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Friday, 11 September 2015 13:51

CBRE reports point to ‘positive market for landlords’

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In early August, CBRE brokered the sale of a six-building office park near the corner of Lake Drive and Sparks Drive, branded as Bridge Point Office Park (pictured) In early August, CBRE brokered the sale of a six-building office park near the corner of Lake Drive and Sparks Drive, branded as Bridge Point Office Park (pictured) COURTESY PHOTO

Commercial real estate brokerage firm CBRE | Grand Rapids today released its most recent market reports for Kent County and the results point to more growth for the region.

All three sectors — retail, office and industrial — experienced positive absorption and declining vacancies, pointing to continuing demand for space and pushing up lease rates across all three sectors of the market.

“It’s a positive market for landlords,” said Jill Langosch, a retail advisor at CBRE. “We’re seeing less price-conscious users. Users are seeking amenities, which is really a good thing for landlords."


Industrial

Kent County’s industrial sector with more than 96.1 million square feet stands at a vacancy rate of 4.8 percent, the lowest of any of the three commercial sectors, according to CBRE’s report. The challenge to find space is leading to new construction. The first half of 2015 saw more than 150,000 square feet of new, speculative industrial construction, CBRE reports.

Overall, the industrial market in the first half of 2015 experienced 746,273 square feet of net absorption and completed 410,000 square feet of completed construction.

The largest amount of completed space was clustered in the Southeast submarket near the airport.

“We don’t have a lot of big blocks of space,” Langosch said of the region’s industrial market. “There’s bigger competition for bigger chunks of space and developers are in development mode.”

According to Matthew DeWitt, assistant real estate manager and research coordinator in the CBRE Grand Rapids office, the lack of available space will lead to increase build-to-suit projects and vacant land deals.


Office

The five submarkets of the Kent County office market account for over 15 million square feet of leasable space, according to CBRE’s report.

While the first half of the year saw no completions of office space, construction — particularly in the downtown central business district — is underway on a number of projects, such as Arena Place and 25 Ottawa, both in the growing Arena South neighborhood.

The suburbs however — particularly the southeast side — experienced growth in recent months. As MiBiz reported in early August, CBRE brokered the sale of a six-building office park near the corner of Lake Drive and Sparks Drive. The transaction also included a medical office building in Holland.

Vacancy rates for office space across Kent County fell 17.5 percent in the second half of 2015 to 14.9 percent in the first half of this year. The first half of the year saw 218,400 square feet of positive absorption, up from 86,624 square feet in the latter half of 2014.


Retail

West Michigan’s retail market saw “unprecedented” rental growth, with lease rates getting as high as $36 per square foot in the hottest areas.

The areas near 28th Street and the East Beltline, Alpine Avenue and I-96 and Grandville around Rivertown Crossings Mall are seeing the most growth in retail and attracting a number of tenants new to the West Michigan market, according to industry sources.

The vacancy rate for Kent County’s retail sector fell to 7.8 percent in the first half of 2015, down from 8.5 percent in the second part of last year, according to CBRE’s data. The sector also saw 81,972 square feet of positive absorption in the first half of the year and more than 360,000 square feet of new retail space will be delivered in the third quarter of 2015.

Read 2145 times Last modified on Monday, 28 September 2015 11:05

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