand Rapids, MI 49503616. 776. 0100 www.naiwwm.com
Wisinski ofWest Michigan
Office • Industrial • Retail • Multi-Family
Office Market ReportWest Michigan Q4 - Year End 2015
*Also serving the Kalamazoo & Southwest Michigan areas from our Kalamazoo office*
Looking Ahead at the Office Market in Sixteen. The West Michigan office market has continued to expand in 2015. The CBD has seen the most activity with several new projects under construction, buildings being renovated and the increase in multi-family units. All of this activity has continued to increase the demand for businesses to locate their offices in the CBD despite the increase in leasing rates and the cost of parking. It also has led some companies to find space on the out-skirts of the CBD where they can find lower rates and free parking, thus leading to the expansion of the downtown footprint. The West Side, North Monroe and Michigan Street areas are good examples of this.
The suburban office market continues to improve, however at a slower pace. Lease rates have not increased as much and continue to be well below the average lease rates for the CBD ($12.21/sqft vs $18.30/sqft for the CBD).
We are starting to see new construction of office buildings, however much of it is partially or fully preleased prior to commencement of construction.
What does the West Michigan Office Market look like for 2016? Look to see continued demand for office space in and around the CBD. The West and North side of downtown should see an increase in demand and continue to expand the downtown footprint. The increase in the cost to occupy space in the CBD may lead some businesses to revisit locat-ing in the suburbs. Look to see a decrease in vacancy rates in the SE and NE corridors. The announcement of Switch coming to the former Steelcase Pyramid building should result in an increase in demand for office space in the SE corridor as well. Overall, we see the Office Market continu-ing to improve in 2016.
* The information contained herein has been given to us by sources we deem reliable. We have no reason to doubt its accuracy, however, we do not make any guarantees. All information should be verified before relying thereon.
* Source: NAIWisinskiofWestMI, CoStar Property®, & U.S. Bureau of Labor Statistics
“How has the office
market changed over
the past 5 years? The
market has seen a
steady decrease in
vacancy rates, especially
with Class A office
space. Businesses have
seen the advantage of
improving their space at
a lower rate by moving
into vacant class A
spaces. Lease rates
have remained level
with the exception of the
CBD which has seen an
increase compared to 5
years ago.”
GRAND RAPIDS, MI
The Market
- Mary-Anne Wisinski-Rosely, CCIM,SIOR Principal | NAI Member
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1993 1996 1999 2002 2005 2008 2011 2014
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1993 1996 1999 2002 2005 2008 2011 2014
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1993 1996 1999 2002 2005 2008 2011 2014
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A New High and Soaring
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1993 1996 1999 2002 2005 2008 2011 2014
$ Bi
llion
sWell Below Average
Construction Trends Across the US & GR
0500
1,0001,5002,0002,5003,0003,5004,0004,5005,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total, All Structure Types Single Family Houses
Source: Census Housing Starts. -to-date, Oct 2015
2014 2015*
West MichiganOffice Submarket StatisticsMethodology: The office market report includes office buildings within each of the defined submarkets. Excluded are government buildings and institutional properties.
Office Space Statistical Changes Year-over-Year and Quarter-over-Quarter
CONSTRUCTION
CONSTRUCTION
ASKING RATES
ASKING RATES
VACANCY RATE
VACANCY RATE
NET ABSORPTION
NET ABSORPTION
4Q14 vs. 4Q15
3Q15 vs. 4Q15
Q4 Snapshot Submarket Total RBA Vacant
Available SFVacancy
RateTotal AverageRate ($/SF/Yr)
Total Net Absorption (SF)
Total Under Construction SF
DowntownClass A 1,366,022 84,961 6.2% $22.02 -11,923 188,562Class B & C 7,890,281 652,516 8.3% $14.59 60,651 162,800Total 9,256,303 737,477 8.0% $18.30 48,728 351,362NortheastClass A 294,197 15,943 5.4% $17.28 -5,464 -Class B & C 3,129,720 201,296 6.4% $13.18 12,704 -Total 3,423,917 217,239 6.3% $15.23 7,240 -NorthwestClass B & C 2,121,534 138,985 6.6% $10.93 6,548 -SoutheastClass A 1,065,736 80,021 7.6% $15.18 - -Class B & C 9,779,717 1,116,599 11.4% $10.76 30,792 38,802Total 10,845,453 1,196,620 11.0% $12.97 30,792 38,802SouthwestClass B & C 2,866,806 298,607 10.4% $9.72 11,122 -
Overall Total 28,514,013 2,588,928 9.1% $13.43 104,430 390,164
Kent County StatisticsTotal Market Report
C
0.00%
10.00%
20.00%
2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3
Vacancy Rate s
Vacancy Rates Class A Vacancy Rates Class B&C
Vacancy Rate
Total Rental Rate
0100,000200,000300,000400,000500,000
2011 2012 2013 2014 2015
0.00%
5.00%
10.00%
15.00%
20.00%
2011 20122 013 2014 2015
Vacancy Rates
Vacancy Rates Class A Vacancy Rates Class B&C
2012 2013
$0.00
$5.00
$10.00
$15.00
$20.00
2011 2012 2013 2014 2015
Total Rental Rate
Rental Rates Class A Rental Rates Class B&C
-200,000
0
200,000
400,000
600,000
2011 2012 2013 2014 2015
Absorption and Delivery
Total Net Absorption Class A Total Net Absorption Class B&C
RBA Delivered Class A RBA Delivered Class B&C
Methodology | Definitions | Submarket Map
SF/PSFSquare foot/per square foot, used as a unit of measurement.
