DEVELOPMENT THE RIGHT PLACE REPORT 2024
SUMMARY D evelopers continue to choose Greater Grand Rapids as the place to make their projects a reality. This year has seen progress on several cityscape- level projects including the Acrisure Amphitheater and Grand Rapids Soccer Stadium and numerous other mixed-use and residential projects. The industrial market continues to remain strong with high demand for build-ready sites, while the office and retail markets are showing some signs of renewed activity amid a challenging environment. The residential housing sector continues to face a shortfall of available units across all levels of housing, providing ample demand for development. Overall, Greater Grand Rapids continues to offer a dynamic and opportunity-rich market for development.
Note on the data: Greater Grand Rapids refers to the Grand Rapids-Kentwood metropolitan statistical area (MSA), which includes Kent, Ionia, Montcalm, and Ottawa counties.
01
SUMMARY
STATE OF DEVELOPMENT
Office
Key Metrics
Q1 2023 Q1 2024 Change
Inventory
13,365,446 sq ft
13,518,693 sq ft
Signs are pointing to renewed activity in Greater Grand Rapids’ office market. Both direct and sublease vacancy rates decreased in the most recent quarter, bolstered by 95,000 square-feet of new absorption as several organizations across the region signed substantial leases. This increase in demand drove asking rates up slightly, though they remain lower than their peak in mid-2023.
Vacancy
13.3%
12.7%
Asking Rent
$21.57
$21.65
Net Absorption
-38,094 sq ft
95,412 sq ft
Under Construction
10,812 sq ft
0 sq ft
Source: JLL U.S. Office Insights
Industrial
Key Metrics
Q1 2023 Q1 2024 Change
Inventory
122,082,721 sq ft
122,821,029 sq ft
The industrial market in Greater Grand Rapids remains extremely tight. Inventory rates have generally increased since 2019, however not enough to significantly impact vacancy, which has hovered under 2%. In this hot industrial climate, direct asking rents jumped nearly 16% from Q1 2023 to Q1 2024. Q1 2024 also saw approximately 428,000 square-feet of industrial space come back onto the market, compared to the 450,000 square-feet that was absorbed during the same quarter the previous year. The backlog of industrial projects continues to decline as companies complete construction without new projects breaking ground.
Vacancy
1.8%
1.9%
Asking Rent
$5.67
$6.56
Net Absorption
450,602 sq ft
-427,601 sq ft
Under Construction
1,119,269 sq ft
349,700 sq ft
Source: NAI Wisinski of West Michigan
02
STATE OF DEVELOPMENT
Retail
Key Metrics
Q1 2023 Q1 2024 Change
Inventory
20,830,458 sq ft
20,787,800 sq ft
Though the retail market has remained relatively flat over the past year, gradual decreases in vacancy rates suggest a slight uptick in activity in the coming quarters. Asking rents remained stable, though the pipeline of new retail construction continues to slide as inventory levels remain flat. This may indicate the market is more focused on optimizing and revamping existing space rather than new construction.
Vacancy
4.9%
4.80%
Asking Rent
$15.81
$15.69
Net Absorption
59,927 sq ft
14,900 sq ft
Under Construction
14,250 sq ft
13,500 sq ft
Source: Colliers
Housing
Key Metrics
Q1 2023 Q1 2024 Change
Single Family Home Sales
1,937
1,658
Greater Grand Rapids’ housing market for single- family dwellings is under considerable constraint. Supply of available housing listed on the market and sold has declined significantly, putting further pressure on cost.
Average Listings per Quarter
916
665
Average Days on Market
35
34
Median Listing Price
$390,883
$412,793
Source: Greater Regional Alliance of Realtors and Realtor.com
03
STATE OF DEVELOPMENT
STATE OF DEVELOPMENT DIVING DEEPER
OFFICE – Key Metrics
OFFICE INVENTORY
15M
14M
13M
13,365,446 sq/ft
12M
13,413,455 sq/ft
11M
10M
9M 8M
7M
6M
2019
2020
2021
2022
2023
2024
Source: JLL
Office inventory levels rose 1% from Q1 2023 to Q1 2024, surpassing more than 13.5 million square feet.
