A little bit of hope and a lot of challenges in West Michigan office market
Posted By: REjournals on November 17, 2023. For more information, please click here to read the source article.
How well is the West Michigan office market holding up today even as it faces the challenges of the work-from-home movement and higher interest rates? According to the latest research from NAI Wisinski, it depends on what part of the West Michigan region you are looking at.
Consider downtown Grand Rapids. The total office vacancy rate here is 10%. In the Northeast submarket, though, the total office vacancy rate is a lower 7.7%, while it is an even lower 5.2% in the Northwest submarket.
The office vacancy rates in the Southeast and Southwest submarkets are in the middle, with vacancy rates of 8.5% and 6.5%, respectively. The overall office vacancy for the entire West Michigan office market stood at 8.3% as of the end of the third quarter. That’s not great, but it’s not as high as some other markets in the Midwest and across the country.
What about total net absorption? That’s down across the board … mostly. Downtown Grand Rapids, for instance, saw negative net absorption of 61,664 square feet of office space in the third quarter. However, two submarkets did see positive net absorption in the third quarter: the Southeast submarket, which recorded 32,515 square feet of positive net office absorption during the quarter, and the Southwest submarket, which recorded 24,928 square feet of absorption.
Overall, though, the entire West Michigan office market saw negative net absorption of 35,173 square feet during the third quarter.
These numbers aren’t surprising. Office markets across the country are struggling as companies decide how much office space they’ll need now that most are operating on hybrid work schedules, letting their employees work at least part of the time from home.
Despite the challenges faced by the local office market, the West Michigan region did see some notable office activity during the third quarter.
NAI Wisinski reported that insurance provider Acrisure is leasing around 40,000 square feet of additional office space a block from its headquarters building in the Studio Park area of Grand Rapids.
Construction on Corewell Health’s Center for Transformation is currently underway and will consolidate the health system’s administrative operations in Grand Rapids to one central campus. This development includes a renovation of the Brassworks building a 648 Monroe in Grand Rapids, a new eight-story office building and two adjacent parking structures.
NAI Wisinski also reports that Gentex plans to expand its office space in Grand Rapids for the second time with a downtown technology hub to help attract and retain engineering and software talent who prefer working in the city’s center.
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