2023 Development Report

OFFICE – Key Metrics

INVENTORY & VACANCY

Office Inventory & Vacancy

14M

15%

Office inventory has remained relatively flat historically. From 1Q19 to 1Q23, inventory rose 9 percent with 5 percent of that growth occurring over the past year as large developments, including the new downtown headquarters of Perrigo and Acrisure, and Michigan State University Grand Rapids Innovation Park, came online. Meanwhile, vacancy rates in the office sector continue to climb moderately. SQ. FT. UNDER CONSTRUCTION The backlog of office space under construction that had built up between 2Q21 and early 2022 was largely exhausted by 2Q22. ASKING RENTS Rents for office space continue to increase, reaching $21.57/sq-ft in 1Q23 from $18.43/sq-ft during the same quarter of 2019, representing a 17 percent increase, driven largely by the addition of new Class A space.

12M

10%

10M

5%

Inventory Vacancy

8M

0%

2019

2020

2021

2022

2023

Source: JLL

Office Space Under Construction (Sq Ft)

500k

400k

300k

200k

100k

0

2019

2020

2021

2022

2023

Source: JLL

Office Average Direct Asking Rent

$22.00

$21.50

$20.00

$19.50

$18.00

$17.00

2019

2020

2021

2022

2023

Source: JLL

05

STATE OF DEVELOPMENT – DIVING DEEPER

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