OFFICE VACANCY
Direct Vacancy
Sublease Vacancy
Total Vacancy
16%
13.3%
12.7%
14%
12%
10%
11.2%
10.8%
8%
6%
4%
1.9%
2.1%
2%
0%
2019
2020
2021
2022
2023
2024
Source: JLL
Vacancy rates in the office sector have declined since mid-2023, leading Greater Grand Rapids to have one of the lowest vacancy rates across the country, according to JLL. Office vacancy reached 12.7% in Q1 2024, down from 13.6% in Q4 2023 and 13.3% in Q1 2023. Direct lease rates and sublease rates contributed to this decline.
04
STATE OF DEVELOPMENT – DIVING DEEPER
OFFICE – Key Metrics
OFFICE RENT
$24.00
$21.57
$22.00
$21.65
$20.00
$18.00
$16.00
$14.00
$12.00
$10.00
2019
2020
2021
2022
2023
2024
Source: JLL
Positive net absorption in Q1 2024 exceeded 95,000 square feet, the highest absorption rate since Q2 2022. Notable leases included Evolution Gaming (34,000 sq. ft.), Vervint (19,000 sq. ft.), Rockefeller Capital Management (10,000 sq. ft.), and Booking.com (5,500 sq. ft.). As vacancy rates continue to shrink, direct rent ticked up from $21.22 sq/ft in Q4 2023 to $21.65 in Q1 2024. That compares to $21.57 sq/ft in Q1 2023. Rates for office space peaked in Q3 2023 at $22.06 sq/ft.
OFFICE SPACE UNDER CONSTRUCTION
450K 400K 350K 300K 250K 200K 150K 100K 50K 0
0 sq/ft
2019
2020
2021
2022
2023
2024
Source: JLL
The office construction pipeline was exhausted by mid-2023. No new significant office construction was reported in Q1 2024.
05
STATE OF DEVELOPMENT – DIVING DEEPER
INDUSTRIAL – Key Metrics
INDUSTRIAL INVENTORY
124M
122M
122.82M sq/ft
122.08M sq/ft
120M
118M
116M
114M
112M
2019
2020
2021
2022
2023
2024
Source: NAI Wisinski of West Michigan
Industrial inventory levels have generally increased since 2019. Inventory levels reached 122.82 million square- feet in Q1 2024, rising 0.6% over the same period the previous year. Inventory levels peaked in Q4 2023 with 123.39 million square-feet, before declining in Q1 2024. The last time industrial inventory levels dipped was between Q2 2022 and Q4 2022.
INDUSTRIAL VACANCY
4.0%
3.5% 3.0%
2.5%
2.0%
1.9%
1.5%
1.8%
1.0% 0.5%
0.0%
2019
2020
2021
2022
2023
2024
Source: NAI Wisinski of West Michigan
Vacancy continues to run extremely tight for industrial property in Greater Grand Rapids. Vacancy rates eased a tenth of a percent to 1.9% in Q1 2024 from 1.8% in Q1 2023. Post-pandemic, industrial levels have continued to constrict, with rates hovering between 1.8% and 2% since Q1 2023.
06
STATE OF DEVELOPMENT – DIVING DEEPER
INDUSTRIAL – Key Metrics
INDUSTRIAL RENT
$7.00
$6.00
$6.56
$5.00
$3.91
$5.67
$4.00
$3.00
$2.00
$1.00
$0.00
2019
2020
2021
2022
2023
2024
Source: NAI Wisinski of West Michigan
Net absorption rates have trended positive since Q1 2020, however dropped to negative 427,601 square-feet in Q1 2024. That compares to the same period the previous year when the industrial market saw a positive 450,602 square-foot absorption. Industrial rents grew nearly 16% from $5.67 per square-foot in Q1 2023 to $6.56 per square-foot in Q1 2024. Rents have grown 68% since Q1 2019 when they were $3.91 per square-foot.
INDUSTRIAL SPACE UNDER CONSTRUCTION
3.0M
2,676,356 sq/ft
2.5M
2.0M
1.5M
1,119,269 sq/ft
1.0M
500K
349,700 sq/ft
0
2019
2020
2021
2022
2023
2024
Source: NAI Wisinski of West Michigan
Industrial space under construction peaked in Q4 2021 with 2.7 million square-feet in the pipeline. Since then, the industrial pipeline has continued to be whittled down, shrinking 69% from approximately 1.1 million square feet in Q1 2023 to nearly 350,000 square feet in Q1 2024.
