Ann Arbor Becoming a Bright Spot in SE Michigan’s Commercial Real Estate Market
SOUTHFIELD, Mich. – May 17, 2012 – While much focus has been appropriately placed on the surge of buying in Downtown Detroit’s commercial real estate market, Ann Arbor is quietly making its return as well, according to Cam McCausland, SIOR, CCIM, a partner with Michigan-based commercial real estate consulting firm Plante Moran Cresa and the firm’s Director of Transaction Management.
"The Plymouth Road corridor is thriving, with U-M’s revitalization of the former Pfizer facility helping to lead the charge, but there is more action in the Briarwood and Downtown areas as well,” explains McCausland, who is representing a client that leased 5,000 square feet in the Briarwood sub market and is working on several other Ann Arbor transactions that are still confidential.
McCausland says increased activity includes expansions and renewals, noting that the tipping point for Ann Arbor’s commercial real estate market is narrow.
“The tipping point between a strong commercial real estate market in Ann Arbor and a weak one is narrow because the Ann Arbor market is relatively small. Ann Arbor also has the advantage of not being overbuilt immediately prior to the recession in 2007/2008 so there’s room for growth now,” affirms McCausland. “As soon as the distressed buildings get absorbed, we will see rent growth as well.”
McCausland says that lease rates in Ann Arbor have stabilized, with fewer concessions and positive tenant growth, which will lead to an eventual need for new building.
“The Ann Arbor market has been lacking in new development for several years, so larger blocks of space are tough to come by and tenants don’t have many choices now. We should see that changing in 2013 and 2014, especially if Michigan’s economic indicators continue to trend positive.”
Media Contact: Barbara Fornasiero, EAFocus Communications: 248.651.7536; Barbara@eafocus.com; Ron Rotole, Plante Moran Cresa; 248.603.5241