Signature Associates

Industrial construction down now. But expect more activity soon in Detroit market

Posted By: REjournals on September 4, 2025.  For more information, please click here to read the source article.

Better times ahead? That’s what CRE pros are predicting for Detroit’s already resilient industrial market.

And those better times should include more industrial construction in the coming years, these professionals say.

Kyle Morton, vice president of development in the Detroit office of Ashley Capital, said that Detroit experienced a massive spec industrial construction wave that hit and delivered in 2023.

During this year, the market saw more than 5 million square feet of spec industrial construction come online. Morton said that is two to three times the amount of new spec industrial space that the Detroit market typically sees.

Because of this boom, it’s not surprising that spec industrial construction has mostly come to a halt here since, Morton said. He said that Ashley Capital started developing two spec projects in 2023, one in Flint and another in Van Buren Township. He said that these were the only two spec industrial buildings that started construction in 2023. And in 2024? Morton said that he can’t think of a single spec industrial project that began construction.

“We had such an oversupply of spec industrial, it had to slow down,” Morton said. “But the market today is looking more optimistic.”

Morton said that Ashley Capital has started earth work on four sites in the local market. The company isn’t committed yet to building, but it is getting the sites ready for future work.

“We are hoping that in the next few months, we’ll see a little uptick in industrial leasing activity here,” Morton said. “We are already seeing little signs of optimism.”

Both of Ashley Capital’s 2023 spec buildings are fully leased.

Morton, too, said that the effect of tariffs and a slowdown in EV production are both holding up new construction in the Detroit industrial market. As Morton says, a good portion of the industrial construction and leasing activity in 2021 and 2022 was fueled by automotive plant expansions as automakers geared up to increase EV production.

“But that has all gotten kicked to the road,” he said.

Consider the Orion Assembly plant in Orion Township, Michigan. General Motors originally planned to use the plant for EV production. GM has since abandoned those plans and will instead build the Cadillac Escalade, Chevrolet Silverado and GMC Sierra light-duty pickups at this plant beginning in early 2027.

“If we get a little more auto contracts signed, you’d see a big uptick in industrial activity in this market,” Morton said. “The uncertainty that comes with tariffs is causing a lot of delays. There is interest from numerous companies for industrial space here. But many of them are not doing anything yet until they can see what happens with tariffs.”

Morton said that the major automakers all poured massive amounts of money into EV production. But now that EV tax credits are going away, and demand for EVs seems to be waning, the automakers are being forced to change their business plans.

“Everything keeps changing,” Morton said. “Clearly, GM biting the bullet and switching EV back to gas vehicle production shows you where EV demand is now. There is an acknowledgement of the lack of demand for EV.”

While Detroit’s industrial market serves a variety of end users, historically, as the auto industry goes, so does Detroit. That is still the case, Morton said.

“When the auto industry starts seeking more space again, the market here will switch pretty quickly,” he said.

A key tool for users seeking industrial space in Detroit market

Developers looking for sites in the region on which they can build new industrial developments can turn to the Verified Industrial Properties Program (VIP) offered by The Detroit Regional Partnership.

The goal of this program is to boost the site-readiness of brownfields throughout Southeast Michigan. The program, which launched in October of 2022, offers incentives to encourage partners to submit available properties to an online portal run by the Detroit Regional Partnership. Developers can then search the portal to find developable sites that fit their needs.

That portal, verifiedindustrialproperties.com, is a key to the program: It highlights former brownfield sites that have been vetted for environmental, zoning and other development-readiness factors. Third-party engineers verify the condition of vacant industrial parcels of 10 acres or more by evaluating how easy or difficult it would be to connect to utilities, whether wetlands mark the site, if there are easements for developers to deal with and other key factors.

“The VIP program was an answer for site consultants who wanted to have the facts on sites throughout the region verified,” said Shannon Selby, vice president of real estate for the Detroit Regional Partnership’s Verified Industrial Properties program. “This program saves developers time and money when they are looking at possible sites.”

Visitors reviewing sites on the VIP by DRP homepage can pull up assessment reports on available land sites in Southeast Michigan. Site reports include drone videos, mapping and sometimes a letter of support.

Selby says that the site reports can save developers six to 10 months of work that they would otherwise have to perform on their own.

“The response to this program has been overwhelming,” Selby said. “The site owners and brokers are very involved in the VIP program. The development community supports it. No one has done this before, pulled this information together. It’s a tool to get developers to say ‘yes’ to working in our region.”

Today, developers and owners can review about 50 land sites on the VRP by DRP website.

Justin Robinson, senior vice president of business development with the Detroit Regional Partnership, said that he and his fellow staffers are constantly analyzing new sites to add to the VIP program.

Robinson said that partnership staffers each quarter analyze new RFPs, studying what developers are looking for regarding site sizes, urban or suburban locations or greenfields vs. brownfields.

“We use that information when we decide which sites to invite into the program,” Robinson said. “We closely monitor that live demand.”

Robinson said that partnership staffers also work with site selectors to determine the information they need, the studies they need done, before they can bring a land site to a potential partner and end user.

“The demands from end users are constantly changing,” Robinson said. “We are constantly adjusting to these changing demands. We are always looking for the latest information to continue to build this program.”

The VIP program is especially important today. People from outside the region think that Detroit has plenty of industrial land. However, Detroit’s industrial market currently has a low overall vacancy rate. That can make finding industrial space a bit like finding a needle in a haystack, Robinson said.

“We know that we need to help companies identify land on which they want to build new buildings,” Robinson said.

Selby said that the goal is to add 10 sites to the VIP online home every quarter and to hit 120 total sites by the first quarter of 2027.

“We have a very organized and strategic program to help us reach these goals,” Selby said. “We have boots on the ground testing land sites.”

End users can search sites by greenfield or brownfield, by acreage and by county, Selby said. The VIP program lists industrial sites that are 10 acres and up.

“This is the core of the program,” Selby said. “We want to provide an answer to every end user searching for a site in our region.”

Robinson said that he expects demand for industrial space, both existing buildings and sites on which to develop, to continue to rise in the Detroit market and throughout Southeast Michigan.

“Detroit is almost the only underserved major, medium-sized regional market when it comes to industrial space,” he said. “In a lot of markets, there had been some overdevelopment of spec industrial space. Here, developers were more conservative. There is still demand in the market.”

The Detroit Regional Partnership is working steadily to improve the existing VIP program, too. Selby pointed to the industrial site readiness playbook that the partnership plans to unveil soon.

As Selby says, some communities are fearful of allowing industrial development. The partnership’s site readiness guide will help educate communities on what it means to have an industrial project in their cities or towns. It will showcase the economic benefits that such projects can bring.

“It’s about bringing better and more jobs to Michiganders,” Selby said. “We expect this toolkit to be something that can be used across the state. We are pretty excited about that. Industrial developments bring great opportunities to communities in the form of better fire, police and economic stability.”