07
STATE OF DEVELOPMENT – DIVING DEEPER
RETAIL – Key Metrics
RETAIL INVENTORY
24.5M
23.5M
22.5M
20.83M sq/ft
21.5M
20.79M sq/ft
20.5M
19.5M
18.5M
17.5M
2021
2022
2023
2024
Source: Colliers
Overall inventory of retail space declined less than a percentage point to 20.79 million square feet in Q1 2024 compared to 20.83 million square feet in the same quarter of 2023. Current inventory levels are equal to those of mid- to late- 2021. Retail submarkets including 28th Street SW, Alpine Avenue, and Rivertown Parkway gained inventory from Q1 2023 to Q1 2024. Submarkets including 28th Street SE, East Beltline, and Plainfield Avenue/Northland Drive recorded declining inventories during the same period.
RETAIL VACANCY
10.0%
8.0%
6.0%
4.9%
4.8%
4.0%
2.0%
0.0%
2021
2022
2023
2024
Source: Colliers
Retail vacancy rates declined to 4.8% in Q1 2024 from 4.9% in Q1 2023 and 6.2% in Q1 2022.
08
STATE OF DEVELOPMENT – DIVING DEEPER
RETAIL – Key Metrics
RETAIL LEASE RATES
$18.00
$15.81
$15.69
$16.00
$15.00
$14.00
$12.00
$10.00
$8.00
2021
2022
2023
2024
Source: Colliers
Retail lease rates declined marginally from $15.81 in Q1 2023 to $15.69 in Q1 2024. Leasing rates for retail space have hovered within the $15-range since Q4 2022.
RETAIL SPACE UNDER CONSTRUCTION
200K 160K 180K 120K 140K 80K 100K
40K 60K 0 20K
14,240 sq/ft
13,500 sq/ft
2021
2022
2023
2024
Source: Colliers
Retail space under construction continues to taper off with 13,500 square-feet in the pipeline in Q1 2024 – a figure slightly lower than the 14,240 square-feet under construction during the same quarter the previous year, and down significantly from the 172,000 square-feet under construction in Q1 2022.
09
STATE OF DEVELOPMENT – DIVING DEEPER
HOUSING – Key Metrics
SINGLE FAMILY HOME SALES
5K 4.5K 4K 3.5K 2K 2.5K 3K 1.5K 1K 500 0
2019
2020
2021
2022
2023
2024
Source: Greater Regional Alliance of Realtors (GRAR)
Quarterly single family homes sales in Greater Grand Rapids declined 14% in Q1 2024 compared to the same quarter the previous year. Home sales, in general, have fallen year-over-year since 2020. From 2015 to 2020, annual home sales hovered between 13,000 and 14,000 units. Annual home sales have since declined 29% from 2020 to 2023, reaching 9,500 units in 2023. This decrease is likely driven by increased housing costs, rising interest rates, and general financial uncertainty. Changes in average active listings and average days on market also reflect a cooling residential market.
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STATE OF DEVELOPMENT – DIVING DEEPER
HOUSING – Key Metrics
AVERAGE ACTIVE LISTINGS PER QUARTER
3K
2,700
2.5K
2K
1.5K
916
1K
665
500
0
2019
2020
2021
2022
2023
2024
Source: Greater Regional Alliance of Realtors (GRAR)
Average quarterly listings fell 27% to 665 listings in Q1 2024, compared to the 916 average listings posted in the same quarter the previous year. Average quarterly listings have steadily declined from a peak of 2,700 listings in Q3 2019.
AVERAGE DAYS ON MARKET BY QUARTER
60
50
35 Days
34 Days
40
30
20
10
0
2019
2020
2021
2022
2023
2024
Source: Greater Regional Alliance of Realtors (GRAR)
The average days on market for residential homes remained relatively flat compared to 2023.
