CURRENT DEVELOPMENT CLIMATE
Office
Key Metrics Q1 2022 Q1 2023 Change
YTD Net Absorption -33,761 s.f.
-38,094 s.f.
Greater Grand Rapids witnessed several new major office projects recently, including the launch of both Perrigo’s and Acrisure’s downtown headquarters and the Michigan State University Grand Rapids Innovation Park. These major projects helped contribute to a nearly 6 percent increase in total inventory from approximately 12.6 million s.f. in 1Q22 to nearly 13.4 million s.f. in 1Q23. With the addition of this new premium space, direct asking rents increased over the past year, rising 5 percent to $21.57 per s.f. Vacancies edged up, increasing more than two percent. At the same time, the post-
Existing Supply
12,622,564 s.f 13,365,446 s.f.
Under Construction 421,000 s.f.
10,812 s.f.
Total Vacancy
11.5%
13.7%
Direct Asking Rent
$20.48 p.s.f.
$21.57 p.s.f.
Source: JLL U.S. Office Insights
Covid remote work trend continues, with the sublease market expanding as companies contemplate their office strategy. The office construction pipeline was largely expended with the large development projects noted above. As of 1Q23, approximately 11,000 s.f. of new office space is slated to come online in the coming months.
Industrial
Key Metrics Q1 2022 Q1 2023 Change
YTD Net Absorption 716,339 s.f.
144,168 s.f.
The Greater Grand Rapids industrial market remains robust in 2023 with numerous projects, including Speed Rack Products Group and Amazon’s Warehouse and Distribution Center, driving an additional 2.5 million s.f. of industrial space from 1Q22 to 1Q23. At the same time, total vacancy rates have edged down slightly from 3.2 percent in 1Q22 to 3 percent in 1Q23, while direct asking rents increased nearly 2 percent from $4.35 per s.f. in 1Q22 to $4.43 per s.f. in 1Q23. The construction pipeline currently sits at approximately 500,000 s.f. as of 1Q23.
Existing Supply
143,660,369 s.f. 146,188,883 s.f.
Under Construction 1,712,000 s.f.
521,930 s.f.
Total Vacancy
3.2%
3%
Direct Asking Rent
$4.35 p.s.f.
$4.43 p.s.f.
Source: JLL U.S. Industrial Insights
Retail
Key Metrics Q1 2022 Q1 2023 Change
YTD Net Absorption -52,644 s.f.
59,927 s.f.
Major brands and retailers continue to choose Greater Grand Rapids as a place to do business. Over the past year, brands including HomeGoods, Sierra Trading Post, and Whole Foods have established retail presences in the region. Moreover, smaller retailers including Gazelle Sports and numerous restaurants continue to open shop around the area. These projects led to a 112,000 s.f. increase in net absorption from 1Q22 to 1Q23, spurred substantially by a 48,000 s.f. retail project in Grandville and other projects. Total inventory remains nearly 145,000 s.f. less in 1Q23 than the same quarter the previous
Total Inventory
20,975,096 s.f. 20,830,458 s.f.
Under Construction 172,194 s.f.
14,250 s.f.
Total Vacancy
6.2%
4.9%
Direct Asking Rent
$13.91 p.s.f.
$15.81 p.s.f.
Source: Colliers
year. At the same time, asking rents increased nearly 14 percent in 1Q23 over 1Q22. The construction pipeline for new retail currently sits at 14,000, with much of pipeline from 1Q22 deployed during the past year.
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CURRENT DEVELOPMENT CLIMATE
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