What's Happening?
The Detroit industrial market experienced its weakest three-month period for net absorption since 2010 in the first quarter of 2025, according to Marcus & Millichap. The industrial vacancy rate rose to 4.7%, but is not expected to increase further this year. Despite this, Detroit maintains one of the lowest vacancy rates in the country. The slow pace of new industrial deliveries, with inventory expanding by just 0.5% in 2025, contributes to this. Consequently, the average asking rent for industrial space is projected to reach $7.74 per square foot, growing three times faster than the national rate.
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Why It's Important?
The rise in industrial rents in Detroit, despite a decline in net absorption, indicates a strong demand for industrial space amidst limited supply. This trend could impact businesses seeking industrial space, potentially increasing operational costs. The low vacancy rate suggests a competitive market, which could attract investors looking for stable returns. However, the slow pace of new deliveries may limit growth opportunities for businesses needing expansion space, affecting the local economy.