11
STATE OF DEVELOPMENT – DIVING DEEPER
HOUSING – Key Metrics
MEDIAN LISTING PRICE
Greater Grand Rapids
Michigan
United States
$500K
$450K
$400K
$390,800
$412,800
$350K
$300K
$250K
$263,967
$200K
$150K
2019
2020
2021
2022
2023
2024
Source: Realtor.com
Home prices continue to rise, with the median listing price for housing in Greater Grand Rapids edging up nearly 6% to $412,800 in Q1 2024, compared to $390,800 the same quarter the previous year. Median home prices in Greater Grand Rapids have historically trended lower than that of the country as whole. Data from Q1 2024, however, shows that gap shrinking significantly with U.S. median home prices clocking in at only $4,000 more than those in Greater Grand Rapids.
Permitted building units issued for new residential structures increased 3.7% from 2022 to 2023, reaching nearly 3,000 total units. The increase in building units was driven by 5+ unit multi-family housing structures, which grew nearly 31% in 2023 (1055 multi-family units) compared to the previous year. These gains were tempered slightly from a 14% decline in single-family units during the same period. 376 new permitted building units (143 single-family and 233 multi-family) were issued in the first two months of 2024. This is down from the 408 issued during the same period of 2023.
PERMITED UNITS BY TYPE
6,000
2023 2024 YTD
5,000
2022 2021 2020 2019
4,000
3,000
2,000
1,000
Single Family
2 Unit Multi-Family
3-4 Unit Multi-Family
5+ Unit Multi-Family
0
Unit Type
Source: U.S. Department of Housing and Urban Development
12
STATE OF DEVELOPMENT – DIVING DEEPER
The State of Michigan is actively investing in site readiness through the Strategic Site Readiness Program (SSRP). With industrial vacancy rates under 2% in Greater Grand Rapids, the $87.5 million SRRP is designed to accelerate development site creation and ensure the area remains competitive with attracting investment and creating high-quality jobs. The SSRP provides access to grants, loans, and other economic assistance for site improvements, land acquisition and assembly, infrastructure improvements, demolition, construction, rehabilitation, environmental remediation, architectural engineering and other activities. STRATEGIC SITE READINESS PROGRAM (SSRP) Grant Summary INDUSTRIAL SITE READINESS OPPORTUNITY
Covenant Business Park The 200-acre Covenant Business Park in Lowell Township was selected as one of 18 projects across the state to receive SSRP funding. Lowell Township and the City of Lowell formed a historic collaborative agreement to provide utility service at the site. The $17.5 million in SSRP dollars will be deployed to support critical infrastructure development for the site, including expanding the City of Lowell’s wastewater system to reach Covenant Business Park. The Right Place will work closely with stakeholders to administer and support the funding and site development.
Home to a growing and diversified manufacturing industry, Grand Rapids, Michigan, has the lowest vacancy rate among the 50 biggest industrial markets in the nation.” - CoStar
SSRP Economic Development Organization Funding
The Right Place, Lakeshore Advantage, Greater Muskegon Economic Development, and other regional partners are collaborating with the commercial real estate community and developers to identifying additional high-priority, high-impact, high-ROI potential industrial sites. SSRP provided $4 million in funds for this cohort to invest in site preparation, due diligence, site assessment activities, and other strategic investments.
For additional information, please contact Travis Alden of The Right Place at aldent@rightplace.org .
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STRATEGIC SITE READINESS PROGRAM
NEW DEVELOPMENT
PROJECTS
Overview
The following projects represent notable developments throughout Greater Grand Rapids as categorized by The Right Place and is not meant to offer a comprehensive list of projects.
2 1 3 4 5 6 7
Acrisure Amphitheater
The BlueJay Hotel
11
Booking.com Office
Bridge Business Center
Corewell Health Service Center
The Current
Eden Forest Townhomes
10 6
15
3
8
Fifth Third Building Residential Redevelopment
8
3
2 16
9 10 11 12 13 14
Grand Rapids Soccer Stadium
14
1
Lofts on Grove
Rose Hotel
12
13
Seymour Condominiums
5
Shea Ravines
Studio Park Residential Tower
7
15
Sun Title Property Housing Development
16 !
