Commercial real estate markets in the Western Michigan region are recovering strongly today, according to the latest research Colliers…
Colliers West Michigan recently released its second quarter market trend reports. These reports cover several markets and sectors. But the general message? Commercial real estate in this region of the state is largely recovering from the toughest months of the COVID-19 pandemic.
Michigan has largely lifted the pandemic restrictions that have had the biggest impact on business, Colliers reports. For many consumers, life has also become largely normal, with many once again comfortable shopping in person, dining in restaurants and traveling to hotels.
“We saw more positive emotions in the second quarter than before the COVID-19 pandemic, as people began to live by the new norm,” said John Potwin, managing director of Colliers West Michigan. “Some of what we learned during the pandemic will still affect several sectors across Michigan, but for the most part, many clients are happy to return to their regular jobs.”
Michigan’s industrial sector experienced another boom. Activity in this quarter was related to both sales and rentals, and Class A and B buildings are rapidly selling at higher prices per square foot than ever before.
Retail space is also filling up quickly as users bought up free space in premium shopping corridors in the second quarter. While the outlook for retailers is bullish, staffing problems persist, making it difficult for retailers and restaurants to reopen at full capacity as they did before the pandemic. Many businesses offer sign-in bonuses or increased salaries to attract employees.
“We are seeing a decline in vacancy rates and fixed rents as people look forward to the release and patronage of local stores and restaurants,” said Earl Clements, senior vice president of Colliers. “We advise clients to make decisions quickly as space continues to move rapidly.”
Office sector activity has picked up slightly after some extreme problems in the midst of the pandemic. The vacancy rate fell to 9.54 percent in the second quarter at a rental rate of $ 16.97 per square foot.
“It was a unique quarter for the office sector because companies are returning employees to the office, but they are also evaluating how to move on, sometimes with less space or a mixed work style,” said David Viner, senior vice president of Colliers. “The future of the office sector has changed significantly, but we are seeing increased activity and look forward to continuing to find a suitable location for our clients.”
Lansing, Michigan’s market is crashing due to the COVID-19 coronavirus and social distancing, as evidenced by increased activity in the second quarter. Consultants see more confidence and hope from buyers and tenants. Vacancy is still increasing, although consultants see it starting to decline, while rents have remained unchanged for Class A and -B premises and are declining for Class C premises.
“We are feeling positive in the Lansing market as restaurants and retailers are operating at full capacity, planned renovations and deals are being made,” said Sean O’Brien, vice president of the Lansing office of Colliers. “We are not out of the woods yet, but the increase in activity in the second quarter was a much-needed boost for the region.”
Activity in the second quarter in the Dutch, Michigan market was supported by an equal ratio of tenants to buyers. Tulip Time is back this year, a sign that Holland is returning a little to normal, although some of the challenges ahead of the pandemic persist, as in other regions.
“The Dutch market, like other markets in the state, is experiencing a shortage of workers and a lack of supply, especially in an industrial setting,” said Drew Durham, senior employee of the Dutch office at Colliers. “There are still some sore spots from COVID-19, but we are grateful to be on a positive trajectory.”