Under ConstructionBuildings in a state of construction, up until they receive their certificate of occupancy. In order for CoStar to consider a building under construction, the site must have a concrete foundation in place.
DeliveriesBuildings that have their certificate of occupancy and are allowed to be moved into by the tenant/purchaser.
Vacancy RateAll physically unoccupied lease space, either direct or sublease.
Absorption (Net)The change in occupied space in a given time period.
Available Square FootageNet rentable area considered available for lease; excludes sublease space.
Average Asking Rental RateRental rate as quoted from each building’s owner/management company. For office space, a full service rate was requested; for retail, a triple net rate requested; for industrial, a NN basis.
Building ClassClass A Product is office space of steel and concrete construction, built after 1980, quality tenants, excellent amenities & premium rates. Class B product is office space built after 1980, fair to good finishes & wide range of tenants.
RBARentable Building Area - Mainly used for office and industrial.
NortheastNorthwest
SoutheastSouthwest
Downtown
In the spring of 2011, two successful and reputable companies, The Wisinski Group and NAI West Michigan merged. The merger represents collaboration, rich traditions, innovative technologies, unique cultures and diversity of skills and specialties which ultimately benefit our clients. We’re going back to our fundamentals, strengthening our core and becoming stronger in the services we provide our clients. Our focus is simple, build-ing client relationships for life by offering market appropriate advice and then executing. Our success is a direct result of its unwavering commitment to providing the best possible service to each and every client. Our Bro-kers, with their 630 plus years of combined experience (20 years average), possess the knowledge and exper-tise to manage the most complex transactions in industrial, office, retail, and Multi-Family specialities throughout West Michigan.
Achieve More.
Doug TaatjesCCIM, SIOR616 292 [email protected]
Marc TourangeauMBA269 207 [email protected]
Jeremy Veenstra616 242 [email protected]
Kara Schroer269 459 [email protected]
Mary Anne Wisinski-RoselyCCIM, SIOR616 575 [email protected]
Stanley J. Wisinski, IIICCIM, SIOR616 575 [email protected]
Russ Bono616 242 [email protected]
Dick Jasinski616 575 [email protected]
Meet Our Team
Office SpecialistsRod Alderink616 242 [email protected]
Jason Makowski616 575 [email protected]
Hillary Taatjes Woznick616 242 [email protected]
Local Knowledge. Global Reach.
Through our affiliation with NAI Global, we can also assist you with your commercial real estate needs throughout the US & globally right here from West Michigan.
Doug TaatjesCCIM, SIOR616 292 [email protected]
Marc TourangeauMBA269 207 [email protected]
Jeremy Veenstra616 242 [email protected]
Kara Schroer269 459 [email protected]
Mary Anne Wisinski-RoselyCCIM, SIOR616 575 [email protected]
Stanley J. Wisinski, IIICCIM, SIOR616 575 [email protected]
Russ Bono616 242 [email protected]
Dick Jasinski616 575 [email protected]
Office SpecialistsRod Alderink616 242 [email protected]
Jason Makowski616 575 [email protected]
Hillary Taatjes Woznick616 242 [email protected]
Cameron Timmer616 485 [email protected]
100 Grandville Ave SW Suite 100Grand Rapids, MI 49503616. 776. 0100 www.naiwwm.com
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Wisinski ofWest Michigan
Office • Industrial • Retail • Multi-Family
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