Talbot Apartment Project
4
Additional site details available on the following pages
14
NEW DEVELOPMENT PROJECTS
NEW DEVELOPMENT PROJECTS – DETAILS
Type: Commercial Developer: Grand Action 2.0 General Contractor: Pioneer Construction & Barton Malow Investment: $184 million Footprint: 12-acre site Address: 201 Market Avenue SW Timeline: 2026 Status: Breaking ground as of Spring 2024 Description: When complete, the Acrisure Amphitheater will hold 12,000 people. The project will also include 475 residen- tial units. Acrisure Amphitheater 1
Bridge Business Center 4
Type: Industrial Developer: Vision Real Estate General Contractor: N/A Investment: N/A Footprint: 126,000 square feet Address: 9765 Division Avenue SW, Byron Center Timeline: N/A Status: Under Construction Description: Speculative industrial building currently under construction in Byron Center by Vision Real Estate.
Corewell Health Service Center 5
Type: Boutique Hotel Developer: Brad Veneklase General Contractor: Kozak Construction Investment: $1.3 million Footprint: 3,600 square feet The BlueJay Hotel 2
Type: Commercial Developer: Corewell Health General Contractor: Pioneer Construction Investment: $80 million Footprint: 295,515 square-foot building on a 40-acre parcel Address: 300 36th Street, Wyoming (Site 36) Timeline: N/A Status: Approval Pending Description: Corewell Health plans to invest $80 million in a new service center at the site of a former General Motors manufacturing plant. Corewell Health acquired a 40-acre parcel of the site where it plans to build the nearly 300,000 square-foot facility.
Address: 644 Bridge Street NW Timeline: Opened in January 2024 Status: Complete Description: A boutique, five-room hotel completed in early 2024 on Grand Rapids’ West Side.
Booking.com Office 3
The Current 6
Type: Commercial Renovation Developer: N/A General Contractor: Carbon Six Construction Investment: $450,000 Footprint: 5,479 square feet Address: 99 Monroe Avenue NW Timeline: Summer 2024 Status: Under Construction
Type: Mixed-Use Residential Developer: Talbot Development General Contractor: Pinnacle Construction Group Investment: $1.5 million
Footprint: 45,000 square feet Address: 220 Quimby Street NE Timeline: N/A Status: Under Construction
Description: Booking.com leased half of the fifth floor of the 12-story office building located at 99 Monroe Avenue NW and is remodeling the space.
Description: The Current is a four-story mixed-use residential project in the Creston neighborhood. The property is expected to include 49 studio units, 20 one-bedroom units, and three two-bedroom units as well as a 1,100-square-foot café and 9,337-square-foot common area.
15
NEW DEVELOPMENT PROJECTS – DETAILS
Type: Residential Developer: 60th Street Ventures LLC General Contractor: Orion Construction Investment: N/A Footprint: 274 units on a 40-acre parcel Address: 1184 60th Street SE, Gaines Township Timeline: Mid-2025 (phase one) Status: Under Construction Eden Forest Townhomes 7
Type: Mixed-Use Residential Developer: First Companies General Contractor: N/A Investment: N/A Footprint: N/A Address: 1329 and 1359 Plainfield Avenue NE Timeline: Completed Status: In Planning Description: This mixed-use development contains a market-rate mixture of studios, one- and two-bedroom apartments. Lofts on Grove 10
Description: Orion Construction is currently building the first phase of what will become a 274-unit (mixed rental and for-sale housing) residential development in Gaines Township. The first phase of the project will include 152 rental townhomes.
11
Rose Hotel
8
Fifth Third Building Residential Redevelopment
Type: Hotel Developer: Wheeler Development Group
Type: Residential Developer: CWD Real Estate Investment LLC General Contractor: N/A Investment: $31.7 million Footprint: 140 units (95,025 square-feet) Address: 111 Lyon Street NW Timeline: Late 2026 Status: Pending City Approval
General Contractor: N/A Investment: $14 million Footprint: 40,000 square feet
Address: 12 S. Main Street, Rockford Timeline: June 2025 Targeted Opening Status: Secured funding. Groundbreaking pending.
Description: This three-story hotel will provide 54 guest rooms, a hotel-managed restaurant and bar, and retail space for lease located in downtown Rockford.
Description: CWD Real Estate plans to renovate the upper seven floors of the Fifth Third building from office/commercial to 140 new residential units.
Grand Rapids Soccer Stadium 9
Type: Commercial Developer: Grand Action 2.0 General Contractor: N/A Investment: $108 million (initial investment) Footprint: 7.25 acres plus Address: Near YMCA and U.S. 131 Timeline: Breaking ground planned in 2024 Status: In Planning
Description: Grand Action 2.0 is planning a 8,500-seat soccer stadium near the YMCA and U.S. 131 in downtown Grand Rapids. The site will also include 260 residential housing units
16
NEW DEVELOPMENT PROJECTS – DETAILS
12
Sun Title Property Housing Development 15
Seymour Condominiums
Type: Residential Developer: ICCF Community Homes General Contractor: Wolverine Building Group Investment: $13.6 million Footprint: 27-unit Condo Development Address: 2550 Eastern Avenue SE Timeline: Planned Completion in August 2026 Status: In Planning
Type: Mixed-Use Apartment Developer: Pinnacle Construction Group General Contractor: N/A Investment: N/A Footprint: 2-acre lot to support a 186-unit development Address: 385 and 301 Leonard St. NE Timeline: N/A Status: Pending City Approval Description: Pinnacle Construction Group and Sun Title Agency plan to rezone and develop a vacant, 2-acre parcel to support a five-story mixed-use development with up to 186 new, mixed- income rental housing.
Description: The Seymour Condominiums project will provide 27 units on the former site of Seymour Christian School in Alger Heights. These units are aimed at low-income and mid-market home buyers.
13
Talbot Apartment Project 16
Shea Ravines
Type: Mixed-Used Residential Developer: Talbot Development
Type: Residential Developer: Woda Cooper Development and Cherry Health General Contractor: N/A Investment: N/A Footprint: 56 Units Address: 2929 Burlingame Avenue SW, Wyoming Timeline: N/A Status: N/A Description: Shea Ravines will provide 56 units of affordable housing in Wyoming, with 20 units reserved for supportive housing through the Grand Rapids Housing Commission.
General Contractor: N/A Investment: $31 million
Footprint: 117,000 square feet Address: 648 Bridge Street NW Timeline: Project to begin by the end of 2024 and conclude in 2026 Status: In Planning Description: Talbot Development plans to convert the former Duthler’s Family Food store into a 150-unit, five-story, mixed-use development project.
Studio Park Residential Tower 14
Type: Residential Developer: Olsen Loeks Development General Contractor: Rockford Construction Investment: $62 million Footprint: 200 units (212,000 square-feet) Address: 144 Oakes Street Southwest Timeline: Fall 2024 Status: Under Construction
Description: This 16-story residential tower is the second phase of the Studio Parks development. The new tower will include 200 units of apartments and luxury condos above the Studio Park parking garage.
17
NEW DEVELOPMENT PROJECTS – DETAILS
AUTHOR’S PAGE
Authors
Tim Mroz Senior Vice President, Community Development
John Wiegand Business Intelligence & Research Manager
Eric Heys Marketing Coordinator
Contributors
Randy Thelen President & CEO
Brad Comment Senior Vice President, Strategic Initiatives
Rafael Martinez Business Intelligence & Research Manager
Travis Alden Senior Director, Community Development
Questions?
For questions on information contained in this report, or if you’d like to discuss your development goals with us, please contact:
Tim Mroz Senior Vice President, Community Development 616.881.1038 mrozt@rightplace.org
Travis Alden Senior Director, Community Development 231.233.4349 aldent@rightplace.org
18
AUTHOR’S PAGE
About The Right Place The Right Place is a leading economic development organization serving the Greater Grand Rapids Region. Our mission is to drive sustainable economic growth and shared prosperity for all in the region. We concentrate on three key strategic pillars to achieve this mission: People, Place, and Prosperity. PEOPLE We aspire to be a region where everyone can achieve their highest potential. We work toward this aspiration by strategizing with regional talent partners, leveraging our business network to amplify best practices, and benchmarking area talent development, retention, and attraction efforts. PLACE We aspire to be a region of choice, where people choose to visit, locate, & stay. We work toward this aspiration by focusing on strategies related to placemaking, infrastructure enhancements, site development and transformational projects. PROSPERITY We aspire to be a vibrant economy that provides good careers & opportunities for all. We work toward this aspiration through strategies focused on business retention, expansion, and attraction, economic inclusion, and business intelligence.
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